Why Your Kids Need a Budget & The Best Tips for Getting Started

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May 27, 2021
by Chelsea

Why You've Got to Listen to This Episode...

Today I’m talking with the author and founder of You Need a Budget, Jesse Mecham. You might be surprised to know that the YNAB app started with a simple spreadsheet he created so he and his wife could generate an extra $300 a month. Now Jesse and his wife are busy discovering how to teach their seven children about why they need a budget.

We’re talking about why budgets are ever-changing, how to engage your kids’ different money personalities, and why you don’t have to be a money expert to teach your kids about budgeting.

Moments You Don't Want to Miss

[8:54] Learn where people most often overcomplicate their budgets
[11:09] Here are some tips for helping a reluctant partner understand why you need a budget
[25:24] Wondering how you can discourage kids from buying things you don’t want them to buy? Check out these tips!
[27:16] Check out the four YNAB rules and why they are easy enough for kids to understand
[31:00] Hear about the many different versions of budgeting systems Jesse and Julie have tried in their home
[42:35] This is how Jesse is thinking about raising kids who will likely find partners as adults who aren't as financially savvy as his kids will be
[47:13] Chelsea’s Top Takeaways

What Are Your Family Money Values?

Grab our free Family Money Values Template and create a strong foundation for your family’s healthy money habits!

Key Takeaways to Help You Understand Why Your Kids Need a Budget

As always, we’ve rounded up our top three takeaways to summarize what we believe are the core points to remember from Jesse.

1 - Budgeting is An Ongoing Process

First, a budget is not something we set once and if we have to adjust it, we failed at budgeting. Budgeting is a process of continually making the decision of what our money can do best for us in that moment. That might mean that our priorities change over time, and they likely will. That just means continually revisiting the idea of what you need your money to do and what your family’s goals and values are.

The only way you can fail at budgeting is if you stop doing it, you stop interacting, or you’re trying apply somebody else’s rules to your budget. You make the calls for what’s best for your family, and you always have the freedom to switch up the game plan at half time.

2 - You Don't Need to Have All the Answers

Next, when it comes to teaching our kids about money or really anything, we’re never going to have all the answers. We’re still learning, and we’re still uncovering things about how we manage money as adults. I loved hearing about how Jesse approached the idea of paying for college with his kids. He brought it to his kids and asked them what they thought they should do. It doesn’t mean he has to take their advice.

The point is that the conversation showed his kids to have a growth mindset and how to think about continually asking questions. If we don’t have all the right answers we’re showing our kids that we’re learning right alongside with them. That gives our kids the permission to fail and permission to keep learning.

3 - Your Goal is for Your Kids to Become Peers in Your Family's Money Journey

Lastly, if your kid is between the ages of six and eight, you don’t need to get down and dirty with them on exactly how much money you make, what your investments are, and how your asset allocation is split up. That’s not age appropriate or helpful.

But the goal is that once they become an adult, you can have conversations about how you’re building family wealth. You can talk to them about estate planning, investment choices, budget choices, and family values. That will require having a solid foundation in financial literacy that grows as they mature.

We talk here about generational wealth and leaving a legacy. We aim to give our kids the knowledge and confidence to enter into conversations with others confidently about money. That’s when you know whatever wealth or lessons you leave with them, they’re going to be able to take them and turn them into something even greater to pass down to the following generation.

By starting this conversation today, you are one step closer to making that dream a reality.

Links & Resources Mentioned

Connect with Jesse

Personal finance expert, speaker, and business leader, Jesse Mecham is the Founder of You Need A Budget (or YNAB if you are very busy and important). Jesse hosts the You Need A Budget podcast, and is the Wall Street Journal best-selling author of, You Need A Budget. (He’s nothing if not consistent!) A self-proclaimed “recovering CPA,” he is deeply passionate about teaching individuals, families, and business owners YNAB’s Four Rules to help them gain total control of their money.

Jesse first developed the YNAB method and original spreadsheet as a broke, newly married college student who really needed a budget. In an attempt to make an additional $300/month to cover rent, he sold his spreadsheet online and YNAB was born.

When not teaching people how to budget, Jesse loves gardening, woodworking, marksmanship, and travel. He also spends a good bit of time with his wife and the seven small people that live in their house. To learn more, visit www.youneedabudget.com.

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