Fear not, creating a budget as a teen isn’t rocket science! Though it is kind of accounting... Here’s how to create a budget in eight steps:
Looking at what you need to spend versus what you want to spend will tell you how much you can save, and where you can eliminate spending. Necessities might include money for transportation (whether that’s gas money or bus fare), school supplies, your phone bill or data plan, etc. Spending on takeout and entertainment like movies, concerts, or games would count as discretionary spending.
It’s also a good idea to categorize your discretionary spending. For instance, you may notice that you put a lot of your money into a particular hobby, or into spending on food and drinks when you’re out with friends, or on clothes. Separating these expenses into their own categories within your discretionary expenses will make it easier to track your spending, and help you create micro-budgets within your master budget.
Once you’ve gone a month or two using your budget, go back and see how well you’ve done, and how well the budget is working for you. Are you over-spending in your entertainment budget? Are you able to put the money left over each week or month into your savings, and are you on-track to meet your goals? It’s ok to adjust the budget as needed—you’ll be much more likely to use it if it’s realistic for you.