We’ve talked about teaching your child about money management, but what about your teen? As your child grows older and has more income – and more expenses – it’s important that you expand on the basics you taught when they were younger and start teaching them how to budget. Here are a few ways you can start teaching your teen to budget today!
Have them start tracking their income and expenses
Before you have your teen make a budget, have them start tracking their income and expenses! If they don’t even know what they’re earning or how much they’re spending currently, it may be difficult to accurately plan for how much different parts of their lives cost. How much income do they have, and from where? Do they have an allowance, a part-time job, or some paid work for neighbors like babysitting or yard work? Have them write down all their sources of income, and have them track how much they get from each place in an average month. In addition, have them track any expenses they may have. Some examples of common expenses for teens include gasoline, clothes, a phone bill, and going out with friends!
Use that information to make a budget and set goals
Once they have a good understanding of the money they have coming in and going out, it’s time to start budgeting! Make a category for each of their types of income and expenses, and talk to them about a reasonable budget for each category. Are there any categories they want to spend less on? Is their income lower than they would like it to be? Help them figure out what they want to change and how to make that happen. This is also a great time to talk to them about setting goals! Some great ones for teens include saving $500, being able to afford a special experience (like an amusement park or a trip to the mall), and opening their first bank account.
Teach them to use free digital tools
While many of us may find a pen and paper sufficient for managing a budget, many teens prefer to use digital tools! There are lots of free budgeting apps out there, including several that can be linked directly to your child’s bank account. Some, like Mint from Intuit, include helpful graphs so your teen can visually see where all their money is going! It may not seem like they’re spending very much at first, but it can add up quickly, and digital tools can help give your teen a full picture of their finances.
Now, you are ready to start teaching your teen about budgeting!