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Managing a shared budget

Mug with StrawsIn our last two lessons on financial life skills (Relational Budgeting for Kids and Communication Skills for Kids) we used a fun form of the classic game theory question of “The Prisoner’s Dilemma.” In it, the kids were faced with a choice: TAKE, GIVE, CONFESS, or remain SILENT. When we take this a step further and apply it to the concept of budgeting for kids, there are the additional choices of SAVE or SPEND. After dozens of lessons here on Kids & Money, they may already be very much aware of these choices! However, what if they are making these choices on a shared budget? In this lesson, we’re going to introduce the concept of managing a shared budget in preparation for future lessons.

For elementary ages & middle schoolers

First, refer to the previous lesson and remind the children you are teaching about the additional choices of SAVE or SPEND.

A “shared budget” is what most parents/married couples have. And they’ll tell you that the hardest lesson they ever learned was going from a budget of their own to a shared budget.

So, if you have to make those choices on a shared budget, you will want to know what the other partner may choose to do. What if they want to spend it all and you want to save it all?

Thought BubbleLike our previous games, you know that if you are not able to talk to your partner, you probably won’t produce the best outcome for each of you. Our two previous lessons showed us that the best way to handle this is to communicate with your partner on all decisions.

But why would you need to learn about shared budgets now? Yes, it might seem a bit early — but we do think you should be exposed to shared budgets after you’ve mastered the individual budget! This will be helpful for you in the years to come.

For teens

First, refer to the previous lesson and remind the children you are teaching about the additional choices of SAVE or SPEND.

A “shared budget” is what most parents/married couples have. And they’ll tell you that the hardest lesson they ever learned was going from a budget of their own to a shared budget.

So, if you have to make those choices on a shared budget, you will want to know what the other partner may choose to do. What if they want to spend it all and you want to save it all?

Like our previous games, you know that if you are not able to talk to your partner, you probably won’t produce the best outcome for each of you. Our two previous lessons showed us that the best way to handle this is to communicate with your partner on all decisions.

But you’re in junior high or high school – why would you need to learn about shared budgets now? Isn’t it a bit early?

While you should first master the individual budget, the experience of managing a shared budget will help you both now and later. It will further your understanding of the philosophy behind setting goals within your budget and sticking to them. A shared budget will teach you invaluable leadership and communication skills as well.

Remember, in a blink of an eye you’ll be off to college or some other pursuit that has you out on your own — it will come sooner than you think!

Tips for parents: teaching the concept of a shared budget

As you may have gathered, this is “graduate” level stuff and may be more a more difficult concept for the students. Make sure they are able to set up and stick to their individual budgets first.

If they can graduate to a shared budget, that’s great! However, it’s not a necessity. It would be a great life skill to expose them to now — or during their teen years — while the consequences aren’t as great.

Water BalloonsRandom fun

Need a break from budgeting? Have a “water balloon toss” competition. Which two-person team can get the farthest throw-and-catch without busting the balloon?

July 2020

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