How to Budget a Teen's Clothing, Activities & Expenses

Giving your teen a budget can teach responsibility.

As your child matures into a teenager, the lessons you teach him will focus on preparing him for adulthood. Teaching the teen about ethical values and relationship coping skills are important, but you must also teach him how to handle money. You can begin preparing your teen for his financial future by establishing a budget for teen's clothing, activities and miscellaneous expenses.

Instructions

1. Determine your teen's monthly income by calculating the sum of his allowance, if he gets one, and any income earned from working. Be sure to subtract the 10 percent he should be depositing into his savings since this amount won't be used to pay for monthly expenses.

2. Help your child understand his cost of living by determining a list of monthly expenses. Include the cost of new clothing purchases, entertainment expenses and transportation costs, including car payments, gas and insurance. Anticipate miscellaneous expenses that fluctuate per month, including prom and homecoming dance expenses and extra-curricular school activity fees.

3. Subtract your teen's expenses from his total monthly income. If his expenses exceed his income, determine what costs can be trimmed from the budget.

4. Help your teen stay within his monthly budgeted amount by placing cash for individual expenses in labeled envelopes. Label one envelope for gas costs and place the cash allotted for that expense in the envelope. Do the same for each type of monthly expense.

5. Give your child his monthly allowance on a prepaid debit card that you can reload each month. Just like the envelope system, a debit card limits your teen's ability to exceed his budget. Debit cards can help your child develop the responsibility of using a credit card since the teen must keep track of the debit card and pin number.

Tips & Warnings

• Have monthly money meetings with your teen.

• Help your child find side jobs and extra sources of income.

• Set up a bank account for your child and deposit 10 percent of his monthly income in his savings account.

References

• Money and Stuff: Sample Monthly Budget for Teens
• Beyond Paycheck to Paycheck: 12 Things Every Teenager Needs To Know About Money (And How To Teach Them)
• School Family: Help Your Teen Budget Time, Money This Summer
• Wall Street Journal: "Debit Cards Can Help Teens Budget", Jonathan Burton
• Agora Financial: Getting your Kids Involved in Developing a Budget