How to Budget for Teens
Teaching teens to budget is an important life lesson. It teaches them to value the money they earn and to carefully consider any purchase they make and shows them the cost of borrowing money. But unless you sit and make an initial budget for your teens, these are lessons they seldom learn on their own. Unlike going to the movies or shopping, creating a budget for teens can be painful and may not be an activity they enjoy doing, as most teens are uninterested in saving money. To make budgeting seem more appealing, explain the reasons for it and offer some reward when they stick to their budgeting goal.
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Instructions
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Add up all of your teen's income, including money from part-time jobs, household chores, allowance, baby sitting, mowing lawns or cash gifts. Download a budget template from the Microsoft Office template website and type in the income amounts.
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Make a list of your teen's weekly and monthly needs. Include clothing, entertainment and school activity expenditures. Add car expenses, too, if your teen drives. Enter these amounts under the expenses section of the template.
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Review the service bills that apply to services your teen uses. This includes car insurance, cellular service plans and any other service you contract especially for his needs. Go over the due dates for these bills and enter them in the budget form.
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Eliminate or reduce unnecessary entertainment, driving and service expenditures where possible. For instance, if you pay a data plan on your teen's cellphone plan, remove this and instead choose a basic plan.
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Discuss and determine a weekly allowance amount your teen should receive. This amount should help cover his basic monthly expenses and only supplement his work income. If, however, your teen earns enough from part-time work, then an allowance is unnecessary. Your teen needs to use his income to cover all of his monthly expenses, including contracted services, clothing, school lunch, activity fees and entertainment. Avoid purchasing items for him with other money.
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Open a savings account for your teen and decide on a set amount to save each week. Ensure he understands that he must deposit this amount every week. Discuss the purpose of the savings. Decide on whether it is a long-term savings for college or a savings account for a special item. Allow your teen some decision-making power in this discussion, as it will keep him interested in sticking to the budget.
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Show your teen the risks of borrowing money by allowing him to borrow small amounts from you. Ensure that these amounts have an interest attached to them, so your teen quickly learns the true price of a loan.
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Make weekly reviews of your teen's budgeting and record-keeping abilities. Offer an inexpensive reward to teens who meet their weekly budgeting objective. These can be in the form of a movie or game rental, dinner out or a small gift like a book, additional money for a savings account or similar reward.
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References
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