Budgeting basics

Help foster budgeting confidence 

This worksheet helps your child practise simple budgeting skills using a realistic scenario. They’ll make choices about how to spend money, add up costs, and work out what’s left over – all key skills for managing money in everyday life.

You don’t need to have all the answers. The aim is to help your child think, talk, and reflect as they complete the activity. You may wish to have a calculator handy. 

What is budgeting?

Start the activity with your child by asking them what they might think budgeting is before sharing that budgeting means planning how to use money before it’s spent. It involves:

• Knowing how much money you have
• Deciding what you want or need to spend it on
• Adding up costs
• Checking whether you have money left over, or if you need to change your choices

For children, budgeting helps make money feel more real. It shows them that choosing one thing often means not choosing something else. You could share some examples of things that you budget for. 

1. Nia’s choices  

Next, using the worksheet, ask your child to read about Nia, who has a set amount of money to spend. Looking at the list of items, each with a price, ask your child to choose five things they think Nia could buy. Open up a conversation around needs and wants. Some things you could highlight to support this is travelling to work, could the bike be used instead of a bus fare, clothes may be a need but not designer, phone credit could be both a need and want. Could any items be sourced second hand?

You also support by:

• Asking what attracted them to those choices
• Talking about which items feel more important and why
• Noting that different people would choose different things

2. Create Nia’s budget 

Next, your child should:

• Write down the five items they’ve chosen
• Add up the total cost
• Calculate how much money is left after spending
  This part focuses on basic maths and money skills, provide the appropriate level of support for your child based on their ability. 

You might ask:

“How did you work that total out?”
“Does the total match what you expected?”
“What happens if you swap one item for another?”

3. Reflect on choices

Once the calculation is done, encourage your child to think about the outcome:

• Is there money left over?
• Did they have to make any trade‑offs?
• Would they change anything if they did it again

There’s no single “right” budget – the learning comes from explaining decisions and understanding the impact of choices. Explain that when you make a budget, different things can happen, and that’s all part of learning. If you have money left over, it means you planned carefully and still have choices, like saving it for something later or keeping for as and when you may need it. If you spend more than the money you have, that’s okay too – it just means you might need to change a choice, swap something for a cheaper option, or wait and save first. Budgeting is a skill which gets easier at with practise, you may want to encourage your child to make a budget of their own using the second page of the template, you could research the price of items using the internet. 

How you can support without giving answers

• Encourage your child to explain their thinking out loud
• Use gentle prompts instead of corrections
• Let them make (and fix) mistakes – that’s part of learning
• Reassure them that budgeting gets easier with practice
• You could also link this to real life by talking about:
  • Planning spending for outings or treats
  • Saving up for something they want
  • Why it helps to know how much things cost before spending

To explore needs and wants further explore our interactive tool  with your child.