Budgeting

10 Tricks to Help Your Teen Learn to Budget

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In our house, my teens are responsible for their own money and have their own bank accounts. Today I’m talking about how to help your teen learn to budget. It’s not as hard as you may think!

Help Your Teen Learn to Budget @ ShortOnTimeAndMoney.com

As soon as my kids turned 16 we went down to our local bank and opened up an account so they could start saving money and learn how to budget. It’s a simple process. You just go down with your teen and open up an account. If they are younger than 18 you may want {or be required} to put your name on the account as well.

The bank clerk can help you choose the right account for your teen. We opened up student accounts and made sure there were no fees involved.

10 Tips to Help Your Teen Learn to Budget

Learning how to budget is an essential life skill that everyone should know. Whether or not your teen has started their very first job, it is never too soon to learn how to budget. As your teenager learns about budgeting, they may not be very good at first.

However, over time they will learn about money and how it works. Before long, they will start surprising you with their amazing skills.

Check out these tips to help your teen learn to budget!

#1. Create a Spending List

The picture of how much money you spend is never truly clear, until you write down everything that you pay for, and study it! One of the best things you can do to help your teen learn how to budget is to create a spending list.

#2. Set a Savings Goal

Having a savings goal is an excellent way to stay motivated! Keep the goal small, and once it has been attained, create a new one. As your teenager learns more about money, they can set bigger goals.

#3. Include Your Teen in Your Budget

One of the best ways to help your teen learn about budgeting is to include them in your own finances and budget. Let them see where you make sacrifices to pay for certain items. Your teen will learn the most about money by watching YOU!

#4. Jot Down Wants and Needs

Being able to differentiate wants from needs is a huge part of budgeting. Create a list of items that your teen plans to purchase, and help them determine if each item is something they want, or need.

Trust me, this will be one of the best tips you teach your kids about money. Some adults can’t even handle this aspect of budgeting at times.

#5. Envelope System

Having envelopes of cash is a great way to follow through when budgeting. One envelope is for saving, one envelope is for giving, and the last envelope is for spending (think 20% of income towards saving, 10% towards giving, and 70% towards essential spending).

#6. Use a Spreadsheet

Technology is basically a teenager’s lifeline, these days. Use spreadsheets, like Google Docs, or Microsoft Excel to help your teen make a hard copy of their budget. Plus they are easy to adjust, when necessary.

This is a life skill that they will carry with them for many years to come as well. Learning how to manage money plus Excel, these are both priceless life skills.

#7. Download a Budgeting App

There are tons of apps that will help you track your spending, and budget. While you should definitely teach your teen how to accomplish this without technology, using an app is an additional way to make budgeting more fun. If your teenager decides they don’t like a specific app, they can always change it up.

#8. Stop Funding Your Teen

It’s okay to help your teen out when they need it, but once they get a job, allow them to start paying for their own clothes and extracurricular activities. They will quickly learn they cannot have everything, and will have to learn to prioritize and manage their money, as necessary.

This is honestly one of the best gifts you can give your teenager. Let them fly free from you micromanaging their money. Let them learn these tasks on their own.

#9. Let Mistakes Happen

Allow your teenager to make mistakes, so they can properly learn how to handle them, when you are not around. If your teen goes over budget, don’t come to the rescue right away. Let your teen find their own way out!

Mistakes are bound to happen with anyone who is managing money. Your teenager will need to learn how to manage their budget, mistakes will be made along the way, but they will come out on top.

#10. Pick a Day to Revise Budget

It is important to look over your budget every month or two. Get your teen into the habit of doing so, by picking one day each month to review their budget. You can have these meetings with your teenager. They may have questions and they will want you to answer them.

This budget meeting can be once a week or once a month. Let your teenager be in charge of setting up this meeting.

Do you have any tips to add to this list? I’d love to hear about your best tricks to help your teen learn to budget.

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