How to Create a Budget as a Teenager

How to Create a Budget as a Teenager

As a teenager, you may not have a lot of income coming in, but that doesn’t mean you don’t need to create and stick to a budget. In fact, learning how to budget now will set you up for success later in life when you’re dealing with larger financial responsibilities.

Only 25.9 percent of the U.S. population ages 16 to 19 were employed individuals, according to the U.S. Bureau of Labor Statistics. Many of those employed teenagers attend school and work only part time.

Teenagers will usually have fewer expenses than adults, but it is still wise for a teen to learn how to budget money properly.

Teen girl budgeting 

Tips to Help Your Teenager to Budget

Know Your Income

The first step in creating a budget is knowing how much money you have coming in each month. This may include money from a part-time job, allowance, babysitting gigs, or any other source of income. Once you know your monthly income, you can start planning how to best spend or save it.

About half of all teens work at or below the Federal minimum wage, according to the U.S. Bureau of Labor Statistics. So if a teenager has a part-time job working 20 hours per week at the minimum wage, they would earn approximately $145 per week.

After a percentage is deducted from their income for taxes, their weekly paycheck is about $130 per week, which equates to about $563 per month.

For a teen who does not work and relies on an allowance from their parents, they must consider that amount as a baseline figure. For example, they receive $50 per week, that equates to about $216 per month. 

Determine Your Expenses

The next step is determining your expenses. This includes both fixed expenses, like your phone bill or car insurance payments and variable expenses, like entertainment and eating out. Be sure to track your spending for at least one month so you have an accurate idea of where your money goes each month.

A teenager’s necessary expenses should include all of the monthly expenses relating to housing, employment, schooling and food. Remember to add in any car payments, car insurance and gas to your expenses.

As an example, say a teen’s monthly necessary expenses are $120 per month for car insurance and $80 per month for gas. This teen would deduct $200 from his monthly pay. If the teen had a part-time job earning $563 per month, he would have $363 left over for his extra expenses.

Teen work making a budget 

A Teen’s Extra Expenses

A teen’s extra expenses include the money they might spend on entertainment. This is things such as eating at restaurants, going to the movies and going shopping.

Any expenses that are luxuries for the teen fall under this ‘Extra Expenses’. To work out the total of your ‘Extra Expenses’ just estimate how much you think you will spend for the month on these items.

From the previous example, the teen had $363 left over after paying their necessary expenses. If they then spend $263 per month on his extra expenses, there will be $100 per month left over. 

Disposable Income

The money left over after covering essential and extra expenses is the teen’s disposable income. This leftover money can either be spent on additional luxuries or saved.

If you save your disposable income, a good idea is to put it into a savings account. These additional funds can be used for things like books for school or new tires for their car, that your parents may usually cover. 

Make Adjustments as Needed

After tracking your income and expenses for a month, you may need to make some adjustments to ensure that your spending aligns with your goals and values. For example, if you find that you’re spending too much money on eating out, you may need to cut back in order to save more money or pay off debt. 

Stick to your plan

Once you’ve created a budget that works for you, it’s important to stick to it. This may mean saying no to certain purchases or activities, but it will be worth it in the long run when you’re in better control of your finances.

Printable Savings Trackers

It can be useful to use a savings tracker so you can work towards a specific goal. Printing these out and putting them in a visual place, keeps you accountable and on track to hit your target.

These Christmas savings trackers are a great way to manage your money leading up to the festive season.


Creating a budget as a teenager may seem like pointless task, but it’s actually a great way to learn good financial habits that will benefit you for years to come.

By following the steps outlined above, you can create a budget that works for you and helps you achieve your financial goals. So what are you waiting for? Get started today!