Budgeting for Teens: 14 Tips For Growing Your Money Young

Budgeting for Teens: 14 Tips For Growing Your Money Young

While you may need to learn geography and geometry to get your high school diploma, some important life skills aren’t always taught in school. Budgeting is a real-life skill that you can practice everyday to set yourself up for financial success. Check out these 14 tips on budgeting for teens to start growing your money young:

Know Your Income

The first step to budgeting is knowing how much money you make. Whether you have an income from a part-time job or just have a monthly allowance for helping around the house, you should total up the amount of money you make each month. Whatever that number is, use it as a guide for your spending and saving. If that total varies from month to month, air on the safe side and stick to the smaller amount.

Create Budget Categories

The next tip is to create your budget categories. When creating categories, keep in mind two main ones: saving and spending. Under these two categories, list out the different expenses that you’ll be putting your money toward. You can see an example of budget categories below.


  • Savings account
  • College fund
  • Short- and long-term purchases (e.g., a car or laptop)
  • Retirement savings


Necessary expenses:

  • Gas money
  • Phone bill
  • Lunch money

Other expenses:

  • Gym membership
  • Subscription services
  • Other food/treats (coffee, fast food, frozen yogurt, etc.)
  • Clothes and accessories
  • Grooming and beauty services
  • Entertainment and activities

Most teens don’t have to worry about paying for housing or utilities, so don’t include those if someone takes care of them for you. If you do contribute to those, though, feel free to include them as necessary spending expenses.

Pick a Budgeting Strategy

Once you have a list of all your categories, it’s time to figure out how much money to allot for each one. You can do this using a variety of budgeting methods. Learn more about a few different strategies below and choose the one that works best for you.

  • “Pay Yourself First” method: Paying yourself first means that you immediately put a certain amount or percentage of your income into savings. Whatever money is leftover can be spent however you choose.
  • Zero-based budgeting: Want to account for every dollar in your budget? This method operates off of the idea that when you subtract your expenses from your income, the result is zero. Estimate the cost of each budget category and divvy up your income until you hit zero, using those estimates as a guide.
  • 50/30/20 rule: This rule budgets your money based on the following percentages: 50 percent for necessary expenses, 30 percent for other expenses, and 20 percent for savings. These percentages can be altered to fit your needs, and if you don’t have many expenses, you may want to contribute a larger percentage toward savings.

Save First, Spend Later

Now that you’ve decided on a way to budget, it’s smart to always contribute to savings before you start spending. If you start spending before you save, there’s a chance that you might blow your budget one month and not have anything left over to save. By prioritizing the act of saving, you practice discipline with your money and make it easier to stick to the budget you planned in the first place.

Set Goals

Having goals for your money is a great way to motivate yourself to stick to your budget. Maybe you’re saving up for your very own car or a trip with friends. Whatever your goals are, if you maintain your budget and keep up good saving and spending habits, you’ll achieve them in no time.

Track Your Habits

Another helpful budgeting tip is to start tracking your spending habits. By tracking your habits, you can figure out if you can make some realistic lifestyle swaps to save more.

For example, if you find yourself splurging on iced coffee multiple times a week, try out a more budget-friendly alternative like making it at home and putting it in a to-go cup. A simple modification to a big habit may just free up a sizable chunk of change in your budget.

Adjust Your Budget

If you find that your budget isn’t working for you, know that you can change it to fit your needs. For example, if you’re consistently overspending on something necessary like gas, adjust your budget to fit that need better. On the other hand, if you’ve stopped driving as much, feel free to allocate your gas funds somewhere else, like toward savings.

If you’re overspending on something more of a want, like clothes or entertainment, figure out ways to curb your spending. An alternative to this is to think about reworking other non-essential expense categories to free up more funds. Once you have the availability in your budget, you can feel guilt-free about spending on what makes you happy.

Learn From Your Mistakes

Mistakes happen, but what’s important is what you learn from them. Did you fall short of your savings goal and now have to skip out on a fun activity or settle for a cheaper alternative? Reflect on why you fell short of your goal, and think about how you can do better next time. Good spending and saving habits come with practice, so remember to use the feeling of not meeting your goal to do better next time.

Earn More With a Side Hustle

If you find that you’d prefer to have more wiggle room with your budget, look into increasing your income with a side hustle. There are many ways for teens to make extra cash from the comfort of your own home. Try putting your interests or talents to work with some of these side hustles:

  • Start a podcast
  • Pet sit or walk dogs
  • Sell baked goods
  • Tutor others in a skill or subject

Be a Spending Minimalist

When it comes to spending, less is more. That is, you’ll have more money if you spend less. Take on a minimalist lifestyle and mindset with these tips:

  • Try a capsule wardrobe and only invest in select, high-quality clothes
  • Give life to old items by saving money and shopping secondhand
  • Find ways to repurpose and appreciate what you already have

Don’t Give In To Peer Pressure

Life as a teen comes with many pressures. Whether it’s keeping up with current fashion trends or grabbing a bite to eat with friends, you may be tempted to overspend often. Don’t feel bad about not having the latest accessories or asking your friends to hang out at the park instead of dining out. True friends are happy to hang out with you regardless of what you’re wearing or where you are.

Seek Out Help

When it comes to budgeting as a teen, remember to seek out help when you need it. You’re still learning about many different parts of life, and it’s all right to not have all the answers. If you have questions, get advice from your parents or other financial role models. Do your research and read books by financial experts or listen to podcasts online to dive into more complicated topics like investing.

Find a Way to Have Fun

Technology and social media are other resources that make budgeting fun and easy. Use apps to budget right from your phone or check out videos online to learn more about financial terms. Read on to the next section for more advice on budgeting for teens from your favorite social media stars.

Follow Money-Minded Influencers

A great way to level up your money mindset is through social media. Watch TikTok stars break down financial concepts and offer tips in short video snippets. But TikTok isn’t the only place to get digestible personal finance tips and information. Check out popular podcasts and YouTube channels to learn more.