I passed a mother and son at the end of the checkout line. She was showing her son (who I guess is no more than 5 or 6 years old) the receipt of his recent purchase and very delicately trying to explain to him how much money he had left. I couldn’t help but smile when I walked by. I can remember when I was very young and how important a dollar was. Each penny found on the street was like winning the lottery. A few penny’s sometimes made the difference between a regular size or a king size candy bar.
It reminded me of a time with my mother. She started teaching me at a very young age how to manage my money. I started around the age of 6 or 7 the 30, 30, 30, 10 system. It’s broken down like this.
Anytime your children receive money (deposit) whether it’s for mowing the yard or for their birthday. It goes towards this budget.
- 30% of each deposit goes into a “Long Term” savings account.
This is a savings account that you never touch. (I bought my first car with this account when I was 16.)
- 30% of each deposit goes into a “Short Term” savings account.
This is a savings account that is set for small term goals. (Christmas gifts, Special Toy, etc.)
- 30% of each deposit is for “Quick Cash” or spending money.
This is cash that you can keep at home or in your pocket. (Gum or Candy, Movies with friends, hobbies)
- 10% is for the charity.
This is a great system and really works to help teach kids how to budget at an early age. If you haven’t already worked out a system with your kids give this one a try. Get 4 different jars and put them in their room with labels “Long Term”, “Short Term”, Quick Cash”, and “Church” and see how well they stick to it. When their old enough to apply for a savings account I recommend moving the “Long Term” savings to a bank. This is just so you don’t have a crazy amount of cash sitting around the house.
I hope this helps and encourages you to start a budget with your kids if you haven’t already done so. Have fun!