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Teaching Children How and Why to Budget
Barclays Ring Public Blog

In the second blog of our Financial Planter 2015 series, our Guest Blogger is Megan Poore, a Financial Advisor Lucien, Stirling and Gray Advisory Group, Inc. in Austin, Texas.*


Kids and Finance.JPGThe word “budget” has an image problem.  Most people view budgeting as a restrictive process that ruins all of your fun.  I see it as an opportunity to spend money thoughtfully on the things that really matter to you, and to stop spending so much darn money on the things that really aren’t that important to you in the first place.  Spending thoughtfully is critical in order to build (and maintain) a strong financial foundation. 


Our children have grown up around excesses that most of us did not, which means that they are going to be tempted to spend, spend, spend.  Here are four tips for helping to give your children some budget wisdom:


  • Start where they are – For younger children, talking to them about grown-up numbers is likely to be overwhelming. Using the word “budget” is probably too much!  Instead, give them little opportunities to budget in real life.  We have found road trips to provide great opportunities for giving children budget experience.  Often when we go on a road trip, we will give the kids a small allowance for souvenirs, perhaps $5-10.  They can choose to spend the money on souvenirs at any point in the trip.  Yes, it’s a little more record-keeping for us when one spends $2 at one stop and $3 at a different stop.  But, it also allows children as young as five an opportunity to make spending decisions all on their own instead of us relying on us to decide which moments really speaks to them.


  • Give them practice – As children get older, they will need more experience using a budget. We give our ten year old a budget for her clothing for each season.  This allows her the experience of deciding whether she is going to buy fewer brand-name clothes or if she’d rather buy more clothes, but do a little bargain shopping.  While the parents still retain veto power, it does give her a good dose of freedom, too, to dress how she’d like to dress and spend more in areas where we might not.  It also eliminates a lot of discussions at the store – she knows she gets that budget twice a year and anything in between is on her dime.


  • Spread it out – As children get closer to graduating from high school, they should get more experience with making their money last for longer periods of time.  While a six year old may get a weekly allowance, a 16-year old should receive their allowance monthly.  This forces them to budget…or fail (more on that next).  If they run out of money in week two, then they may be a little more likely next month to conserve.  Since most jobs do not pay weekly, this helps get them used to a real-life scenario.


  • Let them fail – This is my very favorite piece of parenting advice! While our friends may be fooled into thinking that children gain self-esteem from incessant praise, you and I know the truth.  Kids feel better about themselves when they buckle down and solve their own problems.  When your child runs out of money in week two and has to go a couple of weeks without allowance, will you pay for them to go to the dance?  Give them gas money?  Step in and rescue them? No!  Stay strong!  Remember when you were younger and out of money?  What’d you do?  My guess is you figured it out –mowed the lawn for a neighbor, sold an old Walkman that you didn’t use any more (I’m assuming you all grew up when I did in this example) or borrowed from that one sibling who always had money in their piggy bank.  Since you were a teenager, you probably spent more time thinking about how unfair life is than you did about how solving your own problems was giving you self-confidence, but trust me, that’s what it was doing.  Don’t rob your kids of that opportunity!


Rather than sitting down with a spreadsheet and calculator to give kids The Talk (the budget talk, that is), teaching your children how to budget should be an ongoing process.  Watching them grow in their ability to spend thoughtfully will be well worth the effort!


Megan Poore, is a Financial Advisor at Lucien, Stirling and Gray Advisory Group, Inc. in Austin, Texas and loves to talk about budgeting, which keeps her in high demand on the cocktail party circuit.  Megan helps both women and men take control and navigate changes in income, retirement assets, business ownership and other matters related to major transitions, and their effects on a client’s lifestyle and family responsibilities.


*All content provided in this blog is supplied by Megan Poore for informational purposes only. Barclaycard US makes no representations as to the accuracy or completeness of any information or found by following any link within this blog.

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