Our new, in-app Money Missions are designed to accelerate your child’s financial education and help us achieve our mission to make every kid smart with money. Now, when they log into their GoHenry app, kids can watch fun animated videos, take quizzes and earn points and badges. You can use your GoHenry parent app to track your child’s progress; when each lesson comes to a close, another one begins, and your child will unlock new levels as they progress.
Budgets & plans is the seventh Money Missions topic. If you’ve struggled with teaching kids how to budget, or your child has a habit of spending all their allowance on the day they receive it, teaching them how to create a monthly budget can help them get more from their money.
Encouraging them to set money aside for saving and giving and teaching kids and teens to budget reduces the chances that they’ll run out of money before the next payday. Keep reading to find out the best way to explain the benefits of budgeting to your child.
What is a budget?
A budget is a plan we make for how to spend or save money. This could be a regular weekly or monthly plan, or a one-off budget for a special event or specific items, such as a video game, a concert, or vacation money. We can also use a budget to help us reach our savings goals.
Budgets help us ensure that we have enough money for our needs and wants, and won’t run out of money unexpectedly. Adults have to budget for more than kids, such as a place to live, household bills, and food to eat. It’s a good idea for kids and teens to learn how to budget early on. Getting used to working with the amount we get because even as adults, we make a certain amount of money and need to cover all payments and expenses with that amount. Once it’s gone, it’s gone!
Creating a Budget
When we’re making a budget, the first thing to think about is how much money we have coming in during the week or month. This is our ‘income’.
The next step is to work out how much of that money we plan to spend, also known as our expenses. Once these essentials have all been covered, we can then decide how much of what’s left of our income we plan to save or give to charity.
When budgeting, it’s important to keep track of what we spend, so that we don’t run out of money. Remember, our expenses should never be more than our income – and if we overspend on something that means we’ll need to cut back on something else.
A budget is a plan, but plans can always change. Some weeks or months we might have a little more money than others, which means we can afford to spend or save more than usual. But other times we might need to cut back on spending, especially if an unexpected expense – like a spontaneous activity with friends – has used up some of our money.
Want to teach your kids all about earning, saving, and budgeting money?
Create a GoHenry account today and gain unlimited access to our new, in-app Money Missions. These feature fun videos and quizzes, designed to teach kids about finances and build crucial money skills from an early age.