Budgeting and Envelope System: Even a 5 Year Old Can Do It

Itʻs been about four weeks since we introduced a chore and allowance program with our 5 year old son. Today, we went through his bank and counted his earnings. He had a few financial blessings this month that helped him get ahead. But just as in adult life, once in awhile we get thrown a blessing of a little extra money. He received $20 from his Aunty who was visiting from the mainland and hasnʻt seen him since he was an infant, he received $5 from the tooth fairy for his first tooth, and he received a $3 allowance bonus from his grandma for helping her wash her car. However, he missed out on receiving allowance while Sam and I were on our trip, but I think his bonuses made up for those missed earnings.

His total earnings were $37.75. He had set his goal of saving $26.00 to be able to purchase his Ninjago Game that he had seen in the store. But before he could use any of the money for something he WANTED. He had to put aside $3.00 (10%) to give away to charity. When I asked who he wanted to give the money to, he automatically said "Church." So tomorrow when we go to church, I will help him fill out a tithing envelope so he can give to the church. He also had to put aside $7.00 (20%) into his bank savings account. Which left him with $27.75, so he now has enough to buy his Ninjago Game. The extra $1.75 was left in his piggy bank so that he has a little head start on his next month of earnings.

I follow an envelope system when it comes to budgeting my money, so weʻre starting him early with the envelope concept too. He has three envelopes which he labeled "Hoʻolilo" (Spend), "Makauliʻi" (Saving), "Haʻawi Wale"(Donation). He put the respective amounts in each envelope and this weekend we will take a visit to Toys R Us so he can get his Ninjago game, The Credit Union so he can make a deposit, and to Church so he can tithe.

Iʻll keep you posted on his next Savings Goal and how his trip to the Toy Store, Bank, and Church went.