Learning how to budget and manage money wisely is an essential life skill for teenagers. Creating a budget worksheet is the first step towards taking control of your finances and achieving financial independence.
This easy guide will walk teenagers through the key steps of making a budget worksheet to track income, expenses, and savings goals. Follow along to start building smart money habits.
Introduction
A budget is simply a plan for where your money is going each month. Budgeting helps you align your spending with your values, savings goals, and fixed expenses. By creating a budget worksheet, teenagers can:
- Track where all of their money is going
- Identify wasteful spending in areas like eating out or shopping
- Plan their spending around financial goals like saving for college or a car
- Learn to live within their means and avoid debt
- Gain financial literacy skills that will serve them throughout adulthood
Step 1: Determine Your Income
The first step is calculating your total monthly income. Add up all money you earn from regular sources such as:
- Part-time job or side hustle
- Allowance from parents
- Gifts or cash given for birthday, holidays, achievements
- Money earned from odd jobs like babysitting, pet sitting, lawn mowing
Be sure to include both steady and fluctuating income streams. Having an accurate total monthly income amount is crucial for the next steps of budgeting.
Step 2: Identify Your Expenses
Next, make a list of all your monthly expenses. This spending can be grouped into three categories:
Fixed Expenses: Expenses that stay the same each month like cell phone bill, subscriptions, loan/debt payments
Variable Expenses: Expenses that change monthly like groceries, gas, nights out with friends
Periodic Expenses: Expenses that only occur specific months like car insurance, gifts, vacations
Track your past spending to estimate your average monthly costs in each category. Don’t forget to include occasional costs that you’ll need to budget for like school expenses, movies, concerts and other activities.
Step 3: Create Your Budget
Now comes the fun part – creating your actual budget worksheet! This can be done using a simple spreadsheet, budgeting app, or paper and pencil.
Start by listing all of your income streams at the top. Then create categories for your fixed, variable, and periodic expenses. For each category, assign a specific dollar amount you plan to spend that month.
Be sure to allocate money towards:
- Savings – Pay yourself first by setting aside funds for short and long term goals
- Investments – Open a Roth IRA and start investing as early as possible
- Emergency fund – Save for unexpected expenses.
Having an emergency savings cushion will help you avoid debt when surprises come up.
Use the template below or design your own budget sheet to visualize your plan:
| Category | Budgeted Amount | Spent |
|---|---|---|
| 1. Income | $350 | |
| – Allowance | $200 | |
| – Babysitting | $50 | |
| – Part-time Job | $100 | |
| Total Income | $350 | |
| 2. Savings | $70 | |
| – Savings Goal | $50 | |
| – Emergency Fund | $20 | |
| Total Savings | $70 | |
| 3. Expenses | $240 | |
| – Transportation | $30 | |
| – Food | $100 | |
| – Entertainment | $50 | |
| – Clothing | $40 | |
| – Personal Care | $20 | |
| Total Expenses | $240 | |
| 4. Remaining Funds | $40 |
Step 4: Track Your Spending
This vital step is key – diligently track every dollar you spend each month. Save all receipts or use a spending journal.
Compare your actual spending to your budgeted amounts for the month. Identify any problem areas where you consistently go over budget, such as eating out. Look for expenses you can reduce or eliminate to get back on track.
Sticking to your budgeted amounts gets easier with practice. Avoid temptation by limiting cash and only spending money you deliberately budgeted for that expense.
Step 5: Adjust Your Budget
Re-evaluate your budget monthly or quarterly and make any necessary adjustments. Our income and expenses are constantly shifting.
If you get a raise at work or start driving more, update your budget worksheet numbers to reflect your new financial situation. Consistently tracking and adjusting your budget is crucial for maintaining control of your money.
Conclusion
Learning to create and use a budget worksheet as a teenager is one of the most valuable skills you can develop early on. Monitoring your income and expenses will help you achieve financial goals, avoid debt, and become an independent, savvy money manager for life.
Start by being honest about where your money is going each month. Stay organized by using a budgeting app or simple spreadsheet. Make budgeting a habit now and you’ll build the money management skills that lead to financial freedom and success down the road.
