Budgeting tips for teens
08th June, 2021
While your teenager is unlikely to have a full-time job or monthly bills to pay, learning how to save and spend responsibly is a life skill that takes practice. Below are five tips you can share with your teen to help get them started on the journey to financial independence.
1. Keep track of the money you receive
To see what you’ll be working with, start by figuring out what money is coming in. If your income is uncertain or irregular, make some estimates for what you think you can earn weekly, monthly or for the summer.
Download our Budget Worksheet to help keep track of how much money is coming in and what you’re spending it on.
2. Keep track of the money you spend
For a teenager, fixed regular expenses might include a monthly phone bill, petrol for getting around and car insurance if you have a car. All of these would be considered your “essentials” and should make up about half of the total money you receive in a typical month.
Check out the latest Cents for Kids newsletter for basics of budgeting for beginners, which gives rules of thumb for a balanced approach to saving and spending your money.
3. Have fun
Once you have the essentials covered, you can use the money left over for the fun stuff, such as going to the cinema, tickets to a match, a night out with friends or even a new bike.
While I don’t think happiness can actually be bought, I do think that if you spend money on the things you value, you’ll find that you’re happier and much more satisfied in a variety of ways when you’re spending money on things you truly value. For instance, would you rather spend on an experience you won’t enjoy, a new top you won’t wear, a new gadget that sits in a drawer or instead on the things you value, notice and care about?
For more on aligning your values with your money, check out Waste not, want not – the value of knowing your values, which includes the five principles to follow if you want to get more happiness from your money according to the authors of Happy Money: The new science of smarter spending.
4. Set SMART goals
Set yourself up for success by creating the right type of goal – good goals are SMART:
- Specific. A goal should be linked to a single activity, item or idea.
- Measurable. A goal should be something you can track and measure progress toward.
- Achievable. A goal should include a clear set of actions you can take to make progress toward your goal.
- Realistic. A goal should be within reach and possible to achieve.
- Timely. A goal should fall within a specific time period.
Once you set yourself a SMART goal, keep track of the money you receive and your progress towards your goal(s) using our Goal Tracker.
5. Keep it balanced
As a rule of thumb, spend less than you earn and if you find yourself overspending, there are two ways to boost your savings – either finds ways to earn more money or cut back on spending.
Get a summer job or ask your parents for help setting up a small business mowing lawns, walking dogs, or minding kids. You should also find out if there are extra jobs around the house that you could take on. Take inventory of your talents and the jobs that need doing using our Choosing the right job for you worksheet.
Download our Budget Review Worksheet to review how you’re earning your money, what you’re spending it on.
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