Back To School Budget – A Handy Guide

Back to School Budget- A Handy Guide to Letting Your Teen Practice Money Skills

In this episode, Matt and Charla McKinley discuss the importance of teaching children financial responsibility through a practical and hands-on approach. They introduce a back-to-school budget exercise where kids are given control over their clothing budget, using a Visa gift card to make their own purchases. This method not only teaches budgeting and financial discipline but also instills a sense of accountability and decision-making skills in children.

Back-to-School Budgeting Concept:

– The episode centers around a practical money management exercise designed for teens.
– Charla emphasizes the importance of putting money directly into children’s hands to help
them learn budgeting.
– Matt and Charla discuss how this exercise prepares kids for real-life financial decisions.
Implementing the Budgeting Exercise:
– Charla provides a detailed explanation of the exercise, where parents allocate a set budget
for their teen’s back-to-school clothing.
– She suggests using a Visa gift card to give children a tangible way to manage their
spending.
– The exercise includes creating a budget based on basic, mid-range, and high-end clothing
stores.
– Charla outlines the process: starting with assessing the child’s current wardrobe, determining
the number of new items needed, and setting a budget per item.
– Example: If a child needs five basic tops at $12 each, the budget for tops would be $60.
Teaching Financial Responsibility:
– Charla and Matt discuss the benefits of this approach, such as teaching children to check
their card balance, prioritize spending, and make trade-offs.
– They share personal anecdotes about their son learning to budget for shoes and clothes,
and how he adapted his spending over time.
Dealing with Consequences and Learning Opportunities:

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