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How to help teenagers budget

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Teenage boy counting out money

Saving up for large purchases and following a household budget might be all in a day’s work for you, but for teens, it’s a different story.

Here’s how to help your teenagers get smart about their money:

Understanding paychecks and income

One of the most important documents in your kitchen drawer is your paycheck. This little stub shows exactly how much money you’ve earned and where some of it goes before the rest ends up in your pocket.

Sit down with your teen and let them see what a typical paycheck looks like, so they can hopefully gain some perspective. While you’re there, show them what your outgoings are spent on – including food and bills that cover their living costs. Help them understand that every penny counts, even when you’re an adult!

Making a budget

Making a budget for your kids might sound like an impossible task. At an age where impulse buying feels like second nature, and with limited funds, your teen won’t be too thrilled about the idea.

Here’s how to make a budget for teenagers:

  • Calculate their income. Whether it’s a gift from a relative they didn’t spend, a part-time job, or their allowance for chores, showing teens what their regular income is gives them an idea of how much they can spend without coming to you for handouts.
  • Expenses. Now they know what comes in, it’s time to show them what goes out. The cost of cell phone bills, gas money and school lunches can add up. This is a great time to help them make savings, by shopping for cheaper data plans or taking lunch to school.
  • Saving vs spending. Subtract outgoings from their income and your teen is left with an amount to spend or save as they wish. Before they rush off to make their next purchase, teach them the value of saving for something they really want later down the line. A car is often a good example.

Keeping track of purchases

Help your teenager understand their money can only go so far. If they’re left wondering how they’re out of cash sooner than they thought, it might help to keep track of their spending. There’s a ton of apps they could use to help. Or do it the old-fashioned way – break out the budget worksheet.

Importance of savings

It might not seem like a big deal to your teen judging by their spending habits, but there are definitely times they’ll be glad to have access to some quick cash. If your teen has a sudden emergency expense like a car repair or a last-minute invite to a concert, there’s only so many times you should be prepared to loan them the cash.

By being able to put some dollars aside every now and then for such occasions – and raising their awareness that these do happen – your teen could rethink their attitudes towards saving in the future.

Separate spending money and savings

Of course, not every cent of your teen’s income has to be saved from their paycheck – even when they’re saving towards something. Discuss with them how they can decide when and how much to spend, and how much to put away. This is another good opportunity to remind them that money only goes so far.

Set financial goals

In order to make that next big purchase – whether it’s a new car or a vacation – you’ll need to set some saving goals with your teen. This can take several different forms:

  • Save a certain amount every week or month. Set an amount to save and help them try to stick to it. Where you feel your teen can cut back on some things to achieve their goals, offer a suggestion or two.
  • Save a target amount. Making a big-ticket purchase with money they’ve saved is a great way to demonstrate their growing confidence and responsibility with money.
  • Save $X by a certain date. If there’s a vacation in your teen’s plans, or maybe even a move to college, being able to save a certain amount before then will show initiative and flexibility.

Helping your teenager manage money is a great way to give them some responsibility and teach them the real value of money. For more advice on budgets, check out the Kroger blog.


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