What is budgeting?
In simple terms, budgeting is making a plan for how you’ll spend and save your money.
For many of you starting a new year or even a new school, this might be the first time that you’re getting more independence over your money – for travel, lunches, snacks, after-school clubs or going out with friends. It might be up to you to decide how to use this money and make it last. That can be really exciting – and it’s a useful skill, too!
Making smart choices
Budgeting is all about making choices and deciding the best ways to spend and save your money.
Before you buy something, it’s always worth asking yourself a few simple questions. For example:
- Do I need this, or do I want this?
- What’s the difference between needing and wanting?
- If I want something, is it because it’s trendy or will I still want it later?
- If I buy this now, will I still have enough money for the things I need tomorrow?
Top tip!
Not sure if you really want to buy something? Leave it two or three days before you decide. If you’re still thinking about it after that, it might be a positive sign that you really do want it. If not, it’s probably better to leave, and save your money for something else.
To spend, or not to spend?!
This challenge is designed to get children thinking and talking about money. There are no wrong answers.
After school one day, Alfie, Charlotte and Kate head to the cinema. Once they’ve bought their tickets, Alfie is tempted to splash out on a drink and some popcorn. But he also wants to buy some comics at the school book fair tomorrow. What should he do?
A. Treat himself
Alfie can embrace the cinema experience and buy the drink and popcorn.
B. Buy one goodie
Alfie can pick just one item to buy. What does he want more: a drink or the popcorn? Perhaps the group could share something?
C. Save the cash
Alfie can leave the drink and popcorn and just enjoy the movie. He’ll be heading home to have dinner later.
What would you do?
How to look after your money
There are lots of different ways you can stay organised and manage your money. Here are just a few to get you started:
- Use a weekly planner/ budget tracker – get yourself a notebook or iPad and write down all the things you spend money on throughout the week. You can also keep a note of any money you are given for your birthday or for helping around the house.
- The envelope method – divide your money into different envelopes for different jobs. Label each envelope so you know exactly what it’s for, for example: snacks, travel, gifts.
- Use an app (with a parent or guardian’s help) – there are lots of clever apps you can use to help you track your spending. Ask an adult to help you download one and organise it with you.
- Keep your money in a kids’ bank account (with an adult’s help) – where you can save it, spend it and learn ways to manage it.
