Wednesday, January 30, 2008

Teaching Children, Part 2: Budgeting

Part two in our series on teaching children how to handle money...

From a very young age, my parents taught me to live on budget. I was about five when they first set me up with an "envelope system." (For those who don't know, an "envelope system" is a cash-based budget where money is divided between a series of envelopes, each for different categories.)

My budget was very simple--three envelopes: one for giving, one for saving, one for spending--yet it began to teach me how a budget works and how to discipline myself within its boundaries.

As I grew older, I eased into a slightly more complex envelope system (it had a few more than three envelopes :-) ), but I was prepared for it. My early experience had given me the basic knowledge of how to manage a budget.