How to Teach Teens About Budgeting

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How to Teach Teens About Budgeting

Learning to spend money responsibly is a life skill teenagers will use their entire lives. By making monthly budgeting a habit, like brushing their teeth, they’re more likely to do it for the long term. Plus, by showing them how to budget as a teenager, you can guide them, helping them if they get confused or frustrated. Here’s how to get started.

Cover the Basics

First, explain these three things related to budgeting for teens.

  1. Why should they budget? Budgeting ensures people don’t spend more money than they have. It also lets them plan for high costs down the road, such as purchasing a car or a home.
  2. Fixed vs. variable expenses: Fixed expenses, such as rent or cell phone bills, stay at the same level every month. Variable costs rise and fall monthly, like credit card bills or money spent on fast food. Teens need to account for both in their budgeting.
  3. The importance of saving: Savings can function as a safety net if you lose income or help you buy something you want, like a new iPhone. Both aspects of saving are essential. They offer security and reward you for smart budgeting.
How to Get Your Teens Interested in Budgeting

They may not be eager to learn these budgeting tips for teens, especially if they feel obligated to do it. Consider talking to them about their money goals. Consider using these tips to spark their interest:

  1. Talk about money goals: Is there a specific item they want to buy such as a gaming console or a car? Having a specific goal to work towards and knowing that budgeting can help reach that goal can help keep them motivated.  
  2. Introduce them to banking tech: Teens love technology, so consider having them open an account and download our Members 1st mobile banking app to help them budget. Our goal savings accounts allow them to visualize their target, track their progress and manage it all in our app.
Setting Financial Goals for Teenagers

Teens’ financial focuses differ from adults. They have fewer monthly bills, so their goals usually involve saving for something vs. paying off debt. To help your teen set goals, ask them where they see themselves in a few weeks, a few months and a few years. Their goals may include:

  • Saving money for college
  • Buying a new car
  • Paying for prom clothes
  • Purchasing a piece of sporting equipment
  • Creating an emergency fund for after they get out of school
Determine and Set up Budgeting Categories

The 4 primary categories for budgeting as a teenager include earnings, spending, saving and giving. Teen budgets are different from adult budgets because teens often have less budget-related items. Sit down and help them outline what belongs under each category.

Download our free Budgeting Template for Teens to help your teen manage their money. 


This category is for their monthly income sources. Include your teen’s income from everything, including income from:

  • Jobs
  • Babysitting
  • Mowing lawns
  • Cash gifts from grandparents

These are expenses your teen will incur and will vary according to the individual. Possibilities include:

  • Car insurance
  • Gas
  • Monthly music or video service subscriptions
  • Clothes or sports gear

This is where all those budgeting goals live. List out all sources and items your teen may be saving for, including:

  • Savings account
  • Continuing education
  • Short-term goals (game console, new bike)
  • Long-term goals (computer, car, etc.)

Giving back is always a budget item teens should consider. Even if they can only spare a few dollars here or there, have them pick a cause or charity they are passionate about and allocate money to it each month.

Have them follow the 50-30-20 rule to determine how much money should go to bills, wants and savings. Show them how to use digital banking tools to automate transferring money from their checking account to their savings.

Start Tracking That Budget!

Give your teen our budget-tracking template to record their expenses. Encourage them to tackle budgeting on their own, then report back to you, so you can help identify what worked and what didn’t while reevaluating goals regularly. Praise a job well done and discuss other ways to budget, like the cash envelope method, as your teen becomes more familiar with saving money.

Using mobile banking allows teens to keep up with their account balances. Encourage them to set up their mobile wallet to save time at the store.


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