4 Ways to Teach Early Budgeting to Your School-Aged Kids

Mother and father teaching school-aged daughter to budget

Young children often have a hard time understanding the family budget. They can understand buying something vs. not buying something, but not how that might relate to making good spending choices. As a parent, you want your child to grow up knowing how to make smart spending decisions from as early an age as possible. This way, it will grow into practical thoughts and good spending habits by the time they are teens, and then into a stable financial life as adults. Not to mention, it helps keep the impulse requests toys to a minimum.

What's amazing is that you can start teaching kids about budgeting as early as elementary school. Early lessons in budgeting and making choices will grow into a deeper understanding of budgeting and resource-management in their futures. Here are five easy ways that any parent can use to teach their school-aged kids about smart spending:

The Grocery Store Treat

The very first budget lesson you can teach your kids is in the grocery store. Parents often shop with their children, and children often beg for treats off the shelves. But they do so with no understanding of what the treat will cost, or if it's worth the money. To teach them, give each child a small budget. Possibly no more than $5 each. This is enough to choose one box of cookies, one bag of chips, or a handful of party-favor toys.

Pick one aisle, (snack or party) and let your kids spend a few minutes weighing their options. This will encourage them to measure how much they want something versus what it costs. Clever kids may figure out how to split their budget, getting a smaller toy and a checkout candy bar.

"This or That" Summer Activities

Parents on a budget often can't afford to send their kids to every summer activity that sounds awesome. Summer camp, soccer camp, and trips to the pool all cost money. But instead of turning your summer into the "No" chorus, challenge your kids to make some decisions. Tell them they have to choose, but they can have whichever option they pick with confidence. In other words, "This or That."

Tell your kids they can go to scout camp or soccer camp, but not both. That they can go to Splash World once or to the neighborhood pool two-dozen times, but not both. Most kids will figure out their priorities and accept the challenge of choosing. Especially if you have some affordable home-craft alternatives available.

Birthday Party Planning

Children with summer birthdays often want to go all-out. Many feel obligated to throw the 'summer bash' their non-camping friends will never forget, even at a young age. But they also have to stay within your party-planning budget. Don't set yourself up for saying, "We can't afford that". Instead, set our child up with a budget. Treat them like a little adult. Sit them down and say, "You get to be a big part of planning your party this year. Here's the budget we can spend on decorations, food, and games."

Then walk them through how much each aspect of the party costs. Start with the necessities, the price of a box cake and a can of frosting. We'll assume you have sprinkled and candles in a drawer from previous birthdays. Then compare the cost of hotdogs to the cost of ordering a stack of pizzas. Once you've got the menu hammered out, take our kid online or to a party store to look at decoration prices.

Your child will quickly get too involved in counting up the tally and making decisions to feel 'put out' that they can't have whatever crazy scheme they were dreaming up before. Because you put the power in their hands, your child will start making practical decisions on their own.

Again, don't forget to offer construction paper chains and hand-made cards once your child understands the relative cost of decorations. If they want a pinata or gallons of ice cream, paper chains are a great way to make room in the budget.

The Camping Trip Budget

If your family goes camping every year or might go camping this year, get your children involved in the budgeting. Kids love planning for camping trips because it gives them an excuse to stay excited about the trip for days or weeks beforehand. Give your kids the grocery budget and let them pick the menu, to a point. Then talk about how much hot dogs and chips cost altogether.

If there's gear to buy, talk to your children about the cost of the gear and why sometimes higher priced gear is worth the space in your budget because it will last for years. If you haven't chosen a campsite yet, get your kids involved in comparing camping fees to the amenities offered and the reputation of each site.

Your children will quickly get involved in tallying up the costs and can even help you cut out excess if the total takes you over-budget.


Contrary to popular belief, most children love to budget. It's an applied math problem and a chance to buy stuff at the same time. Kids like to make decisions and feel important. They will feel better about budget-treats on the holiday if they chose which budget treats to buy. They will feel more like a part of family trips if they contributed by helping you balance the budget. And most importantly, your children will grow up understanding how and why to be smart about spending.