Whether your kiddo is 8 or 16, it is the perfect time – right now – to get them started on using a Kids Money Envelope Budgeting System to manage their money. This teaches them how to budget, save and spend their money wisely as they grow up to young adults. These kids will rise to be confident budgeters going into college and adult life.
I wish I could line up all your kids in front of me and get them all started on this amazing journey they are about to embark on. I love seeing the transformation as they start to build strong relationships and respect with their money. Since you are here, you most likely have been enjoying the benefits of cash envelopes and this budgeting approach has made a difference in your life.
📒 Why This Works
It’s Tangible – Using the money envelope system helps them SEE where their money is going as they write out each transaction on their own envelopes. These are no longer imaginary numbers or numbers they are going to forget – they are marked in their own handwriting on the envelope.
It’s Hard to Give Up Cash – The kids have to write down everything that they spend out of their envelopes, which makes this a visual activity. As adults, we know it is much harder to give up cash vs a quick swipe of the credit card. Kids will feel the same thing.
Teaches them Real Life – So many schools no longer offer any sort of money management skills, so kids will leave high school without official training. It is on the parents to extend our knowledge and give them the best chance of financial success.
📎 What’s Included
Cover Sheet – You can turn this into a cool binder to keep track of budgets, envelopes, and savings.
Monthly Budget – The top section is the INCOME and the bottom section is the EXPENSES. Kids usually don’t have that much, but it’s important to get them started and to fill out both sections weekly.
Money Envelopes – There are four different colors for them to easily make a quick glance at which one will need to be used at Target or at Starbucks. These will work for a month at a time. Just make sure that they are filling in each thing they spend their money on.
Save, Spend, Share – Track money to Save, Spend and Share on this sheet or print out additional envelopes to do the same thing. The concept here is if Suzie gets $10 for allowance, Suzie and her parents will need to decide how she divides up that $10 among Saving, Spending, and Sharing.
❗ Expert Tips
As parents, it might help to also set limits on envelopes. If you have them take $20 and split it between Starbucks, Target, and Clothing, you may want to assist in how to divide the $20 into each envelope. Work with your rising budgeter to make decisions.
Expect that this is going to be hard for the kids unless you have a natural saver. Be patient, spend a lot of time with them going over this again (and again, and again). This is not a one-and-done project. You are the coach for a long time, teaching them the art of saving and spending wisely.
Set up agreements with the kids on what to do with excess money at the end of the week. Don’t change the rules midstream.
If you don’t know which categories to use, choose those that are hardest to deal with first. A friend of mine has a manicure/pedicure one because she could go crazy in that area if she doesn’t limit the amount she spends. Another friend is a little too much into Starbucks, which is why I bring it up all the time. We all love Starbucks! But until there are endless amounts of money, we have to set up parameters.
Set aside a Ziploc bag or an extra envelope for it. Before the family starts doing this, set up parameters on what to do with the change. You can have them donate it, but it all into savings or even trade-in to get $1 each time it reaches that much and then they can put it back into their spend envelope. It is really up for you guys to decide at the beginning though.
Download all seven pages of the free Kids Budget Planner and get your kids started on their own envelope system.