Easy Budgeting for kids: How To Teach +Free Printable (2025)
“I wish we were rich and could buy whatever we wanted!”
Sound familiar? My kids say this every time I turn down their latest toy request.
Do your kids say the same? Or maybe they spend every dollar they get faster than you can say “savings jar”?
Teaching kids how to budget doesn’t have to be overwhelming. With a few simple steps, you can help them learn smart money management skills now that will set them up for a lifetime of financial success.
Let’s show them how to earn, save, and spend wisely!
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Teaching Kids How To Budget: Step-By-Step
By age seven, kids already have a basic understanding of finance concepts based on what they’ve experienced (source).
Yet, over 30% of parents never discuss money with their kids (source).
There are a variety of ideas on how to teach kids budgeting and wise money management.
The most effective approaches include money practice and real-life application.
Let’s break down basic budgeting ideas for kids into 5 steps.
Step 1: Talk About Money
Start by talking about money regularly! Kids can easily miss the money transactions happening around them, especially in a cashless world.
Turn everyday activities into teachable moments:
- At the grocery store, discuss item prices and comparison shopping.
- At the ATM, explain where the money comes from.
- At a restaurant, show the bill and talk about tipping.
- At home, highlight daily expenses like water, electricity, and heating.
Last week, I told my boys it cost $53 to fill up my car. They were shocked—it really put their allowance into perspective!
Connect work and money. Help your kids understand how your family earns income and manages monthly expenses. These conversations build a foundation for smart money habits.
Step 2: Find The Right Approach
Choose one or combine the approaches below to teach kids how they’ll receive and earn money:
1. Weekly Allowance
Dr. Jazmine, The Mom Psychologist, recommends using a weekly allowance as a teaching tool, separate from chores. Kids receive a set amount each week (e.g., $1 per year of age or $5 for younger kids). This avoids power struggles over chores while focusing on money management.
2. Commission-Based Earnings
Dave Ramsey’s method ties money to effort: kids earn a commission for extra work they complete. This approach instills a strong work ethic and reinforces the principle that work = money.
What They Share
- Both approaches suggest dividing the money into three categories: spending, saving, and giving as a budgeting tool.
- They advocate that kids use their own money to buy purchases beyond the necessities.
- Both experts agree: kids shouldn’t be paid for regular daily chores. These tasks foster responsibility, curb entitlement, and teach kids the value of contributing as part of a family team.
In our house, we combine approaches: Our kids get an allowance and can earn extra money through additional chores. This keeps money management discussions regular while reinforcing the work-money connection.
The key is finding what fits your family best, with a focus on real-life application and practice.
<<Check out this list for appropriate chores for your child’s age.>>
Step 3: Spend, Save, Share: Kids Budget Categories
Teach kids money management with a simple system: label three jars or envelopes as Spend, Save, and Share.
For example, we give our kids (ages 5 and 7) a $5 weekly allowance, split into Spend ($3), Save ($1), and Share ($1). This easy 60-20-20 Rule Budget is perfect for beginners.
Decide how to divide their money and use the free printable at the bottom of this article to track it. Keep it simple!
Pro Tip: For younger kids, use clear jars or a moonjar toy bank so they can see their money grow. Older kids can use envelopes or open their own bank accounts to manage and divide their funds.
Spend Budgeting Category For Kids
Let your kids enjoy their spending money however they wish—but once it’s gone, it’s gone.
This can be tough for parents. We don’t want to see our kids blowing money on junk. But it’s an important part of the learning process.
We recently went to a fun event and my kids bring their spending money. They bought cotton candy and toys for $20 each.
Ultimately we ended up with mostly uneaten cotton candy and toys we haven’t played with. It became a great teaching moment on spending!
‘Spend’ money should be used for your child’s wants! While you’ll still purchase necessary items for them, use this video as a reference when your child “needs” something that truly falls under the want category.
Save Budget Category For Kids
Saving doesn’t come naturally to all kids, so early practice is key. It teaches patience and goal-setting.
- Younger kids can set a savings goal for a larger item they want.
- Older kids may want to start saving for something bigger, like a car.
- If your child saves diligently, consider matching their savings or helping with the final amount. This encourages motivation and reinforces the value of saving for big purchases.
*Make it fun with:
Share (or Give) Budget Category
The share budget category, stresses the importance of giving. This isn’t easy for most adults and it may not be easy for your child.
Whether it is to a place of worship or to make a community impact, practice setting aside money to share with others.
At some point, your child will see how giving affects others and they will also realize it has a positive impact on them!
Whatever the spend, save, share budget category system looks like in your family, don’t overthink it. Come up with a plan that works for your kids ages and fits into your family life.
Step 4: Set SMART Money Goals
Now that you have the budgeting system set, help your kids set a goal for a bigger purchase. Setting a SMART goal will teach them to create specific, measurable, and achievable goals.
Display the goal and a picture of the item to keep them motivated.
Example: I will earn an extra $20 by the end of the month to buy a new video game. To do this, I’ll ask my parents for a list of extra chores I can complete each week.
Related: 10 Summer Jobs For Kids To Earn Money
Step 5: Model Budgeting For Kids
Remember how closely your children are watching you?
For your kids to be successful, parents must set up a monthly budget and use it. Your kids need to see you living by a household budget and implementing the tools you are teaching them.
You may be familiar with different approaches to budgeting for personal finances like the 50-30-20 method. 50% is for needs, 30% is for wants, and 20% is for savings. This type of budgeting is common because it gives you flexibility and lets you easily see where your money is going.
Other basic budget rules can include:
Choose what works well for your personal budget.
The 24 Hour Rule
You also need to model avoiding impulse buys. This can save your young spenders from big mistakes in the future.
When you are considering a bigger purchase, talk out loud about how you are going to wait a day before buying to see if you still really need the item. Encourage your kids to do the same.
Free Printable Budget Tracker for Kids
A budget helps kids plan for how they want to spend their money AND prepares them for successful financial futures.
Use the free budget worksheet printable to help your child get started. ⬇️
Great Kids Budgeting books
Need more help? Books are an easy way to introduce new topics to your kids.
A Boy, A Budget, and a Dream by jasmine Paul (Ages 4-8)
Follow two siblings in this book as they use their money in very different ways. One of them will have to learn how to budget or give up on his dream.
Money Ninja: A Children’s Book About Saving, Investing, and Donating by Mary Nhin (Ages 3-11)
Join Money Ninja on a journey of saving, investing, and donating.
Investing for Kids: How to save, invest, and grow money by Dylin Redling (Ages 8-12)
Your kids will get money savvy with the practical advice in this book.
Related: 15 Kid-Friendly Stocks For Teens
Smart Money Smart Kids: Raising the Next Generation to Win With Money by Dave Ramsey and Rachel Cruze
Told from this dynamic father-daughter duo, this book gives practical advice on how to start your kids on the right path to becoming money-smart adults.
<<Look here for more great books about money for kids!>>
