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- KEY TAKEAWAYS
The first step in building a budget is figuring out how much money comes in. For tweens and teens that means regular income, such as paychecks from jobs and allowances, as well as money given to them on birthdays or holidays. Have your child add up what he receives in a month—that’s his total monthly income.
Required expenses are necessary costs you must pay regularly—they’re the must-haves. For a middle or high schooler this could be a monthly cell phone bill; gas and insurance for drivers. Total these costs over a month to determine a baseline set of expenses.
Once you’ve covered necessary expenditures, explain that what’s left can go into your teen or tween’s savings account. She also could use extra funds for discretionary purchases such as going to the movies or buying concert tickets—the nice-to-haves. But remind her that money is finite, and sometimes that means making tradeoffs. For example, explain that buying an expensive piece of clothing now may mean postponing a bigger purchase.
Tweens and teens may not be able to afford some big-ticket items right away, for example a bicycle or even a car. In this case you can help your child set a savings goal and then plan how to achieve it.
You can teach your child his spending should not exceed his income. If your tween or teen overspends, you can help him look for ways to cut back, or to increase income. For example, a teen may decide to carpool one month to save on gas and use the extra funds to buy a concert ticket. Teens can boost income by taking on extra jobs, perhaps mowing a neighbor’s lawn or babysitting.
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