Budgeting for Kids

A budget is a plan for what you'll do with your money when you get it. For example, when working adults get paid, they have a plan for that money before they spend it. Think about it. If they spent all their money on fun things right away, then they wouldn't have enough money left over for the not-so-fun-but-completely-necessary things, like the electric bill, the house payment, and gas to fill up a car. That plan to limit spending on fun things, or wants, to make sure you have enough money for necessary things, or needs, is called a budget. Great! So it sounds like a budget is something I don't have to worry about until later, right? When I have bills and living expenses of my own to pay? Well, not necessarily. In fact, if you've ever gotten money for your birthday, and decided to save it for something big rather than spend it right away, well, congratulations! You've already completed a baby step of budgeting, and you didn't even know it. Here's a budgeting plan you can start now, as a student, to make it easier for you as an adult. It's called the 30-60-10 plan. Here's how it works. Every time you get even a little bit of money, from now until you're an adult, try saving 30% of it, spending 60% of it, and sharing 10% of it. So if you got $10, that would mean saving $3, spending $6, and sharing $1. Saving. We know what that is. That's putting money aside for later. Spending. We definitely know what that is. That's buying stuff now. What about sharing? What's that mean? Sharing, in this context, means giving money to a cause you care about. If you've ever bought food for a canned food drive, donated to a charity, or even contributed money to a fundraiser for your school, you have shared money. And it's a great habit to start, even when you're young. So, 30-60-10. Pretty easy to remember, right? If you're already earning money, this is something you can start right now. If not, you can wait until you get a job, which will probably happen sooner than you even realize. Either way, the 30-60-10 plan will help you practice organizing money, so that when you're an adult, with bills and living expenses to pay, it will feel much easier. And, if you're feeling bummed about not spending all of your money right away, just remember this. You still get to spend most of your money. Right? 60%, the spend category, is still the biggest chunk of your money. You're still spending most of your hard-earned money. You're just setting aside some to save and share, so you don't spend too much.