The Baby Budget: Guide to Raising Your Lil’ One

Baby GOT Guap.

Teaching your children early on how to work within a fixed budget can go a long way in helping them gain and maintain financial awareness and stability in the long term.

Most people don’t realize this, but even very young children can grasp the idea of budgeting. As they grow, and you include them in your home’s budget planning, it helps them inculcate healthy spending habits from the outset.

Teaching your kids how to budget money is a very important life skill which you can easily teach them from an early age.

Here are some useful pointers on how to get started and how to include some fun budgeting activities into the effort:

Teaching kids about money- some pointers

  1. Saving for the future

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It isn’t difficult for kids to fall into the mindset that most adults do; instead of focusing on savings and long-term goals, they look for instant gratification and end up spending way more than they should.

When you are teaching kids about money, you need to first make them understand the value of saving.

Most kids don’t understand the value of setting some money aside for future, more important goals.

  1. Use a children’s budget worksheet

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There are certain budget activities for students you can try, to impress upon their minds, the importance of saving. Set up an allowance for your child like jars that divide their money between what they can spend, save and donate.

You will also find a number of budgeting worksheets printable online that you can use in this teaching.  Here’s one HERE

This will help them better keep track of all their savings and things they have spent their allowance on.


  1. Tie allowances to chores

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This is another effective way to teach kids the value of money. When you tie their allowance to chores, they know that they won’t get their allowance if the chores aren’t completed.

This is a reasonable arrangement, but when they falter on this and don’t get an allowance, it means they won’t be able to focus on their budgeting habit either.

The other side of this coin is that chores are something every member of the family must do, without expecting an allowance for it. However, the allowance is no more than a teaching tool for children to learn how best to manage a steady flow of money.

An app that converts chores to a credit score and teaches Financial Literacy in a fun, engaging ways is coming to the app store soon!  You can sign up to join the beta here


  1. Focus on money management

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When you give kids a lump sum amount as an allowance, they could be tempted to spend it on small items they are attracted to when you take them to a supermarket.

Just giving them the cash and budget sheets is futile if you don’t teach them how to manage that money.

You need to consistently talk to them about saving money for things they really wanted and which would be of better use. The guidance you provide now and that slight nudge in the right direction can help them become smart spenders later in life.


  1. Reassess your approach to money

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Slightly older kids would need more than this basic guidance when it comes to money management. Children in the age range of 15-17 often pick up mixed messages from their parents.

The latter rarely realize they are sending out the wrong messages while doing certain things for their family and home. 

Maybe you and your spouse complain about how tight your financial situation is and before long you start planning a family vacation. Sometimes you discuss how you can’t afford to buy a certain thing and then you go ahead and purchase it soon after.

While we have learned how to balance out things and prioritize certain family expenses while curbing others, that aren’t what our children see.  

The one way to navigate these challenging situations is to include your children in your family’s broader financial planning. In no way does this mean you have to include them in every single financial discussion and plan.

But if you give them a fair idea of why you do certain things and take certain decisions, it helps them understand this situation better without defocusing from the saving aspect of it, which makes it one of the best money management activities for youth.

Maintain consistency.

Even when you put in a considerable amount of effort and time into teaching budgeting to students, you will find that it isn’t always smooth sailing. But when you see your kids making small, smarter spending decisions, you will know your efforts haven’t been futile.

This learning is cumulative in nature and when you persist and maintain consistency in the way you show your kids the ropes to smart budgeting, you will see noticeable results.

They will begin to differentiate between wants and needs which will make your guidance worthwhile for them in the long-term.

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Written by John D. Saunders

John is a Marketing Strategist and Consultant with a knack for financial literacy. As the Founder of 5Four Digital,
a Marketing Agency in Miami, John leverages his understanding of money management and Marketing to create financial opportunities.

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