If you have teenage children you may be aware that budgeting ranks below friends, sports, video games, movies, music, and about 100 other things on their list of priorities. Any money that is given to them is spent almost as quickly as they asked for it. However, before this turns into a rant about today’s youth; let’s stop and take a breath. After all, budgeting is a skill just like driving a vehicle, playing a sport, or cooking a meal. You can’t hand a teenager, a skillet and some ingredients expecting to get a 5-star meal in the same sense you can’t hand them a $20 bill and expect Warren Buffett quality investing. Budgeting is a skill that requires a lot of teaching and practice. Unfortunately, schools often do not teach budgeting to students and, instead, leave the job up to parents. Luckily, there is a simple and effective solution to teaching the art of budgeting: gift cards.
Gift cards offer a perfect mix of flexibility and control for parents that want to help teach their teenagers about budgeting. Teaching this important skill is so much more than simply being able to trust that your child will use gas money for gas rather than pizza. Budgeting is something that only becomes more and more important throughout life. In fact, some studies suggest that over 70% of college and university students list money problems as their number one cause of stress. That’s above studying, upcoming exams, relationships, and every other aspect of life for people in their late teens and early 20’s. Taking the time to teach budgeting by using gift cards as a tool could have a positive, life-long effect on your child.
Sit Down and Create a Budget
The very first step in teaching about budgeting is to sit down with your teenager and build a budget. This should be a collaborative process that allows everyone to provide input. Bringing your teenager into the process of building the initial budget also gives them a feeling of ownership over the final budget.
When people feel like they have ownership over their budget, they are far more likely to take it seriously and follow the budget. Plus, building the budget is one of the most important steps in this process. If your teenager learns to stick to a budget but never learns how to build a budget then only half of this important skill has actually been learned.
While working on building the budget, there are several factors to consider including hobbies, necessary expenses, income, and saving. One way of assigning importance to each aspect of the budget would be to rank them. For example, if your teenager needs a vehicle to get to their sports practices, workplace, or school then fuel may be ranked as number 1 on the budget priority list. Another way of looking at things is to create a “needs and wants” list. Using this strategy, things like fuel and groceries may go under the “needs” list while other items like entertainment and dining out go under the “wants” list.
The next step would be to determine how much money is needed for each item. This could be on a weekly, bi-weekly, or monthly basis. Ask questions like how much a tank of gas will cost and how long it will last. If the final tally of the budget is creeping too high then money may need to be moved from “wants” or lower ranked categories to help cover “needs” or higher ranked categories. If appropriate, use examples from your own life to help explain the importance of building a budget.
Buy Gift Cards for Budget Items
Once the budget is created it’s time to fund the budget. Buy gift cards for relevant stores that can pay for each budget item. A gift card to a nearby gas station can cover the fuel category while a gift card to a movie theatre could cover the entertainment category. These gift cards should be loaded with the exact values that were determined in the budget building process. This part of the budgeting process is incredibly important because it takes the abstract idea of a budget created on paper and turns it into a tangible part of your teenager’s life. Simply saying, “You have $40 to spend on gas,” is a lot different than holding a gift card with $40 loaded onto it.
When buying gift cards to fund the budget, you will want to consider looking at reloadable cards for convenience. This is especially true if you have worked with your teenager to create a weekly or bi-weekly budget. Reloading a gift card online or at a retail location is much easier and far less time consuming than buying and activating new cards every single week. The convenience of the location where the gift card can be redeemed is also very important. Choose places that are close to home or along your teenager’s regular route when buying gift cards. The easier it is to adhere to the budget, the greater the chance of success.
Offer an Incentive
When you create a personal budget, there is an incentive to stick to that budget. At the end of the month there may be additional money to pay down debt or save for a major purchase like a vacation. Teenagers also need incentives to stick to their budget. The type of incentive will depend a lot on what gets your child excited. If the incentive isn’t exciting enough, then there may as well be no incentive at all. Just like in the budget building process, you should ask your teenager for input about an incentive. Again, allow them to have ownership over the process and you will increase the chances of success.
One idea for an incentive could be a “leftover money” strategy. At the end of every budget period, whatever money is left on the cards could be added to a prepaid Visa or Mastercard for your teenager to use as they want. To make this incentive even more exciting, you could offer to match the leftover money, essentially doubling their reward. This type of incentive will get your child thinking about new, creative ways they can save money on their budget. Perhaps they choose to walk a few times per week instead of driving their car every single day.
Another incentive could be a set reward. Come to an agreement with your teenager about what they would like if they are able to stick to their budget. This could include a reward like an Amazon gift card that allows them to purchase an item they want. If your child has a big-ticket item in mind, like a new smartphone, then the value of that item could be split into several milestones. For example, if the cost of the item is $600 then the reward could be $100 for every month that the budget is successfully followed. This makes teenagers think long term and work toward a goal that’s outside of the immediate future. It’s the same concept that adults use as we follow our own budget to save for things like new vehicles.
Of course, there is always the option to sell gift cards at the end of the budget process. This is for the teenager that knows cash is king. Help them use a website like EJ Gift Cards to turn their leftover gift card balance into cash.
Participate in the Process
Sometimes teenagers are unable to connect the lesson you’re teaching, to real life. The best way to overcome this obstacle is to participate in the budgeting process yourself. If appropriate to your family situation, it may be incredibly helpful to share how you help build a household budget for the family. Just like with your child, you should set goals and incentives for yourself to help stay accountable.
If your teenager can see the real-world value of building and sticking to a budget, they may take their own budget more seriously. It will also give them an opportunity to see what must be budgeted and accounted for as they get older.
Troubleshooting the Budget
The gift card budget may not be a success from day 1. In fact, it should be expected that there will be speed bumps and challenges along the way. Use these moments as teaching opportunities. Be sure to stay calm when assessing the problems that may have come up. Keep the original budget on hand and work with your child to reassess and find ways to move money around to make the budget work. Again, if appropriate, share your own successes and failures with budgeting. No one is perfect and this is ultimately a learning process. Remember: a $10 mistake on a gift card budget at age 15 is a much easier lesson than a $500 mistake on a budget at age 25.
It may also be helpful to monitor the gift card balances throughout the budget period. This can often be done through an app or website to make it convenient. If you’re able to stay aware of how the gift card is being used then you can step in if the budget is going off-track. Again, be sure to stay calm and explain to your child that their incentive may not be achievable if they continue to spend at this rate.
Some teenagers may not respond well to this type of budgeting exercise. It’s possible that your child could simply sell gift cards assigned to the budget in return for cash. You know your own children best and if the gift card budget is not working, then don’t feel the need to force it.
There are plenty of other ways to teach the importance of budgeting. Some communities also have programs for teenagers and young adults that help train them on important life skills like budgeting, resume building, and more. No two children are the same and you may need to consider other solutions if needed.
A Lesson for Life
Budgeting is one of the most important skills that you can teach to your teenager. Spending time on the importance of budgeting with your child now can help to reduce stress and confusion later in life. Money problems will always be present throughout life but budgeting can help make money problems seem much more manageable.
This type of budgeting exercise is a fantastic way to connect with your children and make them feel like an adult. After all, it is only a matter of time until they actually are an adult. Talk to them frankly about the importance of budgeting but also make the exercise fun and rewarding through the use of incentives. Plus, it’s also possible you learn something about budgeting along the way as well. They always say kids are the best teachers…
Of course, if there are unused gift cards at the end of the process, there is always the option to sell gift cards through EJ Gift Cards. We buy gift cards from hundreds of different retailers, restaurants, and e-commerce stores. Best of all, the money earned from selling those gift cards is paid straight to your PayPal account.
If you want to sell gift cards, the process is easy. Log in and then enter the details of your gift cards. An offer will be provided for you to review. There’s no obligation or cost to find out how much your gift cards are worth. You can take the money or hold on to your gift cards and use them yourself.
Whether you’re teaching an important lesson about budgeting or simply cleaning some unused gift cards out of the drawers in your home, EJ Gift Cards is here. There are hundreds of gift cards that we accept in exchange for cash. Once again, there’s no obligation or fees to find out what your gift cards are worth. With no risk, why not find out how much money you could make?