Show your kids how to use a money journal to teach them budgeting and saving
Where does your money go? Most adults couldn’t answer this question, let alone their kids. Teaching your kids how to use a money journal to track their income and expenses is the first step in making them more responsible with their personal finances.
Today’s essay is by Mikyong Kim, a student at the University of Arizona. She shares how her mother taught her how to start a money journal and manage her finances.
Check out Mikyong’s story and please share on social media. The most-shared essay on how parents can teach their kids about money will win our $500 personal finance scholarship, announced August 31st!
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Managing Money Habits for Life
There is a famous Korean proverb that my mom used to regularly tell me when I was a little girl and it goes like this “habits from when you’re 3 last until you are 80”. In other words, old habits die hard and that is something my mom has taught me about managing money all my life.
Starting from when I was old enough to understand the concept and value of money, my mom has instilled good spending and saving habits in me. She emphasized tracking spending habits, always saving 30% of my money, and staying within the budget.
Using a Money Journal for Budgeting and Saving
From my first biweekly allowance in the second grade to now, a senior in college, I still keep a money journal. I still remember my mom teaching me how to fill out my money journal which includes the date, how much money was spent, where I used the money, and what it was spent on to make sure I don’t spend more than I have.
Since I was a clumsy and disorganized elementary kid, she used to check my journal every month to see if I was keeping up with recording my expenses and completing it correctly until she knew I was responsible enough to manage my own finances.
Along with the money journal, I was taught to always save 30% of my money every time I got paid. When I was in elementary school, I got 5 dollars every two weeks for cleaning my room and setting the table and every two weeks I had to put $1.50 in my piggy bank. The $1.50 every two weeks for the rest of my years in elementary school, $6 every two weeks in middle school, $12 every two weeks in high school from my allowance, plus the 30% I saved from every paycheck I received from work during senior year of high school put in my savings has helped pay for some of my books and other expenses in college.
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When I was little I didn’t understand why I had to save, I only did it because I was told to do so, but now I know why it is so important to save. If it wasn’t for my savings, I would have a harder time affording college Since college is costly and saving is more difficult, I don’t save quite as much, but I still try to save at least 20-30 % of my paycheck to save up to apply to graduate school and pay for utilities.
Keeping a money journal and having money set aside for savings is the key to staying within the budget. The money journal shows exactly how much money I can spend and it helps me keep a record of my expenses and categorizes my spending.
I am grateful to have been taught about budgeting and saving early on in life because I have excellent budgeting and saving skills now. I am responsible and more than capable of managing my finances and I give all of the honor and glory to my mom. I understand why my mom used to always tell me the Korean proverb because she is right, old habits die hard and it is important to start good habits early. If it wasn’t for her, I would probably be careless about my spending and could have possibly ended up in debt.
I want to thank Mikyong for her essay on how to use a money journal to handle personal finances. Be sure to support Mikyong by sharing the article through social media and check in August for the winner of the personal finance scholarship.
About the Author
Joseph Hogue is a financial expert and investment analyst. After serving in the Marine Corps, he started his career investing in real estate before becoming an investment analyst for some of the largest private investors. He's appeared on Bloomberg and on CNBC as an investment expert and has published ten books in personal finance. Now he helps investors reach their financial goals and invest in the stock market with some of the same advice he used when working for the rich.