Learning to budget your money
Budgeting is when you plan your spending and put aside amounts money for specific things.
You can create a budget for anything you spend your money on, like food, gifts, toys, and clothing.
Here, we’ll talk about when you should create a budget, how to plan your spending, and ways you can learn more about budgeting.
When to create a budget
Budgeting can be helpful for planning your future spending and planning for specific days or occasions.
You can create a monthly budget to divide your money up between the different expenses and activities you have planned in the weeks ahead. This way, if you stick to your budget, you won’t run out of money!
You can also create a budget for a special event, such as a shopping day, a weekend away, or a vacation somewhere.
How to create a budget
When you’re creating a budget:
- Start by writing down how much money you have to spend.
- Next, write a list of all the things you need to pay for.
- Finally, write down all the things you want to buy.
Tip: check out our post on needs and wants for more help!
Once you have your list, you can decide how much money you can afford to spend on each thing.
For example, imagine you’re going to the mall for a day out for shopping and lunch and you have $30 to spend. You want to buy something at the toy store and get yourself some lunch. Your budget might look something like:
Today at the mall:
- $30 to spend
Toy store: $20
Here’s the prices for the items in each of the stores:
- Teddy Bear: $10
- Book: $15
- Action Figure: $20
- Hotdog: $5
- Sandwich: $8
- Burger: $10
Now that we have a layout of all the prices, you can see we have a few options. You could buy the action figure and the burger and use all of your money. Or you could buy the book and the hotdog and have $10 left over for later.
Try this: What other combinations can you find that stick within the budget?
Tips for budgeting
When creating a budget, it can be a good idea to leave a little extra money aside in case something unexpected happens.
For example, imagine you went to the mall and bought the action figure and the burger… And then dropped your burger on the floor! You wouldn’t have any money left over to buy a new lunch. However, if you had planned your budget to leave a little bit of extra and chosen the book or teddy bear instead, you would have enough money left over to buy a hot dog.
When you’re creating a budget and listing out your needs and wants, it’s a good idea to plan a category for savings. That way, you’re always making sure you have enough to set a little bit of money aside for something big you want to buy in the future.
Budgeting in the future
On top of helping to plan for a specific event like going out, budgeting can also help with long-term things.
For example, many adults use budgeting to help them stay on track when it comes to paying for living expenses. They divide up their earnings into many different categories to be spent over the month or year. This helps them stay on top of everything and make sure they have enough money to pay for needs.
Every month, adults might have to plan a budget for rent, groceries, house bills, a bus pass, and savings. This will help them understand how much money they’re spending and how much money they have left over for wants.
Ask your parents or guardian if they’ve ever made a budget for anything. If they keep a monthly or even a yearly budget, ask if you can watch or help them do it next time!
With SideKick card, you can create a budget by putting money into different categories. This will help you plan your spending and keep track of how much is left in your budget.
A budget can help with a lot of things when it comes to learning where and how to spend your money. It can help you plan for just one day, or help you track your spending over a long period of time, so you can build smart spending habits!