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Budget 101

When families are forced to spend less, children can help with the belt-tightening, said Helen Roberts, associate director of the Center for Economic Education at the University of Illinois at Chicago.

“If you’re worried about money and spending and you think your kids aren’t going to pick up on that worry, then you’re not giving them enough credit,” Roberts said.

Here are some tips for exploring the topic with children and young adults of every age:

3-6 years old: Most kids grasp the principles of budgeting (if there are three toys and four people, one person will not get one). Parents can begin to explore the idea of saving by reading children’s books on the topic. Roberts suggests Judith Viorst’s “Alexander, Who Used to Be Rich Last Sunday.”

7-11 years old: Begin using real-life situations to talk about conserving costs. If a family invests in a bicycle, for instance, it could become a benchmark for future cost decisions. A back-to-school wardrobe might cost as much as one bicycle, so parents could ask which is most important. Some families may include kids this age in budget talks to demonstrate how financial decisions are made.

12-15 years old: Consider letting young teens make financial decisions. Give them an allowance to spend on back-to-school clothes. They could buy one top-of-the-line outfit or three less costly items. The trade-off demonstrates a basic tenet of financial literacy, Roberts said.

16-20 years old: Many parents ask teens to cover the costs of lunches, gas and evenings out. Some are allotted money and others must work for it. Such responsibilities are appropriate, Roberts said. Parents may want to give teens an incentive to save. Whatever they don’t spend at the movies, for instance, they use to buy an iPod.