How to Create a Simple Budget as a Teen
Managing money might sound like something for adults, but learning how to budget as a teenager can make a huge difference. Whether you’re saving pocket money, wages from a weekend job, or birthday money, creating a simple budget will help you reach your goals faster and avoid overspending. Here’s how to set one up step by step.
1. Work Out Your Income
The first step is knowing how much money you have coming in each week or month. This could include:
- Pocket money
- Wages from part-time or weekend jobs
- Allowance for doing chores
- Birthday or holiday gifts
Once you know your income, you can plan how to use it wisely.
2. Track Your Spending
It’s easy to lose track of where your money goes. For a week or two, write down everything you spend. You might be surprised at how quickly snacks, gaming, or bus fares add up. Knowing your spending habits helps you spot areas to cut back.
3. Set Goals for Saving
Think about what you want to save for. It could be:
- A new phone or gaming console
- Clothes or shoes
- A day out with friends
- Future goals like driving lessons
Having clear goals makes saving more motivating because you know exactly what you’re working towards.
4. Divide Your Money into Categories
Once you’ve tracked your spending and set goals, split your money into categories. A simple method is the 50/30/20 rule:
- 50% for essentials like travel, lunch, or basic needs
- 30% for fun spending like school holiday snacks, outings, or hobbies
- 20% for savings towards your goals
You can adjust the percentages to fit your own lifestyle, but keeping money separate for different things stops you from spending it all at once.
Because our parents still pay for a lot of essentials like travel and food, we’ve started by using the 20% savings rule. Whenever we earn money or get pocket money, 20% is going straight into a savings account that we can’t access until we’re 18. This means we’ll have some money put aside for when we leave school for things like driving lessons and university.
5. Use Tools to Stay on Track
Budgeting doesn’t have to be boring. Use simple tools to help you manage your money:
- A notebook or journal
- Free budgeting apps like snoop designed for teens or beginners
- Envelopes or jars to separate money physically if you prefer cash
Sticking to a system makes it easier to see where your money is going and whether you’re meeting your savings goals.
