Showing your teens how to budget sets them up for success – and the earlier you do it, the faster it becomes second nature for them. Seeing their expenditure set out clearly can help them to spend within their means, which is beneficial to their overall financial education.
Related: Money management for teens
Budget planner worksheets for teens
Your teen may roll their eyes at the thought of using a budget planner, but seeing their spending in black and white really helps to drive home messages about money and financial management.
“Budgeting is a life skill because it introduces life lessons like patience, planning ahead, and smart decision making,” says Beth Zemble, VP Education, GoHenry. “Teens who budget are planning ahead, setting their goals (both short- and long- term), and learning to live within their means, delaying gratification and restraining their spending habits.”
Beth adds: “Budgeting also teaches teens to create a plan for saving. It reminds them to ‘pay yourself first’ and to save money as part of a budget. They also can budget to give or to invest, which means they’re learning to think about their future and consider what they can risk as part of their budget.”
Studies show that writing things down triggers more robust brain activity and is associated with stronger memory retrieval. This means that if your teen fills in a budget planner, they are more likely to think about what they are spending and remember that money isn’t an unlimited resource. Plus, allowing them to manage their own budget will help them feel in control of their finances and – hopefully – only spend what they can afford.
GoHenry budget planner
Download our free budget planner worksheet
To create a workable budget, you need to look at two things:
- Money coming in (income)
- Money going out (expenses/spending)
Explain to your teens that when their income is higher than their spending, they are saving money and in a great position. However, when their spending exceeds their income, they risk falling into debt or not being able to buy the items they need.
Therefore, the aim of a budget is always to ensure that you are spending within your means, i.e. you have enough money to buy necessities and buy at least some of the things you want. A budget also helps you to spot when you’re overspending and do something about it: either spend less or earn more.
Examples of income teens can add to their budget
Our latest Youth Economy Report gives a unique insight into the earning habits of over 450,000 GoHenry kids in the UK. Four in ten kids (41%) say they aren’t earning enough – with 7 out of 10 kids not expecting a bank of mum and dad handouts but willing to make and save money themselves. Here’s how:
- Pocket money
- Salary from a part-time job
- Income from a bedroom home business
- Earning for extra chores
- Gifts on birthdays
- Gifts at Christmas
- Rewards for hard work
- Reselling items like clothes and trainers on marketplaces
Examples of expenses teens can add to their budget
Everyone (including adults) is guilty of forgetting some of the items they pay for, which is why listing expenses is such a helpful exercise. Here are some of the expenses your teen may have.
- Phone contract
- Socialising
- Subscription to music and streaming services
- Coffees
- Takeaways
- In-app gaming purchases
- Travel
- Clothes
- Eating out
- Gaming consoles
- Subscriptions to apps and sites they have forgotten about
- Birthday gifts for friends and family
- Amazon buys
- Impulse buys
- Lending money to friends
How can I teach my teen about budgeting?
With teens, it’s a good idea to keep things as simple as possible to keep their attention. Start by covering essential budgeting topics such as:
- What’s a budget?
- Why you need a budget
- What a budget includes
- What are their money goals?
Then explain that a budget is a monthly spending plan outlining where their money comes from and where it goes. Explain that learning to budget now will give them a better relationship with money when they go to university and leave home.
How can GoHenry help your teen budget?
Use the budget planner alongside the GoHenry app & teen debit card, which allows your child to view their expenses, set savings goals and see how much money they have left when they are out and about. The in-app Money Missions also help teens to develop their money skills through a series of bite-sized, interactive games and quizzes designed to accelerate your child’s financial literacy. Use the individual mission on budgeting to help with filling in the planner, and budgeting on the app.
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