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Budgeting for Teenagers: How Parents Can Help

By Edited Apr 26, 2016 0 0

Control Money, Not the Other Way Around

Most of today's' family problems are tied with irresponsible money management. Many of today's parents didn't instill the proper value of money into their kids. Why should they? There was plenty to go around until the economic debacle. Because of this we should begin teaching our children to use their money sensibly to keep them out of trouble. But they say teaching teenagers to do it is like teaching old dogs new tricks. That's not true really. I know of some teenagers who are just doing fine. They discovered that money is not the master but the slave. We control them, not them controlling us.

Money sense

There are three things we should know about money. We can only spend what money we have. Second, we can only have money if we work. And the third one is we can't spend money if we don't have it. One of the three is false. Which of the three is it?  Yes, your guess is right! Its number three: credit spending. That's the biggest reason for the economic collapse. People using their credit cards like there's no tomorrow.

Credit cards and doing by example

The first thing to do is teach our teenagers about correct budgeting, don't even allow them to have any credit cards. Explain to them the virtue of spending only within their means. Better still; spend less than what they earn. And what do you call the balance between actual money minus less spending? Savings! What do you do with money savings? Put them in the bank! Credit cards are great sources of temptation to overspend.

We can't expect our teenagers to listen to us if we're not practicing what we're preaching. It's called doing by example. If we want your teenagers to save, show them our savings as well.

Save by percentage

Most teenagers are earning their own money already. They have their salaries and sometimes additional money as allowances from us parents, money gifts, and so on. They need guidance from us parents how set aside some of their money for savings. Saving by percentage is more advantageous than by saving by expectation. This is how it works. They shall set aside some percentage of their money as savings. Let's say 5% monthly. That's sure money in the bank. The other way of saving runs like this. I'll spend all my salary earnings along with the allowance I get from my parents. I'll save my birthday or Christmas money instead. Is this wise or what? This is not going to work; not by a mile.

Essential and none essential expenditures

Remember, as teen-agers, they have to pay their taxes and spend on tuition fees, transportation expenses, food & clothing expenditures, and cellphone bills. These are the fixed expenditures. They're considered as essential expenses. There are also other types of expenses which are spent for rest and recreation; vices and habits; body accessories and grooming. These are called non-essential. Some like to include clothes as none-essential; maybe it means designer or branded clothes.

Make a list

Making a list of income against expenditures will give us clearer insight on what should be done with our money. It's one way of putting sense to our finances.  Teenagers should also be taught the same to help them save and stop getting broke all the time.



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