Budgeting Tips for Teens

by Shannon

Money Diary

First, your teen should spend 1-2 months keeping a money diary – writing down every purchase, even the smallest expense. With their expenses down on paper, they can see where their money is going, and what spending habits need to change. Record-keeping must be as specific as possible.

After Tracking

After keeping their money diary, help your teen make a list of potential cutbacks – areas where they can get by with spending less. Help them make adjustments each month as they discover what works, and what doesn't.

Addressing Shortfalls

To help address budget shortfalls, suggest ways your teen can earn more money, or cut back on expenses, such as renting a DVD to watch with friends rather than going to the movies; or maybe car pooling through the week to save on gas for the weekend.

Make a Wish List

After devising a budget, your teen should create a "Wish List" of things they'd like, or need, but can't afford right now. A lot of teens can achieve their Wish List once they stick to a budget. Help them make it a goal to purchase at least one Wish List item.

Control Impulse Buying

Encourage your teen to think through spending decisions, rather than impulsively buying items right away. Show your teen how comparing prices or waiting for an item to go on sale can save money.

Needs vs. Wants

Show your teen how to modify a budget by categorizing expenses as needs (expenses that are unavoidable) and wants (expenses that could be cut if necessary).

Some Rapid-Fire, Quick Tips.

Advise your teen to do the following in order to achieve a healthy balance between money in & money out:

  • Resist impulse buys.
  • Don't go shopping with friends who spend a lot.
  • Tote their lunch to school (or work) as much as possible.
  • Stay away from vending machines and convenience stores.
  • Only visit an ATM once a week (plan ahead for needed cash).
  • Entertain at home.
Teaching your teen how to budget