Virtually all financial experts agree that learning how to make a basic budget is one of the keys to monetary stability. Making the budget alone is not enough, however. Your child also needs to be able to track his money in order to stick to his game plan. The tools your child needs for this might surprise you with their simplicity. Here are some of them, to complement the bankaroo virtual solution.
An old shoebox.
That’s right. A shoebox. The best tracking tool ever for kids. Why? Because it creates a single place where your child can store receipts. Bank statements will show spending, too, but they don’t address spending your child might do from cash he gets, and they don’t show pending transactions. Plus, when kids are young, it’s helpful to have items related to money that are more tangible. Seeing a big box full of receipts might bring a spending problem home more than a single piece of paper with a list of what happened. Very young kids also might not even have bank accounts yet. Keeping the receipts also comes in handy if your child ever has a dispute about how a transaction was handled or needs to return something.
Once your child has his receipts in one place, he can keep a running tally of their total in the notebook. He also can add up the income he has, which might be gifts, allowance or money from a simple job like mowing lawns. From there, it’s easy to subtract spending from income and see if he’s on target for staying within a basic budget. The results ideally never should never be a negative number
A real piggy bank from a store can make saving a more special experience, but really, a jar serves the basic purpose—giving your child a place to store funds—just as well. Ideally, get at least four jars, designating them for savings, education, charity and spending. A fifth jar is useful for fixed, predictable expenses like lunch money. Any time your child makes a purchase just “because,” the money for it should come out of the spending jar. The related receipt then goes in the shoebox. The last step is for your child to add the spending to the running tally in his notebook. Have your child track the subtractions from or additions to the other jars on separate notebook pages, as well.
Much of what your child accomplishes with his jars, shoebox and notebook eventually can be transferred to more technology-friendly methods of tracking. For example, your child might be able to use Microsoft Excel spreadsheets instead of the notebook, or he can use a website like Bankaroo to see how close he is to a savings goal. The reason your child needs to start with the basic items first is that most of the technological options either require computer skills the child might not yet have or represent money in a more abstract way.
Quick Tip: Even though using a notebook, shoebox and jar set usually works with most children, every kid is different. For example, a regular notebook might not work for a child with significant vision problems. In these cases, simply keep the purpose of each tool in mind and find a substitute that takes your child’s special needs into account. All your child really needs is a place to keep physical money, a place to store receipts and a way to add and subtract totals over time.