The Advanced Budget Tool

What it is

The Weekly Allowance window is really just a very simple version of the Advanced Budget. You're allocating certain amounts to accounts, and your child learns to make choices on how/when to spend that money.

The Advanced Budget gives you more advanced tools. It makes it easier to figure out what spending you're already doing that you'd like to shift into your child's hands. The total budget - the sum of all the expense items - will become your child's allowance.

Remember, this is not about new spending (or at least, it doesn't have to be) - it's about empowering your child so she can learn about:

• making choices
• managing money
• appreciating things
• sharing
• saving

....and to make this part of everyday life so the lessons are constantly reinforced as she learns and grows.

The Budget page

The budget contains a list of Expense Categories, each containing Expense Items. You'll see what looks like a spreadsheet - a list of months with $ for each item for every month.

It may look like there's a lot to calculate, but there really isn't - the system does all the heavy lifting.

Expense Categories

Each Budget has groupings called Expense Categories.

Each Expense Category has a companion Bank Account (you see these on your HOME page).

These Category groupings are important - they enable you to retain some control over how money is spent (eg clothing allowance can only be spent on clothing, not movies). And since you do have this control, you can feel more comfortable about GIVING allowance for certain things (like clothing).

Each week, when you enter the points your child achieved on the Checklist, the system allocates money to each account in accordance with the amounts in the Expense Categories.

Budget amounts can vary dramatically, not only between families but also between children.

Expense Items

In each Category, you plug in Expense items. These items are a handy way of figuring out which items you're prepared to fund and what they cost.

When it comes time to spend money, your child might choose to spend differently than what's in this budget. That's OK - that's all part of the learning and empowerment!

Linkage with Allowance Window

• You'll see Expense Categories with the names you saw in the Allowance Window. The Allowance Window and the Advanced Budget are tightly linked.

• If you do use the Advanced Budget, any categories you add/delete/change will also show up as changed when you look at the Standard Allowance Window.

• Similarly, any future changes you make via the Allowance Window will show up in the Advanced Budget.

Miscellaneous Items

• Anything you entered via the Standard Allowance window will show on the Advanced Budget as "Miscellaneous". If you didn't enter anything in th Allowance Window, you'll just see a bunch of $0.00 entries.

• If you change an amount in the Allowance window, the system will either create a "Miscellaneous" item in the Advanced Budget or modify it if there's already one there.

Linkage with Bank Accounts

The Expense Categories will appear under matching names in the bank accounts on your Home page and in your child's portal, so he/she can track how savings are accumulating.

If you change the name of an Expense Category, the new name will also show in the Bank window.

If you delete an Expense Category, it will also disappear from your Bank Window (only if that account has no money in it).

The Tools

You can Move Up/Down, Edit or Delete categories or items with the buttons at the left.

Entering and editing amounts

Choose an item and click the Edit button. A line with entry boxes will open up.

You can change the item description, enter amounts, and plug in some notes to remind yourself what you were thinking when you revisit this in the future.

Time-savers

There are several time-saving ways to enter an item, so you don't need spend time doing the calculations:
    •    Weekly (eg. a weekly treat)
    •    Monthly (eg. one movie per month)
    •    % of total allowance (eg. charity or university savings)
    •    Specified month (e.g. Birthday presents). In this case, you would enter the amount in a box that will be displayed for that month

The system calculations

The system will compute the weekly amount and display totals for each month.

Note that the number of days in a month is taken into account, making $5.00/week worth $22.14 in a month with 31 days!

Total Allowance

At the bottom of the page, you'll see a running total. On the far right, you'll see the calculated weekly allowance, based on adding up all the items in all the Expense Categories.

The Top Controls

Here's where you can:
• Change the name of the Budget
• Select or create a new budget
• Change the Budget period

Setting the Budget Period

The default setting is one year.

If you'd like to change the dates, use the menu at the top of each child's budget page. Click on the calendar icon beside each entry box to select a date.

Budget Period - effect on Lumpy Items

You have the option of entering Expense Item amounts as "specified months" (see above). That's a useful tool for items like Birthday gifts or perhaps clothes. However, these "lumpy" items have one watch-out to keep in mind.

The system divides the "lumpy" items by the number of budget weeks to calculate the weekly allowance.

If you change the Budget period to, say, 12 weeks, then the "lumpy" item will become a bigger part of the allowance.

For example, your child would need to have $4.17 weekly for 12 weeks to be able to pay for $50 in gifts. By comparison, if he had 52 weeks to earn it, it would only contributre 96¢ to his allowance.

The default period is 52 weeks.

The "Active" Budget

The Budget that's being used in the allowance calculations is the one you see in the drop-down menu.

You might choose to create new budgets in the future instead of modifying the current one, especially if you have many "lumpy" items. You can see a list of those budgets in the drop-down menu. Any other budgets you've created for that child are there for reference but have no impact on Allowance calculations unless you select it in the drop-down and make it the "Active" Budget

In our family, we create a new budget each year. It's actually fun and interesting to look back on earlier budgets with the children, mostly as a way of showing them how it's changed and grown over the years as they've matured.