The pre-teen years are great for reinforcing budgeting skills learned throughout childhood. This is when the need for money becomes a bit more prevalent. Kids may want to go to the movies with their friends, run to the local candy shop, or buy that new trendy item.
One method to use to reinforce budgeting is to remind your pre-teen about the 50/50 rule. Half of money they make from allowance, dog-walking, babysitting, or any other side jobs needs to be put into savings and the other half can be spent. This not only helps improve their financial responsibility, it helps set them up for success when they need a down payment on a car, need the first and last month for rent deposits, or even purchasing their first home.
I highly encourage all pre-teens to get a savings account if they haven’t already. That way they have a safe place to put their saved money where it also won’t be a temptation. While having a savings account is a big step in the right direction, knowing how to care for a savings account is also just as important. The pre-teen should be taught how to reconcile their account monthly so they know how much they are saving and so they can double check that the bank didn’t hit them with any fees. It should not cost any money to have a savings account. If it does, look for an account elsewhere.
The other 50% of the money they earn can be spent however they want. The most valuable lesson for the spending percentage is saving up for something that takes a bit of time to get to. This is a very rewarding task and teaches a work ethic as well.
For the parents, it is also important to decide what types of things you will require your child to use their own money for. While you may pay for your child to go to the movies, maybe any movie theater snacks are their own responsibility. It’s important to start slow as they are still dependents.