How to Budget for a Teen's Expenses
As children grow older, they need to learn how to budget money and keep their spending under control. Developing these skills while the children are still living at home helps teens have time to practice under their parents' supervision. Parents should sit down with their teens and help them work out a balanced budget that accounts for all of the teen's expenses. If teens exceed their budgets, parents should stay firm and not bail the teens out by giving them extra money.
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Instructions
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Determine as a family what expenses the parents will pay for. For example, this could include the teen's room and board, sports equipment, school supplies, medical costs and car insurance. The teen is responsible for paying everything else.
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List what the teen spends money on. These could include clothes, accessories, books, music, movies, food outside the home, going to events, gifts for friends and family members, a cellphone bill and transportation costs, whether they are for a car or public transportation. Also include a category for charitable giving and one for savings.
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List all sources of income for the teen. Teens get money from a job, savings account interest and allowance. List only the amount of take-home pay, not the amount before taxes.
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Add the income earned from all sources during the month to calculate the teen's monthly money.
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Prioritize the list of spending categories. Put needs at the top and wants below. For example, you might decide that for needs, savings is most important. The teen might also add transportation and cellphone to the list of needs. The teen can decide how to prioritize the rest of the items, which are wants.
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Estimate how much the teen spends per month in each category in the needs section.
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Add the needs and subtract them from the monthly income. The remaining number is the amount of money the teen can spend on wants.
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Allocate the remaining money toward the categories in the wants section. Add everything to ensure that the allocated money is not more than the teen's income. If it is, subtract money from some of the categories until the budget is balanced.
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