Written By: Spencer Fohr
Almost all teenagers can agree that creating room for college savings and personal spending is especially hard with very low pay, sometimes minimum wage. Not only is it hard to create room for savings and personal spending, but actually performing that task is extremely difficult. All of us have had that moment when we know that we should save the money that was supposed to be in savings, but we see a candy bar or a restaurant and can’t resist to only spend a couple bucks. Little did you know, is that those small purchases put you in a position in which it is almost impossible to save your money. This is why creating a budget is very important to us teens. Therefore, we are able to save for our future, while leaving some money for personal spending.
Firstly, we need to make the budget. This is a place where teenagers struggle. They don’t quite know how much of their paycheck they should delegate to each category. The 50/20/30 budget is a standard that a lot of teens go by. Do not assume that this is the exact way you should be splitting your paychecks, but it sure is a good guideline. Let’s use an example for this type of budgeting. Say that a student is making $200 per paycheck, in which they are paid every two weeks. Right off the bat, there is not much that a teen really needs, even though we think we need more than we do. We have free housing, food, and insurance that we don’t pay for. Therefore, I will be reducing the 50% from needs to 35% needs, and 35% savings. After splitting up the money from a $200 paycheck, $70 will go to both savings and needs, while wants gets $60. Even then, we have extra money from the needs category. One of the only things that teenagers really need is gas money and sometimes food or a driving ticket, but I wouldn’t count on it. At most, you will be spending about $35-40 on gas every two weeks. But, there could be other things that pop up, so having that extra $30-$35 is very important. Also, even if you happen to not spend that extra money, you could split that into the wants and savings category. Like I said before, there are some factors from person to person that could alter this base budget, but it is a very good starting place for teens who don’t know where to start.
After we create the budget, we need to put it into action. This is not only the hardest step for me, but also other people. Even though we have a virtual budget, not spending the money that is supposed to be saved for college or gas is difficult. For that reason, I have come up with a few tips. One tip that I find most effective is leaving cash or your debit card at home when you are going to school. One thing I personally find is that I like to get food on my way home from school, which is only a few bucks, but it definitely adds up. So, leaving extra money at home when you are going somewhere in which you won’t need money is very effective in maintaining your budget. Another quick tip to saving money and staying loyal to your budget is thinking about your spending often. So, if you are at the store looking for a specific item, don’t think about the other things you could be buying, but instead just the thing you came for. This is not to say that you should never spend any of your money, but it is ensuring that the money you want to save, is in fact being saved. Also, thinking if the item you are impulse buying at a store is truly beneficial to you and your future.Lastly, keeping track of your spending is a great way to manage a budget and spending beyond that point. Making sure you aren’t going above your limit of wants money is a crucial part of that. Looking back at your spending on a weekly or monthly basis makes you aware of your ability to stay loyal to a budget. Also, it helps if your budget doesn’t completely fit you. Furthermore, you could change your budget to make it the most effective for saving money for you specifically.
Budgeting is a fairly easy thing to start, but a hard task to perform. Studies show that only 40% of teens actually have and maintain a budget. Those teens are surely looking out for their future. So, I advise you to join that group of people for the benefit of yourself and your future.
I agree this is super important and its actually really interesting you gave the example about the candy bars because I feel like most teenagers don think about the fact that there will always be opportunity costs. Right now would be a great time for people to start a budget because they will start to get the hand of it and by the time when they are really going to need to budget, they will already be somewhat experienced. This might allow for them to be better with their money because they have already had some experience.
ReplyDeleteI totally agree, I believe that if teenagers learn how to balance their paycheck and savings, it is better preparing for how college is going to be and then you life when you are older. Starting younger will help with those who struggle with their spending and knowing where their money goes, as it gives them the chance to make mistakes with a lower income and not having that many responsibilities to pay for, compared to when they are older, not knowing how to handle their money when the time comes.
ReplyDeleteI definitely agree that teenagers have a harder time budgeting, especially because we do not have a large source of income. I think that it is challenging because we also spend a lot when we hang out with friends, it can also be difficult as we spend things on gas and necessary items, all on top of saving for college. I think that, as you stated, it is easy to being a budget and make one, but never follow through on a budget at our age.
ReplyDeleteBudgeting as a teen is very important because it will help us in the long run. I can't believe 40% of teens are already budgeting! I appreciate that you explained how to properly budget and put it into action. I think what might also help is having a set amount of money each month that can be spent on personal wants. That way you will have the same amount of money each month and will understand what you can and can't buy. This will also help you be more aware of the price of goods.
ReplyDeleteI agree that budgeting is important for teenagers to know how to do, and how spending $3 can add up very quickly.
ReplyDeleteTeen budgeting is very important and I’m glad you’ve brought up great points to help us all in the future. Throughout the blog post, you made sure to start off with a base, 20% of the paycheck goes into savings, 50% goes into needs, and 30% goes into your wants. I think this is a great strategy to get people started with budgeting, getting a plan set up, and making sure that for each paycheck they stay on track with budgeting their money wisely, and consistently keeping to that goal. I also like the mini tips that you give to help people through the struggles that might come from budgeting. It’s a great point to bring up that $2-$3 adds up every single time. While it may seem small in the moment, it continues to add up, and before you know it, you’ve wasted $100 or more on food that you may not have needed.
ReplyDeleteI agree that budgeting is a very important strategy for a teenager to implement when working a job especially because we're so impulsive. I thought it was a great tip for students to leave their debit card or cash at home while they go to school. Currently, I do stop at restaurants on my way home every so often so this tip will save me some money. Something I always look forward to doing since I can't invest yet.
ReplyDeleteTeen budgeting is indeed very important. I have already implemented the strategy you talked about where we leave our money at home. Recently, it has worked really well and has helped me save a lot of money.
ReplyDeleteI agree that budgeting should be started early because budgeting is an habit. If you don't start from a early age, you teens, then it will be much harder as an adult.To experience the positives of budgeting and the full outcomes, you need to do it for a long time.
ReplyDeleteIt's a very smart idea to have teens creating budgets early on in their life so that they have the experience with it for later in their life when budgeting becomes considerably more important due to all the different costs that much be paid for as an adult.
ReplyDeleteBudgeting is a huge problem with teens. We don't know how to spend and save the little money we make properly. We need to start now and you have pointed out to me just exactly how.
ReplyDeleteI agree that it is important for students, especially us teens, when it comes to saving and keeping track what we do with our money when we spend it.
ReplyDeleteAs a teen myself, I definitely think creating a budget will help me maintain my spending. I am definitely one to fall to spending a couple of bucks either on my way to or from school or work, typically on coffee. Since tracking my spending in personal finance, I've found that most of my spending is impulse spending on things I don't need and can eliminate easily. My goal before college is to save money for spending then, so by getting rid of these unnecessary purchases now I can have more for later.
ReplyDeleteI like how you said to leave your card and cash at home so that you can save a little money and not stop and get food on the way home. But budgeting is very important for everyone so good topic.
ReplyDeleteBudgeting is important, however, I know some people who are required to pay their phone bill, new clothes, car insurance and other expenses. What would you recommend to teenagers who don't have enough money to meet their needs?
ReplyDeleteI agree that budgeting is something that really sets your finances in place and can determine whether you are good or bad with your money. I also believe that it is important to stand by what you budgeted for yourself in making sure that you follow it so that you will have the money you need for when you need it. Additionally, it is important to realize that every dollar is still spending money. This aligns with the article in saying that eventually that small purchase adds up and so it is important to understand whether you actually need that or if you're getting it because it seems cheap at the time.
ReplyDeleteI do think it is very important to budget as a teenager. Not only is it important to budget right now I think that it is very easy as currently we don't have many expenses to pay for and also with barely any expenses and having a little paycheck, it is much easier to decide how much you want to put away for savings and how much you are going to keep.
ReplyDeleteI have never really made a budget before and just starting to track my expenses in this class I realized how much I can get carried away with spending money on things I don't need and food. This article was teen focused and made it easier to understand how to split up a smaller paycheck compared to adults. Adult tailored budgets account for things that we don't normally have to deal with as teens like rent or food and the budget amount is more than our $200 paychecks which doesn't fit well with our lives. I found benefit in reading about a budget tailored for me that I can actually use.
ReplyDeleteI agree that budgeting as a teen can be very difficult. Since most of us don't have a large paycheck it can sometimes seem pointless to bother with creating a budget, but at the same time, it's important to know how to create a budget. Leaning how to create a budget now while we don't have many expenses will make us more prepared for the future.
ReplyDeleteI agree that it is smart to create a budget during our teenage years. For all of us in high school being teenagers, we can all admit to spending those unnecessary dollars on a large coffee or just one chicken sandwich. It seems so minuscule, but all of this money will add up so much over time. I feel as though if we track our spending and make smarter decisions with our spending, it will better us for the future and help us to control our spending once we become adults.
ReplyDeleteI think that the 50/20/30 budget may be helpful for us in the future when we have needs to pay for such as housing, food, etc, and like you said our parents cover a lot of those expenses for us. Do you think instead of shifting it to 35% for savings and needs, and 30% for wants it should be a larger shift to savings to better prepare to have to pay for needs of the future? Or even just the remainder of that 50% need budget can just go into savings instead of more to wants?
ReplyDeleteI want to know how the difference between a need and a want that feels like a need effects spending. You mentioned gas as a need for teens, however this might be dependent. For instance, getting gas because you and your friends are going to Great America is different from getting gas to go from school and work. While this is a bit of an extreme example, these low flying "needs" could be very detrimental to maintain a budget and could drive up the percentage of your income spent on needs/wants and not savings.
ReplyDeleteI have mixed feelings about putting theories behind how to spend money because it doesn't encompass all the variables that are relevant when it comes to spending money. For example, as a teenager, is your money helping support the family, is there a bigger thing you are working towards, do you actually want what you are spending money on? All of these things have to be considered before actually making a decision on how to spend your money.
ReplyDeleteI think that starting a budget as a teen is a great idea! I never really considered budgeting right now, and I planned to start when I left for college because I would have living costs. This really made me reconsider my previous plan about budgets. One thing that I think is great is that a budget "guarantees" a certain amount to spend which curbs your desire to impulse spend because you don't constantly have to decide between saving and spending.
ReplyDeleteI do think there is definitely something to be said about the importance of physically dividing up your money into different categories. A lot of people probably think that they are doing this, but just try to keep track of it in their head, however, this is not entirely accurate and this could end up causing people to spend more than they think they are spending when small purchases add up. I think I could benefit from following the strategy in this article because it would allow me to more precisely keep track of my expenses and make sure budgeting correctly between my needs, wants, and savings.
ReplyDeleteThe idea of creating a blog about teen budgeting is very smart. I agree that lots of teens have a hard time saving their money for the important things later in life, so I think that this blog post is a great idea. I find the 50/20/30 budgeting guideline as a great starting budget idea. You can learn how much extra money you have and also use some money to satisfy your wants. Me personally though, never used this budgeting technique (I save 90% of my check), but I still find it pretty useful. Lots of kids would be able to benefit from the 50/20/30 who aren't that good at saving money if they are able to stick to this.
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Great blog that really surpasses the other blogs addressing the same problem. The fundamental superiority is in the call for action as it is missing in most other blogs. When you included it the average high schooler finds motivation to apply the plans. As you said the application is where we struggle, and that is why your blog is great.
ReplyDeleteHonestly, I have never really budgeted my money, but I should probably start soon. As you mentioned in the post, teenagers usually have most of their needs payed for by their parents. To go along with that I don't really impulse buy that much. Overall, I don't spend much of my money at all, other than buying things like food and gas. So, I think for me instead of budgeting I should really be focused on saving my money. I don't need much money at all in my bank account, so it makes a lot of sense to save right now. On the other hand, budgeting is a very important skill to have later in life, so I should probably begin working on an effective budget.
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