Although Not Quite an Adult usually focuses on young adults and their money, I think that talking about budgeting for teens is an amazing topic so we can teach people BEFORE they become young adults. Teaching teens how to budget their money intelligently is really important because they are the future! If we don’t teach them how to handle their money intelligently, then they’ll end up in tons of debt and struggle to make ends meet.

In this blog post, I’m going to be talking directly to the teens who may be reading this. However, if you are a parent looking to learn more about budgeting for teens so you can teach that information to your child there will be extra tips and tricks for you at the end.

Okay, ready to jump in? Let’s learn everything we can about budgeting for teens.

The Importance of a Budget for Teenagers

Having a budget when you’re in your teens is way more important than you think. Personally, I neglected budgeting until I was in my mid-twenties and it was (and still is) a huge regret of mine. Learn how to budget for teens can help you do all of the following things at a young age:

  • Save for College: Most people who land on this website do so because they have tons of student loan debt and are trying to get rid of it, if you start budgeting as a teen and save a bunch of your money, chances are you’ll have less debt, be able to save for college, and end up in a better financial position when you graduate.
  • Plan for Large Expenses: Having a budget is also a great way to organize your expenses so you can save for things like your first car, a laptop, or a new phone. You don’t want to make these large purchases willy-nilly without planning for it properly.
  • Save for Travel: One of my favourite things to do is to travel the world, it’s a great way to really get to know yourself while learning a ton about how other cultures live and it can really expand your horizons. However, travel is expensive. Having a budget as a teen is a great way to start planning and saving for travel that you know you’re going to want to do in your 20s.
  • Spend Less: Budgeting is an amazing way to avoid the keeping up with the joneses (aka keeping up with instagram models) that seems so popular these days. Having a budget keeps you focused on what you really want so you can avoid buying things you don’t really need.
  • Develop Good Financial Skills: Let’s be real, tons of people in their 20s and 30s WISH they started a budget as a teen. Why? Well, budgeting at a young age can help you develop awesome financial skills that it takes decades for some people to figure out. It’ll teach you how to be more frugal, save money, and stay out of debt.

How To Choose A Good Bank

One big mistake I made when I was a teenager was using the bank that my dad used, just because he used it. I didn’t do my own research, I didn’t question it at all until I was 22. Every single month I paid $15 of my own money to this bank just for using my cash and it was the worst.

Most banks have student accounts that you can use until you graduate college or university, however, the second you’re done school you’ll be paying a ton of money in bank fees. That’s why I’m a really big fan of the newer, free, online banks.

If you’re in Canada, I highly suggest using Tangerine, it’s the bank I use personally. AND If you use the orange code 50681730S1 when you sign up, they’ll give you $50 for free when you deposit your first $100.

If you’re in the United States, I’ve heard amazing things about Ally! However, I can’t vouch for them personally, since I’m Canadian and have never used them myself.

A picture of two young women wearing denim and holding money on a hot pink background from a blog post on Not Quite an Adult about budgeting for teens

Budgeting for Teens

This 6-step guide for budgeting success is an amazing place to start when you’re learning about budgeting for teens, I really hope it can help you out! Let’s dig in.

1. set financial goals

Since you’re still in your teens chances are you don’t have financial goals like retire by 40, or save for a home downpayment. However, that doesn’t mean that your goals aren’t important. You should start by focusing on your short term goals (i.e., saving for a new pair of air pods) and figure out what things you want to pay for and do in the next 3-6 months.

Next, you should set goals for a little bit of a longer term (i.e., purchase a car or help my parents pay for college), these are the types of goals that are going to be focused on a more 1-2 years in the future time frame.

Take a few minutes to think about all the financial goals you have and how long you think it will take to reach these goals.

2. determine your total income

Without having a great idea of the total income you have coming in, you’ll never have a budget that truly works for you. It’s important to calculate your income with every single source you have. This could include:

  • Part-Time Jobs
  • Babysitting
  • Dog Walking
  • Allowance
  • Etc.

You should also be budgeting any birthday or Christmas money you may get from family members and friends instead of just spending it all.

Let’s say you make $500 a month from your job, $50 a month from babysitting, and you get a $40 a month allowance. Your total income would be $590 for the month.

3. calculate your total expenses

Since you’re in your teens, chances are you still live at home (I hope) and don’t have many expenses. For most teens, expenses include things like:

  • Phone bill
  • Gas (if you have a car)
  • Car Insurance
  • Eating out
  • Socializing

This makes budgeting for teens so much less complicated because you don’t have nearly as much money to spend on things like rent, utilities, or home insurance.

Let’s say you don’t have a car yet (but you’re saving for one), your phone bill is $50 a month, and you decide you want to budget $100 a month towards socializing with friends. This means your total expenses would total $150 for the month.

4. subtract expenses from income

Based on our example from part 2 and 3, you would take your total income (590) and subtract your total expenses (150) from that number. This would leave you with $440 at the end of each month to do whatever you want with.

5. decide where the rest will go

Now that you have the amount of money you have leftover, it’s important to make intelligent decisions about where you want that money to go. It should be in line with the financial goals you set in part 1 and should bring you closer to a bright financial future.

If you’re working towards purchasing a car, you may decide to put all of the $440 towards your car. Or, you might choose to save it for college. It all depends on the goals that you decide on. It’s usually a good idea to talk to your parents about what kinds of goals you want to work towards, they may be lame (at least my parents are), but they have good insights.

6. monitor and adjust when necessary

There you have it, you now have your first budget as a teenager! How does it feel? Great? I thought so. Well, unfortunately you aren’t completely done just yet. You’re still going to have to monitor and adjust your budget when things aren’t working and when you want to change your goals.

Since you’re a teen and don’t have a ton of expenses, you can start by only adjusting when necessary but eventually you’ll need to start holding monthly budget meetings in order to monitor and adjust your budget correctly. The more time you spend working hard on your budget, the easier it will be to make changes and the better you’ll be with your money.

bonus money tips for teens

your credit score is important

One of the best things you can do for your future self, is to understand your credit score before you even have one. The second you turn 18, you’re going to have a bunch of new responsibilities including monitoring your credit score. It’s important that before you turn into a legal adult, you understand how your credit score works. Check out this guide to credit scores.

avoid fomo

Social media has completely taken over the entire world and causes a ton of people to spend money they don’t actually have on things they don’t actually need. Seeing your friends (and people you don’t even know) having products you don’t have and going places you didn’t go can cause a serious case of FOMO (fear of missing out) and cause you to think you need to spend money too. Try your best to avoid this at all costs, or else you’ll regret it. I promise.

start early, time is a magical thing

There is this magical thing called compound interest. It’s something that you really only benefit from if you start saving money early and plan for your future at a young age. The earlier you start saving money, the more money you’ll have by the time you graduate. Read this awesome guide to compound interest from Investopedia!

use your student ID to save

Did you know that your high school and college student ID can save you money at SO MANY PLACES? Well, I miss being a student for this reason alone. A lot of restaurants will have student options. I know in my city our biggest grocery chain has 10% off Tuesdays for students. There are so many ways you can save money by just being a student, so be sure to take advantage of that as much as you can before it’s over.

try your best to graduate without debt

Being able to graduate debt free is one of the greatest things you can do for your future finances. Start saving for college as soon as possible, buy used textbooks to save money, go to a college that’s closer to home so you can save on out of state fees and paying for a dorm, etc. There are so many tips for graduating debt free, check out this article we wrote that outlines a few of our favourites.

an image of a young woman on a dark red background holding a piggy bank from a blog post on NOt quite an Adult about budgeting for teens

How to Teach Your Teen About Budgeting

One of the best things a parent can do for their child is spend some time to teach them about money while they’re still developing. It’s something I wish I had more of as a teen. One of your biggest roles is to make sure that your teen can be a successful adult and handling their money is a giant part of this.


The first tip I have for teaching budgeting for teens to your child is to not just show them, but actually teach them how to make a budget for themselves. I highly suggest you use the Zero-Based Budgeting method when teaching them how to budget because it’s straight-forward and leaves little room for confusion.

A key to doing this is making sure you aren’t just creating their budget for them but actually letting them create it and give input of their own. You want them to be able to handle their money on their own some day, so unless you want them running back to you at every sign of negativity you must make sure that they know what they are doing.

You can 100% make changes to their budget if you feel like they’re making a mistake, but be sure to explain to them the change and why you’re doing it.


My second tip for teaching your child about budgeting for teens is to make sure they understand the importance of long-term savings and sinking funds. Understanding sinking funds was one of the absolute best things I’ve ever done for my finances and it’s helped me to save TONS of money for things that are important to me.

Chances are your teenage wants to save their money to buy their first car, like most teenagers do. Teaching them about sinking funds can be an awesome way for them to start saving for their first car. You’ll discuss how much money they need to save each and every month to get that car by their desired time.

3. Teach them about credit scores

A credit score is a number that will impact your teen’s life forever starting the second they turn 18, except most people I know in their 20s don’t even understand how their credit score works.

This number is going to impact their ability to get a car loan, a mortgage, and even an apartment, so understanding the value of a credit score is a must for any young person. You don’t want your teenager to do something crazy in their early 20s that will hurt their credit until they’re almost 30.

I highly suggest you read this guide to credit scores before talking to your teen about credit scores.

4. teach them how to properly use credit cards

Although teenagers can’t actually get a credit card, it’s important that they understand how to use them BEFORE they ever get one of their own. You should teach them about interest rates, minimum payments, and all the other nonsense that comes along with having a credit card.

You can read this guide to using credit cards intelligently before you talk to your teen about credit cards.

5. help them out… sometimes

If you see some great progress in your teens budgeting journey, help them out. Chances are they are going to take a long time to save up for those big ticket items that they desperately want, so don’t hesitate to make a deal with them to pay for a portion of these items but ONLY if you see them working hard towards their goals.

Final Thoughts

Budgeting for teens is a really important part of growing up and is a super necessary thing to learn before you’re thrown into the real world. I hope this guide helped you figure out how to start budgeting for teens or taught you how to teach your teen about budgeting.

Thanks for reading!