Why talk about budgeting?

Talking to your child about budgeting might seem a bit daunting. Surely childhood should be carefree and finances should be left to the adults, right?

I don’t know about you, but I’ve lost track of the number of people that have told me they wish they’d been taught about money when they were younger (and lessons were less costly).

The pandemic has spurred conversations with kids about money

In fact, T. Rowe Price’s 13th annual Parents, Kids & Money Survey, which sampled over 2,000 parents and their 8- to 14-year-olds, reveals insights into the pandemic’s impact on families and the findings suggest that parents feel an increased urgency in the need to have money conversations with kids.

While it’s unfortunate that the pandemic has affected the financial well-being of so many families, the good news is that parents are having more conversations with their kids about money.

Research shows that kids, who have had frequent money conversations with their parents, are better positioned for financial responsibility in adulthood. Kids often pick-up on the unspoken cues and stressful situations can be powerful teaching tools. Cents for Kids wants to support parents with the tools and resources they need to take advantage of everyday teachable moments.

Managing money is a life skill

Your ability to manage money effectively impacts just about every aspect of our lives. Think of everything we do, day-in and day-out—where we live, what we eat, the clothes we wear, the cars we drive, health care, education, kids, holidays, gift giving—you name it, money is involved. Learning to think critically about the decisions we make with our money takes a lot practice and delaying these lessons just steepens the curve.

Budgeting helps children grasp the fact that money is a finite resource and we need to make choices about what to spend and when to save. A simple budget can help illustrate that they can’t have everything at once, but they can make a plan for how to earn and save for the things they want.

The road to financial independence is paved with bad decisions and their consequences

To be clear, we’re not suggesting that you force your child to stick regimentally to a plan. In fact, it’s the choices they make and the consequences they face (good and bad) that create the learnings and enhance their financial decision-making abilities.

By the way, when your child makes a money mistake, DON’T BAIL THEM OUT—buyers remorse is best learned through experience. Pocket money is a tool to support meaningful conversations and lessons about money, not a substitute.

Learning to spend within your means and plan ahead is foundational to successful money management. After all, financial independence doesn’t come from how much you make, it comes from what you do with that money.

Inside this issue

This month’s newsletter offers tips for teens and practical advice on how to introduce the basics to beginners as well as the usual conversation starters, activities and downloads that will help you take advantage of everyday teachable moments.

While your teenager is unlikely to have a fulltime job or monthly bills to pay, learning how to save and spend responsibly is a life skill that takes practice.

This month’s insight offers five budgeting tips you can share with your teen to help get them started on the journey to financial independence.

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Talk about how the money they receive is to be divided between spending, saving and sharing and decide together how much will go towards each.

This is the ‘fun money’ to be spent on smaller, inexpensive items like treats, toys and even games downloaded to a parent’s tablet or phone.

Rule of thumb:

Allocate 50% - 80% of money received to spending


If you give your child a weekly allowance, use coins and small bills so that it’s easier to divide.

A good rule of thumb is to give your child €1 per year of age, expecting them to help out around the house in age-appropriate ways.

This money is for larger purchases, such as video games, costumes and more expensive toys.

Rule of thumb:

Allocate 10% - 25% of money received to savings


Use a photo to motivate your child and remind them of what they’re saving for.

Help your child set small, obtainable -goals—if saving takes too long, many will lose interest. If your child has a big goal, suggest jobs they can do for extra money or consider a matching programme to keep them motivated.

This money is for helping others, gift-giving and donating to causes they care about.

Rule of thumb:

Allocate 10% to 25% of money received to sharing with others.


Help your child find causes they care about. The Charities Regulator offers advanced search options that allow you to filter by purpose and location.

Explain to your child how the money will be used.

Conversation starters

Next time your child wants to buy something, remind them of something else they’ve set their heart on. Explain that if they spend on this item, it’ll delay the purchase of the other item. Do they still want to go ahead? Maybe opt for something cheaper instead?

Talk about what happens when you don’t have enough money in your budget to pay for the things you need and how it’s more expensive to borrow money when you have to pay it back with interest.


Even young children can grasp the basics of budgeting when faced with limited pocket money and a lot of choices. Give them a set amount to spend in the sweet shop and they’ll quickly come to terms with what they can and can’t afford.

Give your child a budget for the weekly food shop or start smaller with a meal. Help them make a list of everything they need, compare prices as they shop and make sure they don’t overspend. You might also give them a budget for a family outing and make sure they factor everything in—including costs for petrol and parking, for instance.


Budget Worksheet Keep track of how much money you have coming in and what you’re spending it on.

Goal Tracker Set yourself a savings goal—when you have a target to hit, this will help you focus.

Budget Review Worksheet Review how you’re earning your money and what you’re spending it on.

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