How to Help Kids Learn Budget Skills to Last a Lifetime – 
Without a spending plan, finances can easily spiral out of control. This is why learning good budgeting skills as early as possible is so important. Helping kids set up a budget doesn’t have to be cumbersome; the experience can actually be fun.

Beginner Budgets
Kindergarten and early elementary school kids can grasp basic budgeting ideas. Start by introducing the concept of wants and needs: A new toy is something a child may want, but he or she may really need winter boots. Explain that money is what we exchange to get stuff, and we often have to save and wait for things we want in favor of getting what we need.

A small allowance gives kids something concrete to work with. Of course you provide their basic needs, but with even a small income, they can begin to finance some wants. Introduce savings by giving them four jars with labels like “spending,” “saving,” “investing” and “giving”:

• Use the spending jar for cash that can be spent on small, everyday wants such as sweets or stickers.
• The saving jar can collect money to be used for larger items like a new Lego set or doll. Let kids create and decorate wish-list posters to help reinforce their savings goals.
• The jar for investing should accumulate cash for things kids might want in the more distant future.
• The one for giving establishes a fund your child can use to help others.

Kids watch everything you do, so one of the best ways to teach them is to model responsible budgeting and involve them with planning and shopping. This is also the perfect age to introduce banking concepts. Bring kids with you to a financial institution like Harris County Federal Credit Union to help them learn how they operate. For instance, you can show your children that the money you get from a cash machine is limited to what you put into an account earlier.

Middle School Budgets
Kids in their “tween” years can try out some more complex budget concepts. Give your child a set amount of money to work with and let her take charge of planning a family trip to a water park, restaurant or petting zoo. She can research prices and decide what rides, entrees or activities are affordable.

Enrich budgeting skills by encouraging your child to keep spending records and to maintain a list of long and short-term goals. You may want to provide an incentive by matching savings for a special long-term goal.

When your child accumulates more than a few coins, she’ll need a safe place to keep it. Consider opening a joint account that will both reward her good academic performance as well as regular deposits. These accounts earn interest and give kids access to Googolplex, an interactive online tool that teaches financial literacy through stories and games. Tech savvy youngsters can also improve their money skills by downloading entertaining apps such as Allowance and Virtual Piggy.

Teen Budgeting
Teen budgets begin to approach those of adults. Encourage your teenager to get a part-time job and let him be responsible for some of his own expenses, such as his mobile phone bill or gas for the car. A young adult share checking account can also provide rewards for getting good grades in school and offer built-in training features to teach teens how to avoid overdrafts.

As your teen’s budget becomes more complex, look for free apps that can help keep her finances organized. By this time, all the experience and good role modeling you’ve provided will have your teen well on the way to becoming a financially responsible adult.

Roberta Pescow, NerdWallet