Teenagers these days face many problems in managingtheir finances. Teaching them to budget their finances can be very beneficial for them in future. It will help them to avoid over- spending their money and also build a habit of tracking their spending. Just like Science, Geography, History and various subjects they study in school, management of their finances is also a very important subject which they should master. So, here are 5 easy ways for teenagers to budget their finances.
RECOGNISE YOUR INCOME
Recognising your money is the first and most important step in managing them. Add up every rupee you have been granted, including your allowance for home chores or any earnings from part-time jobs. Use that amount as a benchmark for your spending and saving.
The next step is to create budget categories. There should be two major categories including savings and spending. Under these, make the list of necessary expenses and sources of savings. By doing this, you will have a clear vision of when and where the money is spent.
CHOOSE A STRATEGY
Now that you have list of your savings and expenses, it is very important to choose a budgeting strategy. Always choose a strategy that is comfortable for you. Try to do some research to find the budgeting strategy which suits you. Some of the effective budgeting strategies are “pay yourself first” method, zero based budgeting, 50/30/20 rule and many more.
Setting target is very effective for your budgeting strategy to work well. It will motivate you in sticking to your budget. Set a goal for every expenditure like buying books, going on a trip with friends or any other expenses. With all the planning, you will surely achieve all your targets and improve your saving and spending habits.
TRACK YOUR HABITS
It is a very helpful tip if you want your budgeting strategy to be effective. Monitor and reflect upon your weekly spending. By monitoring your expenses, try to find more ways to save money. Swap to healthy lifestyle and spend on important things only. Doing this will be proved beneficial for you in the long run.