How to Make a Budget for a Teenager

Develop budgeting skills early.

Creating and living on a budget isn't only for adults. Many teenagers have part-time jobs and expenses that justify learning how to budget money. Poor money management and budgeting can contribute to financial problems. If a teenager doesn't budget his money, he may spend frivolously and have little funds to pay his bills or build savings.

Instructions

1. Record how much you earn a month, such as an allowance or income from a part-time job. Staying on budget and avoiding overspending involves knowing exactly how much you earn each month.

2. Make a list of your expenses. For example, you may pay your own cellular phone bill or have automotive expenses, such as fuel and car insurance. Record these expenses, and any others, on a spreadsheet. If you're a college student living on your own, you may have rent and household utilities.

3. Add up your monthly expenses and subtract the total from your monthly income. This number reveals your disposable income after paying your recurring expenses.

4. Go to a local bank branch and open a savings account. Depending on the bank, you may need a parent present if under the age of 18. Take 10 percent of your monthly income and deposit this amount into savings. A cash reserve comes in handy if you need a car repair or face another financial emergency

5. Review disposable income to determine how much you'll spend on extras. Don't spend recklessly and waste money on nonessentials. Resolve to spend no more than 25 percent of your income on extras. For example, if you earn $600 a month, shopping, dining out and recreation should amount to no more than $150.

6. Evaluate spending throughout the month. Hold onto your receipts and regularly review your checking account balance (if applicable) to ensure that you stay on track and to avoid exceeding your budget.

Tips & Warnings

• If your present income isn't enough to pay expenses and save money, think of ways to make extra cash. Agree to take on additional chores around the house and ask for a larger allowance, or ask your employer for additional work hours.

References

• Oprah's Debt Diet: Spending Plan Pie Chart
• Family Education: 5 Steps to Teach Your Teen To Budget