Budgeting basics

Learning about managing money and using budgets is a key skill we all need to master. Whether you’re a parent, grandparent, step-parent or guardian, helping young people learn how to manage their money early can help them build good habits for the future. You don’t need to be an expert on money or budgeting to use this easy-to-follow home learning activity.

However, you plan to help build your child’s knowledge it’s useful at this stage to be open about the realities of how much things cost, whether that cost is rising and how you have had to adjust your own spending to manage some of the essentials.

Ask your child if there is something they dream of doing or owning, or somewhere they have always wanted to go. This could be going for a day out shopping with friends, or maybe owning the latest games console. Whatever it is, it’s likely that there is a cost involved so explain to your child that budgeting can help them plan their spending and saving.

Talk to your child about what they think a budget is, then watch the film together so they can hear from someone else about keeping track of money. The film asks your child to help Nia set a budget and spend the money she has saved sensibly. They can download and use the worksheet to record their answers.

After watching, talk about whether they managed to stick to Nia’s budget, whether they had money left over that they could save, and what they found easy or difficult about the activity.

You could share a time when you created a budget, such as the weekly food shop, and give examples of income and expenditure.  Talk to them about how you have prioritised your own spending to focus on essentials and be open about items you have cut back on due to having less money, for example because heating costs may had risen. 

Children wouldn’t necessarily know about the knock-on impact, and this helps to teach them about budgets.

Next, chat through the words below and their meanings:

Income – how much money you have or will receive

Expenditure – how much money you’ll spend

A budget takes income and expenditure into consideration to make sure there is enough money to buy certain items. Explain to your child that creating a budget is a great way to ensure they have enough money to buy the things they want or need.

Encourage your child to complete the budget planner on page 2 of the worksheet for a time period of their choice. Is the remaining balance enough for the item(s) or experience they mentioned earlier? How long would they need to save up to reach this goal? Get them to consider any changes they could make to their budget planner to help them meet their savings goal sooner.

Setting and sticking to budgets can seem tricky to grasp, but breaking it down into goals that are easy to achieve helps children learn to plan and make the most of their money. This will help them form good budgeting habits for the future.