Six months ago, I decided to start giving my teenagers a budget.
I will admit – I failed at teaching them how important a budget is at a young age.
I literally should have been writing about doing this 10 years ago. But I didn’t, so here we are: giving my teenagers a budget way later than I like admitting.
After the initial shock wore off and they stopped thinking we were “poor“, they’ve settled into the budget routine quite well.
I’m going to share with you my thoughts on starting a budget with your teens later in life than I should have, what the rules for the budget are (that I randomly made up), and how it’s going six months after we started.
How It Went Before The Budget
Although I never lacked for clothing, food, or shelter as a child, I never had the best of anything. I can’t ever really remember going shopping with my parents and being able to grab something and ask “can I have this?”. We just didn’t do that.
I remember getting a job at sixteen and that ended my parents being involved in paying for anything.
I 100% financed my first car with zero down payment (not a smart move) and made the monthly payments. My gas, clothing, and anything else I needed were purchased on my own from the moment I could drive.
I will say that I still did receive Christmas and birthday presents until the age of eighteen.
When my kids were born, they never went without. I wanted for them all the things I didn’t have growing up. Materialistic or not.
I actually cannot count the wasted dollars spent on name brand something.
Spoiler: They still do purchase name brands on some items.
Yes, there have been many times when I’ve said “no” when they ask for something at the store. There have also been many times when I’ve said “yes”.
So now that my kids are teenagers, their wants are a lot more. They want makeup, a ridiculous amount of clothes, Stanley cups (which I have yet to cave in and purchase), Starbucks, and after school fast food.
It started adding up fast when the oldest was old enough to drive.
I knew I had to do something the week they spent more going out than I did on groceries. I was done.
My Teenagers Budget Plan
I decided to give my kids a budget every month. An equal amount although one is older than the other and earns her own money. I decided $200 a month was what they would each receive for anything they wanted to spend it on.
Note that I absolutely do not think $200 is right for everyone. I actually thought it was low based upon the dollars I’ve spent in the last year. However, it’s easier to go up later than go down. I hope my kids don’t read this.
Their initial knee-jerk reaction to this was “do we not have money?”. They started to worry about my financial state. I have to say, it was nice to see their legit concern for our family finances.
However, it was a kick in the gut because I was definitely making more money than I ever had been in my life. I’m also wiser than I’ve ever been.
The fact that they thought a budget meant we were poor, told me that I failed to teach them the importance of a budget earlier in life.
So I carefully told them that I had money. But I also have priorities. I also don’t want them to text me everytime they feel like making a run to Chick-Fil-A.
I wanted them to have $200 per month that they can spend however they want to spend it. That’s $50 per week. They were very hesitant.
The thing is, I had already looked at what I spent on them in the past year and $200 a month was a deal for me.
The First Month of The Teenager Budget
My fifteen year old texted me on the 3rd and said she wanted to buy a dress for $60 from an online store. She said she had been thinking about it and really wanted it, but it was more than the $50 per week she received.
I explained that it’s a monthly strict budget of $200, not a weekly budget of $50. I only care that it equals less than $200 on the last day of the month.
So if she wants the $60 dress and she’s willing to exceed the weekly average on the third day of the month by $10, that’s fine. However, she has to remember that she’ll have to make up for it by spending less the following weeks.
She did buy the dress and I didn’t question it. She made it the entire rest of the month without going over $200. Success!
My older daughter spent significantly less than $200. When I asked her why, she replied that she thought she was close to the $200.
I calculated it and she ended the month at $130. (I do pay for her gas, as she helps me with her sister.)
She said it was very difficult keeping track of what she was spending.
Wow – what a great lesson this is! I told her that I’m glad she stayed under instead of going over. However, by not taking the little bit of time entering in or keeping her receipts, she had lost $70 of free money.
Is it worth keeping track of your money to gain an extra $70? I would say so.
The Rules
So let’s recap the rules:
$200 Per Month Teenager Budget, Per Kid
Kid Instructions:
- Basically $50 per week, but I only care that you spent $200 or less per month.
- Any unused money on the last day of the month does not carry over to the next month. It’s gone. (Full disclosure: Debating on changing this and allowing $100 to roll over if unused so they can save up for higher dollar purchases)
- Yes, you still get the budget dollars during Christmas (December) and your birthday month.
- It is your responsibility to tally up the money spent each month. Please don’t ask me.
What Value This is Teaching Them
I should have done this years ago. Epic failure on my part.
I do educate my kids on money. We’ve had discussions about paying for college, interest rates, debt, mortgages…
Why was I missing teaching them one of the most basic principles?
I can say all the right things all day long.
- Spend less than you earn
- Save for emergencies
- Compound interest is a magical thing – Start young
- Negotiate
- Wealth isn’t solely about money
Yeah, I’ve said all of those things plus a whole lot more in detail.
They listen. They actually soak up what I say. But why am I not teaching them some fundamentals that they can actually experience and improve on now?
Also, my kids are teenagers so I don’t have to babysit their budget. I am expecting them to do it on their own now so that when they are on their own, they aren’t lost.
Side note you may be thinking: Why don’t I give them cash so they can tell what they’ve spent? First, I don’t like going to the bank to get cash. Second, I want to see where they money is going. Third, I want them to learn to keep a log of their spending habits and analyze them. With all of that being said, they have cards I have given them to use.
After Six Months
So after six months, nothing has changed with the amount of the budget. I did not need to adjust it up.
This makes my family budget look so much better. It was literally the missing piece.
Sometimes they don’t spend close to the $200. I don’t expect them to buy groceries or supplies needed for school.
I expect them to buy wants that I would have had to manually say yes or no to. Do you know how much headache this has saved me?
Plus, I am absolutely never the bad guy anymore. They know their budget and if they want something that is expensive, they have to decide if it’s worth taking away majority of the month’s money.
It may be that they can’t go out to eat after school. Perhaps they can’t get those new eyelashes that are all over TikTok.
Final Thoughts On Giving My Teenagers a Budget
Shame on me for not starting something like this sooner. I have a little time left and I plan to make the most of it.
I get that we are all in different places in our lives with our kids and this may not be the solution for you.
Maybe your kids spend way less than mine. This was the perfect solution for my situation and it may not be your solution.
Perhaps you want to work up chores that they do for spending money. I did that when they were younger and it worked well. Maybe my plan will evolve to $250 per month and whatever they have leftover at the end, I’ll automatically invest. Maybe I’ll make them invest 15% off the top. Who knows where this is going. The thing is – I’m doing what is working for me and it’s been a game changer.
I’m continuing the budget while they are in college, because I do want to be able to help them for a few years while they are continuing their education.
This was so incredibly simple and it’s saving me a lot of headaches.
It’s also helping my own budget immensely by eliminating any “surprises” that come from my teenagers.
Additional Resources:
Greenlight – A guide to budgeting for kids
Adobe – Tips to teach budgeting for kids
Etsy – Budgeting Planner for Teens
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