Have you ever wanted something that your parents wouldn't buy for you and that you didn't have the money to buy yourself? Say, a new bike, concert or ball game tickets, or a CD player? Or have you imagined owning a car or a computer? Having a savings plan and a budget can help you save for both short-term financial goals (like buying a computer) and long-term financial goals (like saving for college).

Some people think of budgets as denying themselves stuff they want - sort of like a diet. But the opposite is actually true. Sticking to a budget means you waste less money on little things you hardly notice, like gum or soda, and save more for the bigger, important items you really want.

Creating a budget
The first thing you need to do is think about how you earn money. Kids usually get money, also called an income, from allowances, part-time jobs, or gifts. Start by writing down the sources of your income - the amount you receive and how often you receive it. For example: allowance $7 a week. The CYIF Allowance Calculator can help you track your sources of income.

Next, do you and your parents like to donate money to organizations that help other people or animals? Think about taking a portion of your income, for example 10 percent, and keeping it in a special place, like a giving jar. After you've collected money for six months or a year, you can donate it to a charity or a cause you believe in. (Our article "Sharing Your Money with Others" provides more information on giving to charities.)

Then separate your remaining income into savings and spending money. Many experts recommend dividing your income into thirds:

• One third can be used for spending now on small items

• One third is for short-term saving, for items that you can't afford to pay for all at once, like a new bike or a computer game

• One third is for long-term saving, for things like attending college, buying a car or maybe even starting a business

Discuss your savings plan with your parents. They may be able to give you advice and suggestions. With a savings plan, a budget and a healthy dose of patience, you'd be surprised at how quickly your buying power can grow.

Stories of two savings plans
Mike is eight and saving for a Playstation®. Camille is about to enter high school and wants to buy a computer. Read how Mike and Camille worked toward their financial goals with a budget.