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I’ve always felt that it’s my responsibility to teach my kids about money. But recently, my 7-year-old daughter has given me valuable insight into the budgeting process.

She has started planning her birthday party, which is in June. Her first step was finding out how much money she had to spend. She looked at me with her big brown eyes, asking "How much money can you give me, daddy?" Off the top of my head, I blurted out, "100 dollars." That seemed like a lot to her and not that much to me, so we were both happy.

Then she went to work. She started on the guest list, which is much longer than I want. She wrote down names of family and friends and told me, "Dad, we’re not going to be able to feed everybody on $100." I told her that she had to whittle down her list. She has put that off for now and moved on to looking at decorations online. Now she’s researching water slides to rent …

The bottom line is that budgeting is hard. It’s full of difficult decisions that require thought and research. And it’s something that requires practice. After all, no matter how much you money you make, there is only so much to go around. You can’t have it all … that’s why it’s so crucial to have a plan and stick to it.

My daughter actually did a lot right in planning for her party. First, she figured out how much she had available, then began looking at what she wanted. Often, we start out with what we want, then hope we have enough to cover it.

Budgeting is a learned skill, something I hope my daughter will have by the time she’s an adult. For now, I’ll be happy to survive another birthday party.