Hopefully your kids are doing chores and earning money. A budget does not have to be an instrument of torture. It should be a habit. The goal is to visually show your kids how a budget works.
Get 4 clear plastic jars or pouches. Label them and divide the child’s money into: Charity Jar- 10%, Quick Cash- 30% (instant gratification), Medium-Term Savings- 30% (larger items to save for), and Long-Term Savings- 30% (college or a car). Let your older kids research charities to whom they want to donate. Steer the younger ones into a direction—maybe they want to give to sick children, for instance. Quick cash is immediate gratification. They worked hard so they get to spend some money, guilt-free. You set the rules. If it’s no candy, for example, those are the rules. Let the kids learn from their choices. Medium-term savings teach the rewards of pushing off instant gratification to save for something larger. You can match dollar-for-dollar if the purchase is large. Long-term savings is just that: college, a car, or other big purchases. This is the money that is just saved and not touched. Repeat: not touched.
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