Dear Gospel Light Youth Department:

Our topic is on Budgeting and Finance.

Earning money, whether it’s from an after-school job or an

allowance from chores can give teenagers a sense of independence

and maturity.  While you may be eager to buy things, it’s important

to learn money management lessons early. Concepts like budgeting

and saving are likely to last long into adulthood.  You may not

have a full-time job or a mortgage. But basic budgeting skills

can help plan spending and set you up for long-term success

handling money.

 

Here are five steps to get you started.

1.  Determine your income

    The first step in building a budget is figuring out how much

money comes in. For tweens and teens that means regular

income, such as paychecks from jobs and allowances, as well as

money given to them on birthdays or holidays. Add up what

you receives in a month—that’s your total monthly income.

2.   Calculate required expenses

    Required expenses are necessary costs you must pay regularly—they’re

the    must-haves. For a middle or high schooler this could be a monthly

cell phone bill, or gas and car insurance if you drive. Total these costs

over a     month to determine a baseline set of expenses.

3.   Do a little math

     Once you have a total for the required expenses, subtract that

number from your income. This reveals whether you have enough

to cover your      necessities, as well as how much money is left over.

4.   Now for the fun stuff

     Once you’ve covered necessary expenditures, what’s left can go into

your    savings account. You also could use extra funds for discretionary

purchases such as going to the movies or buying concert tickets—the

nice-to-haves. But remember that money is finite, and sometimes that

means making trade-offs.  For example, buying an expensive piece of

clothing now may mean postponing a bigger purchase.

5.   Balance the budget

     Your spending should not exceed your income. If you overspend,

look for ways to cut back spending or increase income. For example,

you may decide to  carpool one month to save on gas and use the

extra funds to buy a concert ticket. Teens can boost income by

taking on extra jobs, perhaps mowing a neighbor’s lawn or babysitting.