Age: 9-11
Chapter 01
Why talk about budgeting?
Talking to kids about budgeting puts them in control of their money - now and for the future.
It helps children grasp that money is limited, and they need to make choices about what to spend and when to save. A budget shows that they can’t have everything all at once, but they can plan how to save for stuff in future. Budgeting is a useful habit to learn early on, before juggling money around a monthly salary.
Plus, once kids understand budgeting, they’re less likely to fall into debt as adults.
Chapter 02
What is budgeting?
A budget is a plan for saving and spending.
It looks at the money you get and the money you want to spend. By comparing the money you have coming in and going out, you can see what you can afford to spend, or where you need to cut back.
If you don’t have enough money to buy something now, a budget can show how long it will take to save enough.
A budget can also show how if you earn more or spend less, you can reach your savings goal faster. On the flipside, if you spend like crazy, you might never raise enough!
For children, a budget can show how they can stretch pocket money beyond sweets and stickers to afford bigger items. As adults, we base our budgets on essentials including mortgage or rent, food, utility bills and transport costs, then aim to save towards bigger items such as cars and holidays.
My budget
- Goal: Trainers £44
- Savings: £20
- Still need: £24
- Money in: £4/week
- Money out: £1/week
- Money left: £3/week
The example budget shows how it will take 8 weeks to raise the extra £24 needed to buy a pair of trainers. But if you spent less, and saved your whole £4 of pocket money, you would only have to wait 6 weeks for the trainers (£24 divided by £4).If you also earned an extra £2 a week by doing jobs in the house, pushing your saving up to £6 a week, you could raise enough to get your trainers even faster, in just 4 weeks (£24 divided by £6).As a parent, it can be hard to resist helping buy something your child really wants. But if you always bail your kids out, they will never face choices between spending and saving, or learn to save up. Talking to your kids about budgeting provides them with vital skills for later life.
Fun Factoid
Even countries have to keep to a budget, not just families. Every year, a politician called the Chancellor of the Exchequer, delivers a budget for the whole government of the United Kingdom. One Chancellor of the Exchequer, Sir Geoffrey Howe, even called his dog Budget.
Chapter 03
Talking to your kids about budgeting
We love a good chat at RoosterMoney, so here are some ideas to kick start conversations about budgeting with your child:
1
This or that?
Next time your child wants to buy something, remind them of something else they’ve set their heart on - a lego set, computer game or whatever they like. If they spend now, how much will it hold up buying the bigger item? Do they still want to go ahead, or switch to something cheaper?
2
Independent living
If your child ever talks about life after leaving home, ask them to list what costs they’ll need to cover, then discuss any gaps. Children often see us buying food and clothes, but may never have considered automatic payments such as Council Tax, mortgage or rent, electricity, water, phone and TV costs.
3
Help with the household budget
Use a bank statement to discuss what bills need to be covered, how you need to allow for essentials like food, clothes and transport, and what is left for anything more fun. Point out costs that occur every week, like grocery shopping, and costs to consider longer term, such as annual insurance bills or a summer holiday.
4
Budget or borrow?
Talk about what happens if you don’t have enough in your budget for essential spending, and how it is more expensive to borrow money, if you have to pay it back with added interest.
Expert View
“Recently my 7-year-old wanted to purchase a Switch game. He had £15 in his piggy bank and asked if he could buy it now. I explained that if he did, he’d owe me £15 plus an extra £3.60 in interest (24% interest). This equated to the next few months' pocket money! He quickly realised how much this money meant to him and changed his mind.”
Chapter 04
Having some fun with it
We all learn best by doing, so here are some fun activities you can try:
1
Sweeten the budget.
Even young children can grasp the basics of budgeting when faced with limited pocket money and a lot of sweets. Give them a set amount to spend in a sweet shop, and they will soon grasp what is beyond their budget, and which combination of smaller sweets they can afford.
2
Design a jar.
Get younger children to decorate jam jars and label them with their savings goals, for example a jar for sweets and stickers, and a separate jar for a skateboard - or use the RoosterMoney app! As they divide their pocket money between the jars, they can clearly see their savings mounting up.
3
Begin their own budget.
Print out the budget activity sheet, and help your child draw up their own budget, based on what they want to buy, what money they already have, and what they can earn from pocket money, chores and birthdays. Show them how they can reach their goal faster, if they spend less or earn more.
4
Child in charge.
Give your child a budget for the weekly supermarket shop, or start on a smaller scale with a meal. Help them make a list of the food needed, compare prices in the supermarket, add it all up and make sure they hit the budget. You could also give them a budget for a family day out, and check they have included all elements including, for example, parking costs, fuel and food.
Parent View
“For younger kids, weekly pocket money is great training for budgeting. They can't have everything and must decide between the sweets or the toy. Saving up for something can also be a confidence-boosting experience. For older kids, a monthly allowance is the next level of budgeting. My son has realised Fortnite won’t keep him warm in the winter, and he’ll have to buy a new hoodie.”
RoosterMoney - Money Primers
- Talking About Needs And Wants >>
RoosterMoney - Money Primers
- Talking About Saving For Goals >>
Useful videos we love
How RoosterMoney can help
Use the "Goals" feature to encourage longer-term budgeting. If you're out with your kids and they want to buy something, point out what they have in their "Goals" list to help remind them about the importance of saving.
Using Goals >>
Budget for any regular spending through the Regulars feature available exclusively as part of our Rooster Card subscription, which can track things like phone bills or subscriptions at the same time allowance gets delivered.
Using Regulars >>
Make use of the “Split Allowance” feature to set how allowance gets allocated between the “Spend”, “Save” and “Give” pots each time it is delivered, so any money to be saved is automatically put aside!
Using Split Allowance >>
