How can I help my child develop a budget?

What guidance does the Bible provide?

Throughout the Bible, God gives us important principles for how to handle finances. High school students are at a critical age where they NEED these principles to learn to manage money before they can get into financial trouble that can negatively impact the rest of their lives. So, it is imperative to walk alongside your child to help them learn how to steward the resources that God has blessed them with. In Proverbs 21:5 (NIV) it says, "The plans of the diligent lead to profit as surely as haste leads to poverty." Truly, to live on a budget is to be diligent. Budgeting is where your child learns to see the big picture of what money they will be receiving in a month, to see what expenses they are responsible for paying, and ultimately to know what "extra money" they have for things like entertainment. Without diligent planning, it is easy for a student to be hasty and shortsighted with their money decisions. They could fall into the trap of thinking that if they have money at a given moment, they can spend it right away. They can also get sucked into believing the current cultural value of instant gratification that says if they want something, they should just get it if they have the money or the credit. Planning diligently with a budget helps teens see the big picture and fight this destructive tendency by growing vital self-discipline.

Things to think about

Self-discipline will not only give them the ability to cover the bills in their life, but it will also allow them to be generous. In 1 Timothy 6:17-19 (NIV) "Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment. Command them to do good, to be rich in good deeds, and to be generous and willing to share. In this way, they will lay up treasure for themselves as a firm foundation for the coming age, so that they may take hold of the life that is truly life." God clearly guides us here to see the true life, joy, and riches are found not in having a lot of money, but in being generous with our money and life. Money will come and go, but living generously will build character, greatly impact others, and leave a positive legacy! So, determining a budget will allow you to talk about the joy of giving generously to God and supporting others. Teens have a great desire to make a difference in our world and through the discipline of budgeting, they can set aside the money each month to save a life through child sponsorship through organizations like Compassion or many other opportunities.

What do I do now?

One of the most important things you can do is to lead by example in your family! As your kids see you living on a budget, giving generously, and sharing with them how you make wise decisions financially they will be shown an example of how they can live. Another important thing you can do to help your child develop a budget is to sit down with them as soon as possible to make a budget. It is important in the process to allow them to own the building of their budget while you offer wise advice and keep them accountable to put it together. The good news is there are countless online tools they can utilize to build their budget that will also help them to continue to track their budget for years to come. Two great and FREE budgeting guides are:http://www.daveramsey.com/everydollar/ www.mint.com

Within these tools you can walk alongside your child as they:

  1. List all of their expenses they will be responsible for, including both frequent bills and infrequent bills. This includes the things that they need each month.
  2. List all of the income they have coming in, including what they will receive from you as parents.
  3. Develop a wishlist of what they want to do with their money in the next year and set goals to save towards the items on their wish list.
  4. Set aside 10% of their resources to give generously to God and what He is doing in our world.

This list provides a starting point for discussion on building a budget for the student to live on. The web resources will provide much more in-depth guidance. The key is to get started, to help them build their budget, and then to hold your child accountable for living to the budget while staying flexible as they learn this vital process.

Want to go deeper?

Leading financial advisor Dave Ramsey shares great advice on how to teach your teenager about money - http://www.daveramsey.com/article/how-to-teach-teenagers-about-money/lifeandmoney_kidsandmoney/

A helpful article providing great Christian principles to build a budget off of - http://lifehopeandtruth.com/relationships/finances/christian-budget/

Practical guidance on what things to think about when creating a budget with your child -http://www.hrblockdollarsandsense.com/ideas-info-for/parents/10-steps-to-help-your-teenager-create-a-budget-for-2015/