As your child learns to be more independent, you might find that it’s time to have a serious chat about budgeting. Talk to them about how you budget and if they have a job, look at their expenses compared to what they earn.
By helping them set a budget, you’re instilling good money management habits and helping them work towards financial independence.
06 March 2021
Things you need
- Internet access
- Your teenager’s bank account statement or a list of expenses
- Spreadsheet program (optional)
Use the Money Smart’s budgeting tips to develop a monthly budget for your teen. It should include their income and expenses. Try to think of all of the ways they spend money, for example phone bill, lunches, school equipment, clothes, gym membership, games, cosmetics and gifts or donations.
When discussing how to manage money with your teenager, make sure you cover the essentials:
- "Are there expenses that you pay some months and not others? How will you account for this?"
- "How will your expenses grow as you get older?"
- "Are there any areas that you thought your expenses would be higher or lower?"
- "Is your budget realistic?"
Ask your teen to review their budget after a month. Did they find it hard to stick to? Did they overspend in any areas? Were there any unexpected expenses?
The ability to budget is an essential skill for everyone to learn. Some professions such as finance managers, project managers, accountants, treasurers and payroll officers make it their full-time job to work with money.