Budgeting Ideas for Teens

Budgeting Ideas for Teens

Budgeting is a skill that isn’t often taught in high school. Teenagers learn it through real life, either from role models, or by making budgeting mistakes. It is a skill they can use and benefit from everyday. It can start anytime, with their allowance, or at the latest when they get their first job.

Know Your Income

There is only one way for teenagers to know their income. To work part-time or to help around the house and get paid for it. When they start earning, they learn what earnings, savings, and expenses are. Sometimes their earnings may vary from month to month and then they learn how to manage their earnings.

Create Budget Categories

To better understand what a budget means, but also budget categories, it is best to talk to your parents so that they can give you advice.

The next step is to create budget categories, and the two main categories are saving (income) and spending (expenses).

Example types of savings:

  • General savings account / emergency fund
  • Short-term and long-term purchases (eg car or laptop)
  • Retirement savings.

Within spending, there are two main types - required spending and discretionary spending:

Required expenses:

  • Groceries
  • Rent
  • Cell Phone / Internet bill
  • Money for gas / Transportation
  • Auto insurance (very expensive for teens!)

Other expenses:

  • Gym membership
  • Subscription services
  • Clothes and accessories
  • Beauty care and services
  • Entertainment and activities

Most teenagers do not have to pay rent, food, or utilities since their parents take care of those expenses. Later, these become necessary costs.

Pick a Budgeting Strategy

Once you have written a list of all the budget categories the next step is to write down how much you will spend on each of those categories. There are different budgeting methods for this.

Some of the budgeting methods are:

  1. "Pay yourself first" method: This means that you first set aside 10% of your earnings, for example, and pay yourself in savings, and use the rest to pay for expenses.
  2. Zero-based budgeting: This method is based on balancing income and expenses so they are equal. You need to estimate the costs of each budget category and then divide up income to reach zero.
  3. The 50/30/20 rule: This rule means 50% goes to necessary expenses, 30% for other expenses, and 20% for savings. You can adjust these percentages to your needs because not everyone can save 20%, while others are able to save over half their income.

Save First, Spend Later

Teenagers need to learn first how to save so that they can spend money later. This means that they do not need to spend all the money immediately, but first set aside money for savings, and only then spend the rest of the salary. So they will learn to save and to always have savings if they need money at some point.

Set Goals

Every teenager has some goals of their own such as vacationing with friends or wanting to buy a car. It is good for them to have big goals so that they can learn how to save money towards them. For this reason, it is very important to have good habits and keep to your planned budget.

Track Your Habits

If teens want to save they need to see how much they spend. Meeting a goal may require modifying spending behavior or working a few more shifts. For example, if they spend too much on going out for coffee, they can replace that habit with a new one, which is to drink coffee at home, because it is much cheaper.

Adjust Your Budget

If teens see that the budget they have planned does not suit their needs they can revise it. If they spend too much money on things they don't need too much, they can reorient that money and can spend it on things that make them happier.

Learn From Your Mistakes

Sometimes it happens that teenagers miss one month of savings and for that reason, they have to skip some activity that was important to them. Mistakes happen to everyone, especially teenagers who are just learning how to save money. When that mistake happens, they will learn from it and next time they will be careful not to make the same mistake.

Earn More With a Side Hustle

If teenagers want to spend their budget more comfortably, the right solution for you is extra income. You can earn extra money if you work from the comfort of your own home. What jobs can teenagers do? Here are some examples:

  • Walking dogs
  • Baby sitting / mommy's helper in the neighborhood
  • Tutoring in where they have excellent grades in school,
  • Lawn mowing / gardening
  • Basic handyman tasks (power washing, painting, landscaping)
  • Pet sitting / house sitting

These are just some of the jobs they can do for extra income, and they can also find some other jobs that suit their interests.

Be a Spending Minimalist

What is meant by minimalist consumption? That means you spend less. If you are used to buying more clothes, it is better to buy one thing that is high quality, and at the same time a little more expensive, than to buy more low-quality clothes. Another way to spend less on clothes is to buy used clothing. That way, you will be able to save money and spend much less, at least on clothes.

Don’t Give In To Peer Pressure

Sometimes friends will get into the habit of going out to fancy places. These friends may ask "why do you need to work?", or “who cares what it costs?”. These friends don't understand your budgeting goals and may be a detriment to your financial intelligence. Be aware of financial peer pressure from friends, because if your friends are real, they will support your decisions.

Seek Out Help

It is difficult for teenagers to learn everything about budgeting. That is why they need to seek help from their parents and talk to them and look for useful advice that they can give them because they have already gone that way.

Start Budgeting Today

Wealth Meta offers a complete budgeting solution that will grow with you.


The best way for teenagers to understand money is to get their feet wet by building a budget of their own. They will value the money more if they a) earn it and b) learn how to use it vs having their parents pay for everything.

The post Budgeting Ideas for Teens is part of a series on personal finances and financial literacy published at Wealth Meta. This entry was posted in Family and Finances
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