As a teenager, you are not quite an adult, but just at the steps of it. There is a world of opportunities awaiting you and you can’t wait to start the next phase of your life. That being said, have you given any thought about money matters and how you are going to handle that when you step into the real world? Have you considered the importance of becoming financially literate when you venture out? Basic budgeting skills will help you plan and set you up for handling money in the long run. If you do not have a financial plan in place, find a way to make your work equally hard for you, you will end up working until the last hour to meet your expenses, wants and needs.

How do you grow your money as you’re growing?

Know your Income –

The first step in budgeting is to know your income. As a teen you your source of income could come from part time work, allowance, prize money, gifts and rewards, this will be your monthly income. This will be the base and guide for your spending and saving.

Calculate your expense –

These are the expenses that you are incurring or going to incur regularly, as a teen, they most will be phone bill, eating out, clothes and entertainment like movies, etc. this will form the base of your regular monthly expenses. Include any expense that may come up not so frequently as well like purchasing gifts, giving treats, etc.

Pay yourself first –

This actually means that you immediately put aside a certain sum of money into your savings. This way, you Save first and spend Later. When you prioritise saving, you practice discipline with your money and make it easier to stick to the budget.

Set up goals –

Having goals, either short term or long term, gives you purpose to your saving and will motivate you to be on track with your budget and planning. Short term goals can be, college fund, rent, choose career path, etc. whereas, long term goals can be retirement fund, house, etc.

Track your habits –

When you start tracking and writing down your spending habits, it will give you some perspective on unnecessary or unwanted expenses. Depending on what you notice, you can move to a more budget friendly alternative.  This way, you will free up money on your budget and put it to some good use.

Spend wisely –

Managing money can be tough as you are tempted to buy things in lieu of instant gratification. It is indeed a wonderful and exhilarating  experience to buy something out of the money you have earned. But if you don’t manage your spending and sustain your hard earned money with discipline, you could end up in a financial soup in the future.

Credit cards can be a boon and bane at the same time. If you get into the vicious circle of debt, there is no end to it. If you use it judiciously it can be a very empowering tool especially in case of an emergency or for a major purchase. It should be avoided to buy unnecessary things as it is a debt that you will have to pay, if you fail to do so, high interest is added and leads to a mountain of debt.

Visit your budget regularly –

Make regular adjustments to your budget based on the changes that are happening, which can be an increase in expenses or a new source of income. The budget is dynamic and needs regular monitoring for it to be realistic and of some help to you.

Learn from your mistakes –

We are humans after all and tend to make mistakes. The smart thing to do is to learn from them and make changes. If you realise that your expenses are more than you predicted or if you fell short of savings to purchase something you needed, retrospect and make changes accordingly. With experience you will learn how to analyse and anticipate your savings and expenses.

Seek help and advice –

As you are new to budgeting and its intricacies are still a foreign language, seek help and advice from your parents and family. Never hesitate to ask for help from a trusted and experienced expert, who will guide you in reliable and informed decision making.