Managing Finances for Teenagers

Your 16-year-old has gotten their first job, and is spending more their whole check 10 minutes after they get it. Well, here is your chance to turn that viscous cycle around! This guide to managing finances for teenagers is a helpful guide for parents and the youngest members of the workforce.

Managing finances for teenagers may seem like an impossible dream, but the best way in which to do it is to start early. If they have an allowance, show them how to manage it when they are young. Provide buckets or small piggy banks into a number of categories. Depending on their age, these categories will be different. Examples for younger children would be "Candy", "Helping Others", "Toys", and the ever usefull "Stuff" category.

For teenagers, it may be harder (or easier) to categorize.

Do you spend your money on fast food, clothes, makeup, electronics, computer stuff, video games, soda, church, donating to the less fortunate, Credit Card, school, sports, gas, your car, bills, etc? Well, your first step is going to be to gather 5 envelopes and label them with your 5 biggest expenses. If you want to be more creative than envelopes, feel free.

When you get paid, cash your check. Do not put it into your checking account (unless you have recurring bills that come out of your account) and figure out how much you spend (or want to spend) on each label every pay period. When that envelope is empty, don't spend any more on that category unless you have to (gas to get to school for example). It may be hard to see 5 dollars left in your makeup budget, and you don't plan to buy any more makeup this pay period, but don't spend it on your car until your next pay period. It may be a hard thing to do, but it is a necessary thing. Once you figure out how much each category 'costs', you can start playing around with the envelopes in the middle of the pay period.

Follow this simple piece of organizational advice, and be well on your way to knowing the secrets to managing finances for teenagers.