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Financial Responsibility for Your Kids!

Be sure to talk about financial responsibility with your kids! Take the time to read this article together and complete the exercises – it will give them valuable information for their future!

Have you ever heard the saying “money doesn’t grow on trees”? Then where does it come from? There are many sources of income like getting a job, making money on investments and even getting gifts from family and friends. But what do you do with that money? What should you do with it? Let’s assume that you have income.

Now – it’s time to create a BUDGET – a budget is a plan that shows how much money comes in and how much money goes out. Keeping a record of your income and spending can provide you with useful information. It can help you plan for the future.

A budget looks at MONEY IN – this is your income, and MONEY OUT – these are your expenses. Expenses can be things that you NEED such as food, rent or transportation and things that you WANT such as ice cream, a vacation to the beach or anew pair of sneakers. Savings is also MONEY OUT – and it is the money that you put away for a rainy day. You can save for short term things such as a trip to the beach, or a new computer, or you can save for long term things such as a new car, college or even retirement.

EXERCISE: People have different ideas about needs and wants – what is a need or want for you and your family may be different than another family. To one family, a car may be a necessity, but to another family living in a city for example, a car may be a luxury. Sit down with your parents and answer these two questions:

  1. What are the things that you really could not live without?
  2. What are the things that would be nice to have but are not necessary for your survival?

EXERCISE: One thing is for sure – budgeting involves making CHOICES. YOU have to choose what to do with your money.

  • How much should you SAVE?
  • How much should you SHARE with a charity, and what charity?
  • How much should you SPEND?
  • What should you spend it on?
  • What are you willing to give up to get what you want?