How to Build Your First Budget — A Teen’s Step-by-Step Guide
Learning how to manage money might sound boring, but knowing where your cash goes gives you freedom, not limits. Whether you’re earning pocket money, working a part-time job, or getting ready for university, a budget helps you take control of your finances instead of wondering where it all disappeared.
Here’s how to make your first budget, step by step 👇
1. Know What’s Coming In 💰
Start by listing all your sources of money. That could include:
- Pocket money or allowance
- Part-time job or weekend work
- Birthday or holiday money
- Selling things online
Add them up to get your total monthly income. This is the money you have to work with.
2. Track What’s Going Out 💳
Before setting limits, find out where your money actually goes. For a week or two, jot down everything you spend — snacks, streaming, bus fares, nights out, online purchases.
Then sort your spending into two categories:
- Needs: essentials like travel, phone credit, school supplies
- Wants: extras like clothes, takeaways, entertainment
Seeing your spending in black and white can be eye-opening. You might be surprised how much disappears on small “treats”!
3. Set Your Money Goals 🎯
Budgets aren’t about saying “no” — they’re about saying “yes” to what really matters. Think about what you’d like to save for:
- A concert ticket or holiday
- A new phone or laptop
- Driving lessons
- University or a gap year fund
Write down your top goals and how much they’ll cost. Divide that by the number of months you have to save — that’s your monthly savings target.
4. Create Your Budget Plan 📊
Now it’s time to put it all together.
Here’s a simple example:
| Category | % of Income | Example (£100/month) |
|---|---|---|
| Savings (future goals) | 30% | £30 |
| Needs (travel, phone) | 40% | £40 |
| Wants (fun stuff) | 30% | £30 |
You can adjust these numbers depending on your situation — the key is to plan before you spend.
5. Use Tools to Stay on Track 📱
You don’t need fancy software — a simple notebook works fine. But if you prefer apps, try:
- Emma – good for linking to your bank account and seeing where money goes
- Revolut <18 or GoHenry – ideal for learning money habits with built-in budgeting features
- Google Sheets or Excel – great if you like customising your own tracker
Set reminders to review your budget once a month and tweak it if needed.
6. Reward Yourself (Within Reason) 🎉
If you stick to your plan and hit your savings goals, celebrate! Treat yourself to something small. That way budgeting feels like progress, not punishment.
Remember: budgets are flexible. Some months you’ll save more, some less — what matters is that you’re paying attention.
Final Thought 💬
Budgeting isn’t just about numbers — it’s about confidence. When you know what’s happening with your money, you can make smarter choices and worry less. Start simple, be honest with yourself, and keep improving as you go.
The earlier you learn to manage money, the easier life gets later on — and your future self will thank you.
