However, you should consider cultivating a few money-saving habits as a teen that will set you up for success later in life. If you’re planning to build your finances for a car, school, or general costs of living, here are some budgeting tips to start practicing as a teen.
First, Learn the Basics
Before you begin practicing budgeting tips, you need to learn what a budget is and how to maintain a successful one. A personal budget consists of a spending plan that factors in income and expenses—yes, you’re still young and won’t have much to put on it yet, but you can begin practicing how to map a plan correctly.
As a teen, consider how much income you receive monthly—this could include an allowance, a part-time job, or money earned from a hobby or side hustle (like selling clothes or flipping designer sneakers). Then, determine what expenses you are responsible for.
Do you pay for your own gas, lunch, or streaming subscriptions? Include those factors in a budget. Lastly, write down future expenses you’re likely to encounter down the line.
Maybe you’re saving for a vehicle, school tuition, or something simple like a new PlayStation.
By learning how to visualize a budget at a young age, you can create a more comprehensive plan as your income and expenses become more complex.
Since most teens have little to no financial responsibilities, now is the perfect moment to save nearly every penny you have.
For starters, go to your local bank and open a checking account and saving account—for students, most banks don’t charge high fees or require minimum funds, and you can even attach your account to a parent or guardian for more security.
Once you’ve experienced managing your own checking account, consider opening a credit account to build up good credit.
If you work a part- or full-time job, determine how you’ll divide your funds within a budget. The best adult method is 50/30/20:
- 50 percent of your income goes toward essentials
- 30 percent goes for miscellaneous costs
- 20 percent goes straight into savings.
Tweak these numbers to fit your needs and desires. As a teen, your essentials should still be minimal, so you can slide more of that money into savings.
Set Attainable Goals
The best budgeting tip to practice as a teen is simply setting realistic goals for your future finances. The biggest reason people fail to reach a goal is usually that they were too lofty to begin with! If you’re aiming to buy a car, look for quality used vehicles with low down payments and monthly plans.
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If you’re saving money for college, utilize resources at school to determine which schools you can attend and afford. Whatever the dream, always create goals that fit within your means.
Remember that no teen needs a stellar budget at such a young age—many adults still struggle with saving money! The point of practicing proper saving habits early is to prepare for adult life and the challenges that come with adulting. Be patient and allow yourself to make mistakes.
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