Keeping Track Of Your Money

A spending plan actually is another word for budget. It allows a person to plan for upcoming expenses and ensure that money is available to meet those expenses. Helping your child set up a simple plan now can lead the way to more detailed spending plans in the future.

Children learn most money management concepts by observing parents' behavior. Your attitude toward recordkeeping, balancing your checkbook, or following a plan for saving and spending strongly will influence your child's involvement in setting up a recordkeeping and spending plan.

Using the two-week record of income and expenses that your child has completed, break down items into income sources, fixed expenses and variable expenses, as shown at right. If expenses are greater than income, discuss ways to increase income or decrease expenses. Savings never should be eliminated from fixed expenses. During the discussion, guidance can come from you as a parent, but the final decisions on how to balance the income and expenses should rest with the child.

Borrowing

Even with an established spending plan, your children may have times when they will need to borrow money. Use this opportunity to write a loan agreement that includes a repayment plan. Set a regular payment schedule and assess a late fee if you dont receive a payment by the designated date. You even may want to charge a small amount of interest.

Suggested Activity

Involve children in family finance chores, such as making out checks, mailing envelopes, filing receipts and comparing charge slips to billing statements. Working with your child, estimate income and expenses for a two-week period on the form below. Adjust figures to balance the income and expenses.

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INCOME:
allowance (two weeks)................... __________
earnings (two weeks).................... __________
gifts (birthday/Christmas).............. __________
loans (friends, etc.)................... __________
parents................................. __________
other................................... __________

FIXED EXPENSES:
lunch ticket............................ __________
transportation (bus tickets)............ __________
club dues............................... __________
savings................................. __________
other................................... __________

VARIABLE EXPENSES:
recreation (movies, video rental)....... __________
food, snacks............................ __________
personal grooming (deodorant, hairspray) __________
bicycle repairs......................... __________
hobbies................................. __________
gifts................................... __________
contributions........................... __________
sporting goods.......................... __________
books and magazines..................... __________
other................................... __________

                               SUBTOTAL: __________
                         EXPENSES TOTAL: __________
         INCOME TOTAL - EXPENSES TOTAL=: __________
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