How to Organize Finances as a Teen

You've finally earned a bit of financial freedom by getting your first part-time job. You thought that now you could buy what you want without having to get permission from your parents, but now they're constantly telling you to save your money. Fortunately, there's a balance that will make everyone happy, and with a little knowledge, you can organize your finances as a teen.

Instructions

Difficulty: Moderately Challenging

1. Know your net worth. One thing teens often overlook is the tax money that will be coming out of their paychecks. After a few weeks on the job establishing a schedule, you'll have a better idea of what you can expect to take home regularly.
2. Talk to your parents. Now that you're bringing home your own money, your parents may expect you to start paying for certain things such as birthday gifts for your family and friends or nights out at the movies. Ask your parents to sit down with you one evening to help you organize your finances and explain their expectations.
3. Write it all down. Now's the time to make a list consisting of two columns-- needs and wants-- and organize accordingly. On the needs side, include those items your parents expect you to pay for, and then go to the fun side and jot down the things you want to buy.
4. Open a savings account. Get your parents to go with you to their bank, and open your own savings account into which you should put a set amount weekly. This will get you into the habit of long-term saving for your future or big-ticket items.
5. Start your own checking account. With the money that's considered your spending funds-- that is, the money that's not allocated for your needs or your savings account-- consider opening a checking account. You'll learn how to manage and balance a checking account and be less tempted to spend your money if you don't have the cash in your pocket.

Tips & Warnings

• Allow for some flexibility in your finances as new needs and wants arise.
• When organizing your finances, don't forget to include income from allowances or gift money.
• It's important that, even as a teen, you learn to pay off any debts before you spend any of your money.