Setting Up a Budget for Kids

My 10 year old, Erica, is the worst with money!  She tries to spend money before she even gets it. I really don’t think she’s learned that, since we’ve never had a discussion about how we can purchase things before we have money for them, but intuitively, she knows it’s possible.  Whenever we go to the store, she wants everything she see’s! I even pointed out to her one time, “Really Erica, because that $1 wall toy will be played with for one day, and then it will end up in our donation bag by the end of the week.” She actually responded with “I know, but I want it anyway.”

One thing that has always worked for my husband and I in managing our money, is following the envelope system. We virtually have envelopes as columns in a spread sheet.  We ‘withdraw’ from the columns when money is spent, and we add to the columns when we get paid. It’s actually kept us out of debt for 15 years! 

So, when I saw this product, called Kid Budget, on the market to teach kids how to use the envelope system, I was pretty excited to give it to Erica.  The kit comes with 1 money bag, 4 money pouches, and a book to teach the system.   Here is a short interview I had with Erica after she read through the book:


Me: What categories did you label your pouches with?

Erica: I have Savings, Spending, Giving, and Tithing.

Me: Don’t you think tithing and giving are kind of the same thing?

Erica: Maybe, but the book said there are places like animal shelters that need money, and I really love animals, so I really want to give them some money. 

Me: OK, what else did you learn from the book?

Erica: That since I like the outdoors, some good ways I could make money is wash cars, walk dogs, and mow lawns to make extra money.

Me: What are some of the things you are saving for in your long term?

Erica: An IPOD touch or Cell phone that can actually make phone calls.


Me: What are you going to use your spending bag for? 

Erica: Earrings and stuffed animals.

Me: So do you think the bags will help you get better control of your spending?

Erica: YES!

I love this book!  It is designed so well. It’s easy to read, the layout is terrific, and kids will enjoy working through it!


Fun Stuff from the book:

  • Pay yourself first!  Fun activity: Calculate how much money you would have in 10 years by saving a quarter a day.  Answer: $912.50
  • Picture of my goal…There is a page where you can cut out a picture of something you are interested in saving for. Great incentive for kids!
  • Jokes throughout: Why Do people call money dough? Because we knead it!
  • ** Bonus!! Check out these free printables!

Disclaimer: This product was sent to us free to review, and Erica loves it!

Related post: Teaching your kids about money!

About the author

Sarah Kimmel

Sarah Kimmel, the Organized Mom

Find out more on Sarah's Google Profile.


  • Great idea to give a child to teach them about being responsible with money and spending. Thanks for featuring this. I’ve listed this as a great Christmas gift for my niece.

  • Thanks for the great post. I always glad when I stumble across stories of parents teaching their children financial literacy. I am even more excited when I see they have included philanthropy in that education. Thanks for the great post. I re-posted your suggestions over on my blog where I try and encourage others to get involved in philanthropy. thanks again


Leave a Comment