How To Budget Money As A Teenager And Save Thousands of $$!!

Remember to SUBSCRIBE and LIKE to be wealthy here -- https://rb.gy/ertgbh There are plenty of reasons to budget money as a teenager. Whether you're looking to save for your first car, college, or a gap-year trip around the world, the most important part of saving as a teen is getting started. Saving for life goals and big purchases is a great way to start to understand the value of money and work. And an even bigger benefit of learning how to save money as a teenager is that you can start building a savings habit that will last forever. So stick around till the end where I’ll show you how a teenager can properly budget their money for financial success. But before we get into that please remember to subscribe and like this video. Let us know what you think in the comments below if you disagree and have other ideas on how to budget money as a teenager. 1. Estimate Your Monthly Income The first step to budgeting is to calculate your monthly income. Add up all streams of revenue that you have and calculate a monthly average (be conservative). Use this number as a guide to how much you should spend each month. Obviously, your spending should never exceed your income and so make sure you calculations are accurate in what you estimate. The last thing you want is thinking you have more money than you actually do and spend above your means. 2. 30/30/40 Rule As a teen, the typical thing to do is to blow all of your money on trivial items or on junk food. Don’t worry, it is normal when young to not understand how hard it is to purchase those items. However, there’s a better way of budgeting your money. It’s called the 50/30/20 rule., Experts suggest that you spend 50% of your money on your needs, 30% on your wants, and 20% on your savings. This is a good rule of thumb for most people; however, it does apply a little differently to teens. Most teens don’t need to spend 50% of their money on their needs. Their parents pay for most of their expenses for them. Thus if you focus mainly on you wants and savings you will be able to more effectively save up for big trips or expenses. So in this case I would recommend you save 70% of your money and spend 30% on your wants. This will allow you to budget for future expenses that will bring more joy in your life. 3. Come Up with Spending Categories Once you have your estimates for what you should be spending on your needs, wants, and savings each month, come up with some spending categories on things that you regularly spend money on (clothes, food, gas, gifts, bills, etc.) The important thing to imagine when budgeting is that each spending category fund that you have is its own separate bank account. You never want to spend more than what is inside that account. For example, if you have $200 in your clothes fund, you shouldn’t go and spend $80 on shoes and $140 on some new pairs of jeans, because that would equal $220. The whole point of budgeting is to restrict the amount that you spend to the amount that you allocate for that category and to help you in following that budget. That $200 a month equals to $50 a week which is more easy to comprehend and follow. 4. Track All Expenses A huge part of budgeting is tracking all of your expenses. This way, you know exactly how you are spending every dollar that you have. Every time you spend money, even if it’s only $1, record it. What this will allow you to do is that at the end of the month you will be able to review what you have bought and audit yourself on what you have used and haven’t. This will make you realize the difference between what you really need and use and what you just want out of instinct, making you ask next time. Do I really need this? 5. Build Emergency Fund/Savings Account Experts suggest having at least 6 months’ worth of income in a savings account/emergency fund. This money would be used in case of emergencies such as losing your job, needing car repairs, or paying for expensive medical bills. If you made $500 a month then you should have $3000 in an emergency fund account ($500 x 6). If you’re saving 70% of your income like I suggest then you would be depositing $350 a month into savings. When you’re saving, think about having multiple imaginary savings accounts inside your savings account. All Finance Fuse videos are for entertainment/educational purposes only. Finance Fuse writers and presenters are not qualified attorneys, CPAs, insurance professionals, or financial advisors, and the information presented shall not be construed as tax, legal, insurance, financial, safety, or any other kind of professional advice. Finance Fuse may or may not own any mentioned securities or other investments. You should always seek the advice of a qualified legal and financial professional before making any financial, investment, or legal decision. We hope you enjoy our videos!