Financial Literacy: Budgeting: Transforming the “B” Word! Part 2 of 3

Budgeting…what are your associations to the term? Even as adults with years of experience in managing our money, ‘budgeting’ often triggers feelings ranging from boredom to anxiety and dread. As a child or teen, planning for and then tracking the elusive numbers can feel absolutely overwhelming–no wonder we often meet resistance when money management is on the table!

For many young people, budgeting conjures two experiences: confusion and loss. Planning for future needs, some known and some not, feels complicated and puzzling. Allocating money for certain things means missing out on others–it means coming face to face with not getting everything one wants. And so the struggle continues: as adults, we want the girls in our lives to be prepared for self-sufficiency; as a child or teen few tasks seem less desirable than making sense of money.

Last month’s article on financial literacy explored the importance of attitude; fostering a spirit of creativity and resourcefulness. In this issue we’ll go one “attitude” step further: Budgeting may be boring, but goal-setting is empowering! Determining personal priorities and then choosing the dollar amount to put toward each is powerful, not limiting. Joline Godfrey, President & CEO of Independent Means, Inc. writes, “For girls, the work really is getting them to understand that money is a vehicle for social change, individual security, personal options, and fun.”

How can we help girls cultivate a sense of personal money power? How does goal-setting work practically to develop budgeting skills? Read on for practical suggestions designed to motivate and equip girls for financial competence.

Goal-setting can begin as early as the first time your daughter has a choice about where to spend her money. Begin with two simple questions: “What do you want to buy soon that you already have enough money for?” and “What do you want to buy that will take some saving to purchase?” In effect, you’ve asked your daughter to set both a short term and a long term goal. Balancing short and long term goals means that there is always a smaller, immediate source of pleasure, as well as a larger project in the works. Deprivation can be derailing; short-term goals help sustain long-term planning.

Part of choosing a long-term goal is calculating how long it will take to reach the goal based on your daughter’s current income. She may need your help to accurately accomplish this step. Once she knows what length of time is involved, she can either decide to go for it, or choose a less expensive goal.

“For girls, the work really is getting them to understand that money is a vehicle for social change, individual security, personal options, and fun.” –Joline Godfrey

If your daughter wants to exceed her budget while shopping, gently remind her of her own goals. Spending money that was allocated elsewhere means not being able to purchase the original item–this is a truth we all have to live with. Ultimately, however, it is each person’s choice whether or not to stick with a long-term plan. Personal money power means making that choice with awareness about how it will impact goals.

As your daughter grows, you may together decide to use birthdays to develop money sense. Give your daughter a dollar amount that you are willing to spend on presents, and have her prioritize which items on her wish list are most important within that budget.

Goal-setting is the opposite of deprivation–it is conscious planning in order to get what one really wants. At your daughter’s age, the planning does not usually need to be complex–it’s as simple as taking on one long-term goal at a time, while making sure there is enough allocated for small pleasures along the way.

Next month’s financial literacy article will spotlight ways that girls can use financial literacy to make a difference–in the community and around the world!


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