Teaching Teens to Budget

Budgeting skills can be taught at any age and must not be delayed until one is already working. Starting at an early age builds good financial habits that will only improve as one gets older.

We highly encourage younger people – especially those in their teens – to start putting together a budget for the money they earn so they may understand its value and not spend excessively. There are different ways to teach teens how to budget their money - you know your teen best, use our tips below to craft education suited to their needs.

Getting a Job
A job teaches your young adult responsibility and shows them how to plan their finances. Discuss with your teen the amount of money they need to save to cover for expenses that they will incur such as gasoline, insurance, food, bills, or others.

A job helps them learn the value of each cent they make once they are on their own. Understanding the work needed to make money will teach them how to manage their finances properly.

Budgeting Reports and Projects
Teaching your teen to monitor their expenses will help them better understand where they are spending their money. They will also learn which parts of their budget need work; which items to remove to save more money and where to invest to improve their budget.

Planning the next family vacation or looking for the best deals on mobile phone plans or restaurants help your child learn how to work within a budget. Give them an amount to work with, and let them plan and look for the best value.

Goal Setting
Setting a goal gives them something to save for and a structured budget to achieve it. Saving for part of their college fees, tuition, a car, a new gadget or for insurance teaches your teen to save money and make ways to earn more or learn where to cut back to reach their goals.

Art of Thrift
Learning how to budget is tied with thriftiness. Managing unnecessary expenses and excessive spending helps your teen learn how to plan their finances. Look through your teen’s expenses with them and discuss where to reduce to save more. Show them the importance of spending within their budget, especially if they have a job, so that they don’t get into debt at an early age.

Teaching them important life skills like how to do basic maintenance on their car, or how to cook so they don’t depend on dining out when you’re not around, will help them not only develop confidence in themselves but also help them understand the value of their money.

Learning how to budget as a teen is of utmost importance as your young adult matures and begins to collect a paycheque.  Since provincial government school boards  in Canada have not implemented a great deal of financial education, it is up to you as a parent to take the lead. Once your young adult understands how difficult it is to earn, encourage them to create a budget and work within it to meet their wants and needs.