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Teen Spending Tips

June 11, 2019 • Adulting

Getting your first paycheck is exhilarating - you're finally old enough to have a job and the money in your hands is hard-earned cash. What a feeling!

So now what? How do you do this whole "money" thing wisely?

First and foremost, your money should always fuel what you're most passionate about - both long-term and short-term. You are the boss of your money - give it a job to do that works for YOU!

Create a spending plan

Calculate your monthly income (including if you get an allowance). Next, subtract your expenses. Do you pay for your own gas or buy your own school lunches? Make sure you subtract an entire months' worth of these from your total income.

If you want an easy way to keep track of your income and expenses, consider using our free budgeting tool, Track Every $, in our mobile banking app.

Set goals for yourself

Short-term: what do you want to spend money on most? Going to coffee or dinner with friends? Buying a cool new outfit or video game? Allow yourself 10% of your paycheck to have fun or put towards something you can afford in the next month or so.

Long-term: are you thinking about college? Maybe you want to study abroad? Start putting aside 10% of your paycheck into a different savings account or envelope (if cash) to start building your way towards your goal.

Check your balance every day

Whether you're using cash only or a debit card, make sure you get an idea of how much money you have in your account or wallet every day. This will help hold you accountable so you don't overspend.

Try using cash-only! A Psychology Today article summarizes that people spend less money when paying with cash than they do paying with a card.

Resist the urge to spontaneously spend

Remind yourself how many hours and how much work went into the money you're about to spend. Is all that hard work worth what you're about to spend your money on? If not, it might be a good idea to rethink the purchase.

If this is something you struggle with, budget for it! Set aside 10% of your paycheck for spontaneity!

Shop with your parents

We all know your eyes are rolling right now - but trust us, this will shed new light on things!

You'll notice how different brands of the same product are entirely different in price, how buying in bulk can be more beneficial for certain items, and how to achieve a balance between healthy/fresh foods and more "fun" foods that are cheaper.

Then at the end, see how much that shopping trip cost. Was it more or less than you expected?

Save for a rainy day

Rain happens - something comes up at school and you need to buy extra supplies or you want to help out your parents during a tight month.

Put 10% of your paycheck into a rainy day fund for these unexpected occasions.

Breaking down the budget

So now you have all these different items to consider, but how do you put it all together?

Let's say you make $400/month at your job and through allowances. Here's an example of what your monthly budget could look like:

  • Gas: $70/month
  • School lunches: $70/month
  • Short-term savings: $40 (10% of income)
  • Long-term savings: $40 (10% of income)
  • Rainy day: $40 (10% of income)
  • Spending money: $140

Now it's your turn to figure out what works for you! Download this free teen budgeting worksheet by Frugal Fanatic or log into our Online Banking to set up your budget in Track Every $. You've got this!

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