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Budgeting Basics

4 Simple (and Fun) Ways to Involve Your Kids in the Family Budget

Having and sticking to a budget is an essential money management tool. But when was the last time you thought of budgeting as a fun family activity? If your answer is never, you’re not alone. According to T. Rowe Price’s 13th Annual Parents, Kids & Money Survey, 62 percent of parents are reluctant to discuss financial matters with their children even though one in three kids say they wish their parents would talk to them about budgeting.
Kids form attitudes about money and spending based on how the adults in their lives handle their finances. That’s why experts recommend involving kids in family budgeting when they’re as young as 3 to 5 years old. By engaging children in age-appropriate discussions about saving and spending, you can help them build solid financial habits to last a lifetime. An added bonus? Learning budgeting basics can be fun!

1. Give kids a spending budget.

As you head to the grocery store, make young children part of the decision-making. Tell them how much money you have to spend on a certain item, like breakfast foods or snacks. Then, talk through three or four choices and compare costs to select an item that fits your budget. As kids get older, give them a spending amount for something they need to buy like a birthday present for a friend or a new pair of shoes. Help them explore options and make the decision on what to buy based on the budget parameters.

2. Talk about trade-offs.

Kids learn by observing what you do. That’s why it’s a good idea to take the mystery out of finances by talking about money decisions as you make them. While you don’t need to dive into all the details about mortgage payments or retirement savings with young kids, share age-appropriate information about the different spending categories included in your monthly budget, such as groceries, housing, utilities, car expenses, healthcare, entertainment, and savings. As unexpected expenses arise, talk about how to shift money from one category to another and any trade-offs that you’ll make. For example, if you dip into savings to cover car repairs, talk about trade-offs you can make as a family to rebuild your savings, like cutting back on restaurant spending or fancy coffee drinks.

3. Set a family savings goal.

One of the best ways to teach children about budgeting is to set a family savings goal, such as a summer vacation or tickets to a sporting event. Map out a plan for how much you need to save each week and how you can do it. If your kids earn an allowance, encourage them to contribute a portion or identify tasks they can do to earn extra money that can go toward the savings goal. Monitor the progress with regular family update meetings and a color-in tracking chart posted on the family bulletin board or refrigerator door. If it’s a long-term goal, break it out into smaller goals along the way and consider opening a dedicated savings account and track the impact of interest earnings. Along with providing tangible lessons in money management, saving for a shared family goal helps make events and vacations more meaningful for kids.

4. Celebrate financial wins.

Family budgets are ever-changing. Hold monthly budget meetings to discuss changes in allocations, saving progress, and upcoming spending needs. Most importantly, celebrate financial successes, both big and small. For example, when you save money by shopping a two-for-one sale or cutting back on the electric bill, do a family happy dance. Or, when you pay off your car or student-loan debt, indulge in a celebratory treat and talk about how you’ll reallocate the monthly payment amount going forward.

Rachel Galvez is the Marketing Partnerships Manager at Arizona Federal Credit Union. A mom of two, Rachel is committed to empowering families with the information they need to make smart financial decisions now and set their children on the path to financial success in the future.


Craft: Get tracking!

Keep your progress toward your family savings goal top of mind with Arizona Federal’s fun progress tracker. Download your copy to print out. Post it somewhere everyone will see it on a daily basis, like the refrigerator door or a family bulletin board. Then, as your savings add up, give your kids the honor of coloring in a section of the tracker – and don’t forget to celebrate the savings milestones all along the way.



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