Los Angeles, CA (PRWEB) September 19, 2005
If you want to set your kids up for success, encourage them to budget. Say what? As my father shared with me repeatedly, ÂSam, nothing matters to me less than whether or not other parents are encouraging their kids to learn about money. All I am concerned about is doing everything in my power to help ensure the success of you, your brothers and your sister.Â
Making a habit of budgeting money (and time) is a great idea because both are resources that are generally limited. As my father realized, it is prudent to carefully manage resources that are limited. Furthermore, it is wise to emulate winning strategies.
A budget is a success tool. It is also a money plan and a measuring tool. Ideally, it tells us where our money is coming from and when it is coming in. It also tells us where our money is going and when. Corporations use budgets. So do governments. And so do individuals who are serious about success. In fact, they all insist on using them.
Budgets are a part of a structure for success. Budgets help us achieve goals and dreams by informing us at any moment in time whether our chosen earning and allocation actions are moving us closer or further from our goals and dreams. Budgets also aid in anticipating, avoiding and eliminating problems and inefficiencies.
Budgets offer other benefits: (1) they encourage and focus thinking; (2) they give purpose to actions; and (3) they create organization and control.
Budgeting is fun when we realize it helps us create and engineer success. Budgeting is fun when we realize it puts us in the driverÂs seat and creates control. And budgeting is really fun when we achieve a goal or a dream and gain confidence that we can duplicate that success.
The ability of everyone - regardless of income Â to use a budget makes it a fantastic tool. Anyone who likes to win and is willing to pay the price to win can create a budget. All anyone needs to develop his or her budget is a pencil, paper and a desire to get what they want. Because most people do not use budgets, those who do create an advantage for themselves.
If the term budget turns your stomach, then think game plan, strategy, list or journal.
How do we teach kids to budget? (1) The absolute best way to encourage kids to budget is to budget yourself. There is no getting around it. Setting a strong example is an incalculable gift to children and speaks volumes about what we truly believe (as opposed to what we say). (2) Start with small steps. Begin by encouraging your children to develop either a daily or a weekly budget or spending journal. Using pencil and paper, an excel spreadsheet or specialized software have your kids list their sources of income and anticipated expenditures. (3) Review and discuss their entries with them. Be sure their expense entries include saving, investing, sharing and any specific goals they have in addition to regular expenses. Ideally, saving, investing, sharing and other personal goals should be at the top of their respective lists. This will help reinforce that these activities are priorities. (4) At the end of the day or week have your kids list their ÂactualÂ income and expenditures. Compare and discuss the differences with them. (5) Repeat the process.
Like adults, kids love games and incentives. So periodically, consider giving your kids special rewards or matching bonuses for exceptional performance. The idea here is not to be overly rigid or stress perfection, but to introduce kids to a tool that will set them up for success.
Sam X Renick is the author of two financial books for children: ItÂs a Habit, Sammy Rabbit! and Will Sammy Ride the WorldÂs First Space Coaster?; he also produced the music CD titled Get in the Habit!; and is the founder of The ItÂs a Habit! Company, Inc., (http://www.itsahabit.com), a socially conscious corporation dedicated to providing parents and educators with wholesome, entertaining and educational tools that help them encourage children to develop good habits, especially saving money.
Other articles written by Sam X Renick:
Get Kids in the Habit of Saving Early, Not Late! --- Everyday Wealth
Help Your Kids Become Millionaires! --- Everyday Wealth
Five Saving StrategiesÂ Pay Yourself First! --- Kansas City Star
Why Save Money? Six Year Old Knows --- E media wire
American Savings Education Council
Bank of America / Financial Education / Saving and Budgeting
National Endowment for Financial Education (NEFE) Financial Planning Program Student Guide
The Motley Fool Investment Workbook (Motley Fool Books)
Suze Orman's Financial Guidebook: Put the 9 Steps to Work
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