We have been lulled to financial sleep by a practice that makes no sense in real life.  (When was the last time you were paid for doing dishes?) Paying children for being responsible members of a family perpetuates the “entitlement” attitudes that have been instilled in our up-and-coming generations. Today’s reasonable parents have the responsibility to change that.

As a financial literacy instructor and author, I flipped the traditional habits upside down. I tested these concepts on my own children before releasing their success in a series of newsletters that was donated to Parent-Teacher Associations across the country.  Updated for today’s parent, this series of blog posts will share these modern concepts of budgeting, saving, and “allowance”.

Teaching “budgeting” FIRST (Not saving! Not earning)

How do you prepare a budget for a 5-9 year old?


This child (who's hand you see) is now 15. The first question she asks on all shopping excursions, to this day, is: "What is my budget?"  You can also have that same result with your Little Ones!

Does your typical shopping excursion sound a little like this:

“Mom! I want that!”

“No, honey.”

“Mom! Can I have that?”

“No, sweetie, we can’t afford that right now.”

What if that same conversation went like this:

“Mom! I want that!”

“What is your budget?”

“$3.00.”

“And how much is that item?”

“$4.99.”

“Now you tell me, can you pay for that with your budget?”

“No.”

As the parent, you do not have to say, “No.” to a purchase request. Give the child the ability to do it themselves.

This concept of introducing budgeting early in a child’s financial capability development may seem to run contrary to the “savings” priority we have heard for some years from many financial literacy experts. “Save 10%” or “Pay Yourself First”. The reason is us adults. We are behind in our savings goals. Every financial article you can find will tell you that. Our relationship with money may have been difficult, elusive, or challenging since childhood. Shift that. Learning budgeting (or, more accurately, “the value of money”) can begin as young as 5 years old; or as soon as a child understands that it takes money to purchase items.

Here is how: For every shopping trip you take your child on with you, provide a nominal budget ("budget" is not "allowance"!) for the child/ren. Whatever amount works for your family is sufficient. $1, $2, $3, or $20. The concept is not how much they can spend, but how they stay within their predetermined budget.

By introducing a healthy relationship to money through budgeting and purchasing, the next step in the process will then be “Saving”. (Follow this blog for that post!)

Audiences have often mentioned the foreign nature of introducing “Budgeting” when they have been taught to “Save”. As your young person develops their financial capability, saving will become part of the natural evolution of their financial health. That will be the next blog post; healthy saving habits.

It is a remarkable process to watch: developing a healthy attitude and approach toward spending that will stay with your little person through their financial life.

Parents have a fatal flaw in desiring to provide their offspring with everything. Many parents have a difficult time saying, “No!” to Junior’s wants. This habit perpetuates irresponsible spending. By providing your little person with their own budget, you will not just save a little on frivolous and impulse purchasing, but you will empower your little one with the concept of remaining within a predetermined budget; something most adults are unable to accomplish.

About Chrissey:

Chrissey began her Financial Literacy career in Hollister, California in 1998. Her very first classes were to preschoolers. Financial Literacy to preschoolers, is as basic as “do not put pennies in your mouth”, but much more advanced to participants well into their retirement years. She has taught to all levels of students in a variety of venues.

As her financial services career progressed, she became more impassioned about financial literacy. If she worked for an institution that did not have financial literacy materials, she wrote her own to facilitate to classrooms she visited.

In 2007 she became certified by Federal Deposit Insurance Corporation to teach their "Money Smart Financial Literacy Program," the non-branded program that is suitable for most ages and venues.

In 2008, Chrissey was selected to serve on the American Bankers Education Foundation’s Advisory Board; collaborating on curriculum that is used across the country. Presented in a workshop format at the New Jersey Coalition for Financial Education Conference, school-aged children with their parents/caregivers benefit from her ability to turn complex financial literacy concepts into easy-to-understand real-world activities based on her experience as a banker, educator and as a mother.

In 2011, she was honored by the Career Wardrobe in Philadelphia PA; primarily for her empathetic approach to financial literacy subject matters in presentations to audiences of women in transition.

As a highly sought after guest speaker, Chrissey has visited thousands of students of all ages and in scores of venues. From traditional classroom education to county resource centers, community groups and non-profits; rarely does an invitation to an audience receive her decline.

After more than 15 years, Chrissey left the traditional banking roles but maintains her financial literacy activities. She is the mother of 3; ranging from 15 to 30 years old, and “Mom C” to even more youngsters in her extended family. She continues to write curriculums and articles on Financial Literacy initiatives for all ages and education levels.