Creating a Budget for Teens: How to get started

Mar 14, 2023

Imagine this…

Your teen is about to graduate high school. They already have their own savings account filled with money they’ve earned, and a plan for how to use it. You have no worries about them going off into the world and being smart with their finances.

Even at the young age of eighteen, they're well on their way to complete financial independence.

As teens grow into adulthood, it's important to establish a healthy relationship with money. Creating a budget is an excellent place for any teen to start.

Having a budget will familiarize your child with their income and expenses. Having a good grasp on these concepts means they’ll feel confident saving money for the future, and they’ll be building good habits.

This guide will explain how to get started when creating a budget for teens, as well as provide a solution that helps them stay consistent.

Why do teens need a budget?

69% of Americans have less than $1,000 in their savings accounts, and 34% have no savings at all.

This is often attributed to the lack of financial education found in public schools in addition to our country's consumer-based culture. Both of these factors have their merit and can be argued until we’re all blue in the face.

The real question is - how can we fix it?

The answer is - financial education has to start at home with parents.

Children can start building a solid foundation as early as 8 years old with the financial literacy app called GravyStack. Doing this from such a young age significantly increases the chances that they will develop savvy money management skills, rather than only learning about it when they are in their teenage years and starting their first job.

Until this point in their lives, teenagers have likely been receiving an allowance or getting paid to help out around the house. A first job (and the paycheck that comes with it) is the beginning of their relationship with regular income, taxes, and the need to budget wisely in order to make that money last through their next paycheck.

Unfortunately, when teenagers get their first job they tend to spend their paychecks quickly and impulsively.

And who can blame them?

This is an exciting time in their lives! It’s the first time they have money coming in consistently, and first paychecks feel like a major milestone of becoming an independent adult!

While exciting, this can also cause problems…

As a teen your financial responsibilities and monthly bills are very low, sometimes It’s only the cost of gas to and from work. This creates an unrealistic and even unhealthy way of viewing money.

We hear stories all the time about teens managing their money poorly. For example, one of our team members told us about the time when they got their first job at 16. They spent their first few checks on $300 headphones even though they were only making $7.25 an hour!

Living as an adult with bills, you would never spend nearly 100% of your monthly income on a single purchase, let alone a pair of headphones!

Can you relate? Most people have a few financial decisions in their early years that aren't the smartest.

The point is, teenagers in general do not know how to budget, and the concept of money coming in on a consistent basis is new to them.

Allowing your child to begin their time in the job force with an unhealthy relationship with money builds habits that carry on into adulthood, and can make getting started as an independent adult much more difficult.

Building out a budget with your teen lets them know how much they have to spend (spoiler alert - It’s not ALL the money in their bank account), how much they should save, and will be the building block for a bright financial future. 

Female reading receipt

Budgeting for teens - How to get started.

Getting your teen to think about money in a beneficial way is easy to get started, but takes time and consistency to build lasting habits. As parents, we want to empower children to make their own financial decisions. At the same time, it’s also imperative to provide guidance and support.

This can be a difficult balancing act, but GravyStack is here to help. Below we will outline the first steps for getting your teen to put a budget together.

Establishing income

This is the money that your teen brings in, whether it be from an after school job, a side gig, or birthday/holiday gifts. Knowing how much they bring in each month will start putting in perspective how much their time, effort, and money is worth. Take the time to sit down with your child and find out what this number is.

Establishing income is what allows teens to begin to conceptualize how much they should expect each month and is the foundation on which to build their budget.

Listing expenses

Expenses include gas, food, entertainment, and any other monthly bills. Laying out monthly expenses will help your teen better understand what is important to them, and better inform their decisions on where they want their money to go.

Some expenses are fixed, meaning they will be predictably the same every month (such as a Netflix subscription). Some expenses are variable, meaning they change month to month (such as gas).

This is important to explain to your teen so they know to plan ahead for variable expenses, or expenses that only pop up once a year.

Saving money

Saving money is one of the most important (and difficult) aspects of financial literacy for teens to execute on a consistent basis. It is easy for both teens and adults to neglect building their savings accounts and overspend. We recommend helping your teen set up their GravyStack Money Machine™ so that the right amount of savings are taken out of their income before it can even be touched.

This removes the decision-making and will power it takes to save consistently. After a few months your teen will have the satisfaction of looking in their account and seeing how much their account has grown! Making the purchase of a new car or books for college go from stressful to rewarding.

What makes a budget successful?

Staying Consistent

The number one killer of budgets is the lack of consistency. Checking in and having discussions with your teen about finances on a regular basis will help them stay with their set budget. Providing tools that support their decisions - rather than sabotage them - is also a great way to support their healthy financial habits.

Setting Goals

Setting both quick and big goals will not only teach your teen financial literacy but also the importance of delayed gratification.

Learning from Mistakes

The most important part of budgeting is learning from our mistakes. Allowing your teen a safe way to make those mistakes early without destroying their entire financial future shows your teen that it’s ok to make a mistake, how to learn from it, and how to use it as an opportunity to become more knowledgeable and skillful with their finances moving forward.

Grandfather & Grandson

What is the best way to teach teens and kids about money?


What is GravyStack? It’s an all-in-one financial literacy app that puts FUN first, and is perfect for the whole family.

GravyStack was built by committed parents for committed parents, and makes learning about finance, saving, and budgeting a blast!

Not only will your teen have fun setting aside money for quick and big goals, selecting charities they want to share with, and learning how to spend wisely, but they will also get the opportunity to learn about more complex financial concepts such as debt and investing.

At GravyStack we believe there’s no such thing as “too early” or “too late” to begin crafting a solid financial future, which is why our app uses an all-inclusive roadmap to help your kids as young as 8 and as old as 18 to make and manage money.

So give your teen the best chance at success and start them on the path to financial literacy today! Download GravyStack now and let us help kickstart your family’s financial journey.

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