If your child gets a bigger allowance or starts to work part-time, she'll have more money to plan for.

In fact, the budget should be completely made over at certain times. It's something that can be adjusted when needed. Remaking a BudgetĪ budget isn't carved in marble. Don't let your child get into the bad habit that so many adults have of putting into savings only what's left over at the end of the budget period-in this case, there's typically nothing left over. The savings portion should be treated as a payment to your child (list it like any other expense). He can then adjust the income or expense sides to balance his budget. Your child can test out his budget at an interactive Web site that lets him enter his income and expenses and then displays the amount he's short (or over) each month.

Your Child's Personal Budget for His Budget Period Some common budget items are already listed. Use the following chart to fill in his personal budget. Now that your child knows all the components in his budget, it's time to put things down in writing. These set-asides will accumulate and be used later when the variable expense comes along. Then, if they don't arise in a certain month, that money can be set aside. Even though they may not be the same each month, it's a good idea to provide a certain amount for them on a regular basis. For variable expenses, make an estimate of what they might be. In making a budget, fixed expenses are listed exactly as they'll be paid or are expected to be paid. Examples of variable expenses your child might have include these:

In some weeks, variable expenses may not even be there. These are also referred to as flexible expenses because they aren't rigid. Variable expenses are the opposite of fixed expenses. Transportation costs (bus fare, gas for the family car).Telephone bill (arising on a monthly basis).Fixed expenses that your child might have include these: Fixed expenses occur each week, and the amount of these expenses generally remains constant from week to week. Every budget has two types of expenses: fixed expenses and variable expenses. Įach item she must pay for or set aside is called an expense. Items whose cost changes from month to month, such as entertainment costs, are called variable expenses. Things that are more or less stable in amount from month to month-for example, donations for charity-are called fixed expenses. If the budget period is weekly, divide by 52. If she pays for an item once a year, such as a magazine subscription, but her budget period is monthly, be sure to divide the cost of the item by 12 and enter only 1/12 of the cost in her monthly budget. Now jot down what she thinks it's going to cost her to pay for them during each budget period. Review the list of items your child has to pay for. For the purposes of this article, we'll call this their budget period. Whatever helps them to manage their money best will work. So, they can have a budget that runs 15 days or 7 days. They may want to use a monthly budget like you, or a budget that runs from allowance to allowance or from paycheck to paycheck (for example, you're paid twice a month, or weekly). Teenagers can probably handle whatever time frame they want to select.They may be better off using a weekly time frame that runs from the start of the school week through the weekend. Younger children may be able to focus only on smaller units of time.Your child's budget can span any length of time. Grown-ups typically use a monthly budget because many expenses-rent or the mortgage, the phone and electric company bills-come once a month. The federal government sets an annual budget that begins on October 1 of every year. For example, if his allowance is $15 a week, his budget for a one-week period should total $15-not a penny more or less. The total dollars your child has budgeted for a certain amount of time must equal the dollars he has available during that time.

Flexible expenses from month to month