Teach Kids About Money Management

Teach Kids about
Money Management
It's a Great Investment in Their
Future
Compiled by:
Table of Contents
Help Me Teach My Kids about Money Management
Help My Child Create a Spending Plan
Worksheet: Spending Plan
Help My Kids Stick to a Budget
Hold a Family Summit on Financial Literacy and Family Budgeting
Worksheet: Financial Responsibility and Family Budgeting Inventory
Is My Kid Smart about Money?
Am I Smart about Money?
Teach Kids about Money Management
It's a Great Investment in Their Future
Do I need this EduGuide?
Yes, if you want to teach your children how to manage money and become financially responsible. Read on for information about
financial personality, practical money skills, teen money management, budgeting for teens, and allowances for kids.
2 How does it work?
ONLINE EDUGUIDE www.EduGuide.org
Teach Kids about Money Management
It's a Great Investment in Their Future
Do I need this EduGuide?
Yes, if you want to teach your children how to manage money and become financially responsible. Read on for information about
financial personality, practical money skills, teen money management, budgeting for teens, and allowances for kids.
How does it work?
Quizzes help you know where you stand.
Articles give you the background information you need to make a decision.
l “Money Talks: My Money Personality.”
Real Life Stories tell the actual experiences of real parents and real kids.
ShortCuts help you take immediate action. Choose one or go through them all.
What will I learn?
l How much my child knows about handling money
l How to teach my child financial responsibility
l How to hold a family summit on financial responsibility
l How much financial responsibility my teen should have
Quick Solutions
l What can I do in fifteen minutes? Take the “Is My Kid Smart about Money?” or ask my child to take the “Am I Smart about
Money?” quiz.
l What can I do in an hour? Discuss the answers to the quizzes with your teen (go to a coffee shop or library so there are no
distractions). Read “Money Talks: My Money Personality” with your teen to see whether and how your personality types differ.
Help your teen prioritize his or her list of wants and needs and determine how to achieve these goals. Brainstorm your own ten
ways to save and lose money with your teen.
l What can I do in a week? Plan and hold a Family Financial Summit.
3 ONLINE EDUGUIDE www.EduGuide.org
Ten Tips for Financial Responsibility

Ten Tips for Financial Responsibility
Teaching your children about money can be challenging. As kids enter middle school, their list of wants seems to spin out of control
as they try to keep up with their friends. They need your guidance to teach them practical money skills and financial responsibility.
Here’s what you need to know.
1. Model smart money management. You can’t expect your kids to be disciplined about money if you aren’t. If they see you saving
money, they’ll save money. If you spend your money wisely and rarely splurge, they will be likely to follow your example.
2. Give your children an allowance. For help with allowance decisions, read our EduGuide Choose the Best Allowance for My
Child.
3. Help your kids find a job. Kids as young as ten can start earning money. Encourage them to look for jobs such as babysitting,
shoveling snow, mowing lawns, and dog walking. Note: If one of your kids is struggling in school, keep an eye on how the job
affects his or her schoolwork: if grades drop, drop the job.
4. Open a savings account. Banks offer standard savings accounts with similar minimum balances, interest rates, etc., but look
for a bank that has a special saving incentive program for kids.
5. Define financial responsibilities. What do you expect your kids to pay for? Movies, cell phone, clothes? Some of what your
children can pay will depend on their income from jobs and allowance, but it’s best to discuss your expectations so your kids
understand what is expected.
6. Make a list of wants and needs. Be sure your children understand the difference between a want and a need. Your kids may
want the latest and greatest iPod, but what they may really need is jeans for school. Once you have determined wants and
needs together, your kids can sit down with a pen and paper and list items from most to least important.
7. Set up a spending plan. Our ShortCut “Help My Child Create a Spending Plan”[another link] can help you keep it simple. After a
month or two, take a look at how well your kids are following their budgets, and don’t be afraid to tweak the numbers a little if
you need to.
8. Set a limit on purchases. Decide how much money your kids can spend without consulting you first. If you set a limit (ten
dollars, twenty dollars, fifty dollars) up front, you can avoid confrontations later on. Be sure to work with your children to create a
limit you can both live with.
9. Encourage bargain shopping. Check out cool consignment shops and clothes swaps, and look online for gently used items.
10. Talk about cash versus credit. It’s never too soon to discuss how credit cards work. Show your children your credit card
statement and explain interest rates, late fees, and minimum payments. Talk about when it is necessary to use a credit card
(for emergencies or car rental) and when using a credit card is merely convenient.
Sources:
interest.com
familyeducation.com
moneyandstuff.info

A Simple Budget Teaches Practical Money Skills
familyeducation.com
moneyandstuff.info

A Simple Budget Teaches Practical Money Skills
A kid’s allowance is a great tool for teaching kids money management, but creating a spending plan, or allowance budget, with your
child enhances the learning. Follow these ten steps to create a spending plan both you and your child can live with.
1. Use the Spending Plan Worksheet to get your thoughts on paper.
2. Help your child make a list of expenses. Try not to pass judgment on choices (it’s your kid’s money, after all), and don’t forget
everyday expenses such as club dues, MP3 downloads, and bus fare.
3. Classify each item on the list as a need (an unavoidable expense such as lunch money) or a want (a new purse, a video
game).
4. Assign responsibility for each item on the list. Who will pay, you or your child? Explain that responsibility means that your kid
will have to keep track of expenses for each item assigned to him or her.
5. Brainstorm possible unexpected expenses such as a birthday party gift or replacing a damaged backpack. Decide whether
you want to set up a fund to cover such expenses.
6. Plan for large purchases such as summer camp tuition, athletic equipment, and optional schoolrelated items (a yearbook, a
class ring). Use a school calendar to note anticipated expenses.
7. Talk about savings. Buy a piggy bank for young kids, or open a savings account and teach your child how to deposit money
regularly. Talk about the difference between shortterm savings for small items such as snacks and longerterm savings for
major purchases.
8. Talk about charity. Share your values about giving of time, talents, and money. Talk about how kids can help others, for
example, by spending some of their allowance to buy items for a local food pantry or by putting their change in an animal
shelter collection container.
9. Write down the plan, sign it, and date it.
10. Evaluate the plan after a month or so. How is it working? What has your child learned from it? Is there anything he or she
wants to change? Note: Once your child's budget is up and running, check it yearly at the beginning of the school year or on
your child’s birthday to identify unexpected expenses and make necessary changes.
Record all expenses for one week.
Date Item Purchased Where Purchased How Purchased Amount

10/15/XX Bakugan expansion balls WalMart Dad gave me money for it $13.95


your child’s birthday to identify unexpected expenses and make necessary changes.
Record all expenses for one week.
Date Item Purchased Where Purchased How Purchased Amount

10/15/XX Bakugan expansion balls WalMart Dad gave me money for it $13.95

Notes on Using Your Practical Money Skills
List items that you wanted to purchase but did not:
List items that you might typically purchase but did not in this particular week:
How much money did you put into savings?
How much money did you share with others or give to a religious or charitable organization?
Spending Plan
My current weekly allowance is: __________________________________________
Spending Plan
My current weekly allowance is: __________________________________________
Weekly Expenses/Spending Amount

Each week, I plan to put into savings: ______________________________________
Each week, I plan to give to others: ________________________________________
Once your kids have created their own spending plan (see the ShortCut “Help My Child Create a Spending Plan”), here are some tips
that can help them stick to it.
1. Make a list of wants and needs. Give your kids plenty of time to figure out their needs (they probably won’t need much help
figuring out their wants), and then help them organize the list from most to least important.
2. Create a smart goalsetting strategy. Help your kids remember what they are working toward. Tell them to put a picture of the
goal on a mirror, inside a locker, or as the background on a cell phone. Help them set both longterm (bike, Wii game) and
shortterm (sweatshirt, earrings) goals.
3. Give your kids a notebook in which to record all the money they spend for a week. Tell them to write down every penny. They
will be amazed at how small things—a pack of gum, a magazine—add up to big spending.
4. Make adjustments to the budget as needed. Remember: a budget isn’t carved in stone. If you find your children overspending
in a particular category month after month, change things up a bit. You will either need to spend less on clothing (see “Ten
Ways to Save Money and Ten Ways to Lose It”) or cut expenses in another area.
5. Keep it simple. If your children are having trouble keeping track of expenses, chances are their budget needs to be simplified.
6. Ask for help. If you’ve tried everything to help your children, and they are still having trouble budgeting, ask a friend for help.
Some people are really good at organizing and keeping track of money. Ask them to show you their system.
Sources:
moneyandstuff.info
Each week, I plan to give to others: ________________________________________
Once your kids have created their own spending plan (see the ShortCut “Help My Child Create a Spending Plan”), here are some tips
that can help them stick to it.
1. Make a list of wants and needs. Give your kids plenty of time to figure out their needs (they probably won’t need much help
figuring out their wants), and then help them organize the list from most to least important.
2. Create a smart goalsetting strategy. Help your kids remember what they are working toward. Tell them to put a picture of the
goal on a mirror, inside a locker, or as the background on a cell phone. Help them set both longterm (bike, Wii game) and
shortterm (sweatshirt, earrings) goals.
3. Give your kids a notebook in which to record all the money they spend for a week. Tell them to write down every penny. They
will be amazed at how small things—a pack of gum, a magazine—add up to big spending.
4. Make adjustments to the budget as needed. Remember: a budget isn’t carved in stone. If you find your children overspending
in a particular category month after month, change things up a bit. You will either need to spend less on clothing (see “Ten
Ways to Save Money and Ten Ways to Lose It”) or cut expenses in another area.
5. Keep it simple. If your children are having trouble keeping track of expenses, chances are their budget needs to be simplified.
6. Ask for help. If you’ve tried everything to help your children, and they are still having trouble budgeting, ask a friend for help.
Some people are really good at organizing and keeping track of money. Ask them to show you their system.
Sources:
moneyandstuff.info
familyeducation.com
Things to Do Ahead of Time
1. Pick a date. Write it on a calendar in a location everyone in the family will notice. Explain briefly what the meeting is about and
make sure everyone knows that the meeting is mandatory.
2. Make copies of the Financial Responsibility Inventory for each family member. Do this a week before the meeting and ask
everyone to bring completed inventories to the meeting.
3. Tell family members to keep an expense log for the week. Family budgeting includes all expenses, so ask them to keep
track of everything they spend money on (gum, newspapers) for a week, no matter how minor the expense.
4. Pick a location for the meeting that is comfortable and quiet. Turn off the TV, the computer, and the cell phones. Choose a
setting where each person can express his or her feelings comfortably.
5. Make the meeting pleasant. Order a pizza or make ice cream sundaes to get everyone in a relaxed mood. The topic is serious,
but the meeting doesn’t have to be grim.

How to Conduct the Summit
familyeducation.com
Things to Do Ahead of Time
1. Pick a date. Write it on a calendar in a location everyone in the family will notice. Explain briefly what the meeting is about and
make sure everyone knows that the meeting is mandatory.
2. Make copies of the Financial Responsibility Inventory for each family member. Do this a week before the meeting and ask
everyone to bring completed inventories to the meeting.
3. Tell family members to keep an expense log for the week. Family budgeting includes all expenses, so ask them to keep
track of everything they spend money on (gum, newspapers) for a week, no matter how minor the expense.
4. Pick a location for the meeting that is comfortable and quiet. Turn off the TV, the computer, and the cell phones. Choose a
setting where each person can express his or her feelings comfortably.
5. Make the meeting pleasant. Order a pizza or make ice cream sundaes to get everyone in a relaxed mood. The topic is serious,
but the meeting doesn’t have to be grim.
How to Conduct the Summit
1. Start the meeting by reading examples from the expense log. After all family members have had a chance to share family
ideas, ask each person to report on their area of greatest spending.
2. Read each question on the Financial Responsibility Inventory. Celebrate the areas that all family members agree on, and
discuss areas of disagreement. But set a time limit (for example, five minutes of discussion for every point of disagreement). If
someone comes up with other categories, write them down and discuss them. Welcome discussion, but make sure your kids
understand that parents have the final say. Work hard to find compromises.
3. Create a list of consequences for not meeting an agreedon financial responsibility (such as paying a cell phone bill). For
example: first offense—apology accepted; second offense—formal discussion; third offense—privileges withheld (cell phone,
TV, computer, time with friends) for a specific amount of time.
4. Write up your Family Financial Responsibility Agreement using the Financial Responsibility Inventory and list of
consequences.
5. End the meeting on a positive note. Talk about what everyone has learned from the meeting and what strategies you will use
next time.
After the Summit
1. Post the final list where everyone in the house can see it, and don’t be afraid to modify the list if necessary.
Many parents want to shield their children from financial worries. But talking about family finances and learning practical money skills
help kids become financially responsible adults. To get the discussion started in your family, ask everyone in your household to fill out
9 this inventory. Then compare answers during a family meeting (see “Hold a Family Financial Summit”).
ONLINE EDUGUIDE www.EduGuide.org
1. Post the final list where everyone in the house can see it, and don’t be afraid to modify the list if necessary.
Many parents want to shield their children from financial worries. But talking about family finances and learning practical money skills
help kids become financially responsible adults. To get the discussion started in your family, ask everyone in your household to fill out
this inventory. Then compare answers during a family meeting (see “Hold a Family Financial Summit”).
Expenses (Circle Answers) Who Should Pay?
Clothes Parents Teens Both/share
Cell phone bill Parents Teens Both/share
Gifts for friends Parents Teens Both/share
Spending money/entertainment Parents Teens Both/share
Extras (iPod, new cell phone, texting, downloads, etc.) Parents Teens Both/share
Sources of Income (Circle Answers) Should Your Teens Have the Following?
Job Yes No
Hours per week Fewer than 10 1020 More than 20
Allowance Yes No
Amount per week $5 $10 Based on child's age
Financial Decisions
How Should Your Teens Spend Their/Your Money?
(Circle Answers)
Spend as they
Birthday/holiday money All in the bank Half in the bank
want
Spend as they
Money from job All in the bank Half in the bank
want
Spend as they
Money from allowance All in the bank Half in the bank
want
Stores of their Stores of my
Clothes shopping Compromise
choice choice
Allowed to spend money without Purchases under Purchases under Purchases under
permission? $10 $20 $50
Due to the dynamic nature of our quizzes, they are only available on the web. Follow the addresses below to take a quiz on our
website.

permission? $10 $20 $50
Due to the dynamic nature of our quizzes, they are only available on the web. Follow the addresses below to take a quiz on our
website.
http://www.eduguide.org/Parents/TakeQuiz/tabid/114/quizId/35/view/StepTakeQuiz/Default.aspx
http://www.eduguide.org/Parents/TakeQuiz/tabid/114/quizId/36/view/StepTakeQuiz/Default.aspx

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Date Item Purchased Where Purchased How Purchased Amount

Date Item Purchased Where Purchased How Purchased Amount

8 ONLINE EDUGUIDE www.EduGuide.org

Clothes Parents Teens Both/share

Cell phone bill Parents Teens Both/share

Gifts for friends Parents Teens Both/share

Spending money/entertainment Parents Teens Both/share

Extras (iPod, new cell phone, texting, downloads, etc.) Parents Teens Both/share

10 ONLINE EDUGUIDE www.EduGuide.org

11 ONLINE EDUGUIDE www.EduGuide.org

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