Budgeting for teens: 18 tips for growing your money young

Edited by: Brad Hanson
• Updated •8 min read
This date may not reflect recent changes in individual terms.
A parent and teenage child sit side by side at a table with a laptop, notebook and markers in front of them.Image: A parent and teenage child sit side by side at a table with a laptop, notebook and markers in front of them.

In a Nutshell

Budgeting for teens is a valuable skill that can set the foundation for financial success later in life. It includes tracking income and expenses, setting savings goals and making wise spending decisions. Seeking guidance from parents or mentors and taking advantage of educational resources can help teens build a strong budgeting foundation and make informed financial decisions.
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Some of the most crucial life skills don’t always get taught in school. Budgeting is a real-life skill you can practice daily to set yourself up for financial success. Check out these 18 tips on budgeting for teens to start growing your money young.

Feel free to jump to the infographic for inspiration from money-minded teens and ideas for budget-friendly lifestyle swaps.

A stacked infographic titled "Young millionaires with big money ideas" highlights several people with a short bio about them next to an illustration that connects to their careers. JoJo Siwa is a 20-year-old singer, dancer, actress and social media personality who has established herself as a multimedia mogul. Ben Pasternak is a 23-year-old app entrepreneur and youngest person to receive venture capital funds in tech at age 15. Rachel Zietz is a 23-year-old CEO of a lacrosse equipment company who made her first $1 million when she was 15 years old. Moziah Bridges is a 21-year-old bow tie designer and entrepreneur who landed a lucrative contract with the NBA at 15 years old.
  1. Know your income
  2. Create budget categories
  3. Pick a budgeting strategy
  4. Save first, spend later
  5. Set goals
  6. Track your habits
  7. Adjust your budget 
  8. Open a savings account
  9. Learn from your mistakes
  10. Earn more with a side job
  11. Be a spending minimalist
  12. Don’t give in to peer pressure
  13. Seek out help
  14. Make budgeting fun
  15. Follow money-minded influencers
  16. Learn credit card best practices
  17. Understand how credit scores work
  18. Check out teen budgeting resources

1. Know your income

The first step to budgeting is knowing how much money you make. Whether you have an income from a part-time job or a monthly allowance for helping around the house, you should total up the money you make each month. Whatever that number is, use it as a guide for how to save money and spend it. If that total varies monthly, stick to the smaller amount.

2. Create budget categories

The next tip is to create your budget categories. When creating categories, consider two main ones: saving and spending. Under these two categories, list the expenses you’ll be putting your money toward. You can see an example of teen budget categories below.

For your savings categories, you might include …

  • Savings account
  • College savings plan or fund
  • Short- and long-term purchases (e.g., a car or laptop)

And you might use spending categories, like …

  • Necessary expenses (gas money, phone bill, lunch money)
  • Other expenses (gym membership, clothes, entertainment, subscription services, other food or treats)

You likely don’t have to worry about paying for housing or utilities, so don’t include those if someone takes care of them. If you contribute to those, though, feel free to include them as necessary spending expenses.

3. Pick a budgeting strategy

Once you have a list of all your categories, it’s time to figure out how much money to use for each one. You can do this using a variety of budgeting methods. Learn more about a few strategies below and choose the one that works best for you.

  • Pay yourself first — Paying yourself first means that you immediately put a certain amount or percentage of your income into savings. Whatever money is left over can be spent however you choose.
  • Zero-based budgeting — Want to account for every dollar in your budget? This method operates on the idea that when you subtract your expenses from your income, the result is zero. Estimate the cost of each budget category and divvy up your income until you hit zero, using those estimates as a guide.
  • 50/30/20 rule — This rule budgets your money based on the following percentages: 50% for necessary expenses, 30% for other expenses and 20% for savings. You can alter these percentages to fit your needs, and if you don’t have many expenses, you may want to contribute more toward savings.

4. Save first, spend later

Now that you’ve decided on a teen budget strategy, it’s smart to always contribute to savings before spending. If you start spending before you save, there’s a chance you might blow your budget one month and not have anything left over to save. By prioritizing saving, you practice discipline with your money and make it easier to stick to the budget you planned in the first place.

5. Set goals

Having goals for your money is a great way to motivate yourself to stick to your budget. Maybe you’re saving up for a car or a trip with friends. Whatever your goals are, if you maintain your budget and keep up good saving and spending habits, you’ll be able to make steady progress to achieve them.

Of course, delayed gratification can be tough, but getting excited about a dream purchase can make working toward your goals easier.

6. Track your habits

Another helpful budgeting tip is to start tracking your spending habits. Use a printable habit tracker to monitor and reflect on your weekly spending. By tracking your habits, you can figure out if you can make realistic lifestyle swaps to save more.

For example, if you buy iced coffee multiple times a week, try a more budget-friendly alternative, like making it at home and putting it in a to-go cup. A simple modification to a regular habit may free up a sizable chunk of change in your budget.

teenager-budget-money-habitsImage: teenager-budget-money-habits

7. Adjust your budget

If your budget isn’t working for you, know that you can change it to fit your needs. For example, if you’re consistently overspending on something necessary like gas, adjust your budget to fit that need better. On the other hand, if you’ve stopped driving as much, allocate your gas funds somewhere else, like toward a savings account.

If you’re overspending on something that’s more of a want, like clothes or entertainment, figure out ways to curb your spending. An alternative to this is to think about reworking other nonessential expense categories to free up more funds. Once you have the availability in your budget, you can feel guilt-free about spending on what makes you happy.

8. Open a savings account

As you discuss saving money and delayed gratification, consider opening a savings account. You can even bring up the possibility of opening up a high-yield savings account, which earns a higher interest rate on deposits than a traditional savings account. This can be a great motivator to save and a real-life example of how delayed gratification can lead to even more savings.

9. Learn from your mistakes

Mistakes happen, but what’s important is what you learn from them. Did you fall short of your savings goal and now have to skip a fun activity or settle for a cheaper alternative? Reflect on why that happened, and think about how to improve next time. Good spending and saving habits come with practice, so remember to use the feeling of not meeting your goal as motivation to do better next time.

10. Earn more with a side job

If you’d prefer more wiggle room with your budget, consider increasing your income with a side job. Luckily, there are many ways for teens to make money at home. Try putting your interests or talents to work with these ideas.

  • Start a podcast
  • Pet sit or walk dogs
  • Sell baked goods
  • Tutor others in a skill or subject

11. Be a spending minimalist

Some people might think the long-term benefits of saving and investing all your money outweigh the pleasure of owning items you want. But what if you could have the best of both worlds — quality items you enjoy and money to put aside for your future? To strike this balance, consider taking on a minimalist lifestyle and mindset.

  • Try a capsule wardrobe where you invest in a small number of high-quality and versatile pieces.
  • Give life to old items by saving money and shopping secondhand.
  • Find ways to repurpose and appreciate what you already have.

12. Don’t give in to peer pressure

Life as a teen comes with many pressures. Whether keeping up with current fashion trends or grabbing a bite to eat with friends, you may feel tempted to overspend. Don’t feel bad about not having the latest accessories or asking your friends to hang out at the park instead of dining out. True friends are happy to hang out with you regardless of what you’re wearing or where you are.

13. Seek out help

When it comes to budgeting as a teen, remember to ask for help if needed. You’re still learning about many different parts of life, and it’s all right not to have all the answers. If you have questions, get advice from your parents or financial role models. Do your research and read books by financial experts or listen to podcasts online to dive into more complicated topics like investing.

14. Make budgeting fun

Technology and social media are other resources that make budgeting fun and easy. Gen Zers find social media influencers more helpful than school or books for learning financial concepts.

Read on for more advice from your favorite social media stars on budgeting for teens.

15. Follow money-minded influencers

A great way to level up your money mindset is through social media. Watch these TikTok stars break down financial concepts and offer tips in short video snippets.

An infographic featuring budgeting advice from money-minded TikTok stars. The following quotes appear one above the other in light green talk bubbles. "Pay yourself first and track your spending" - Humphrey Yang "Be polite and negotiate everything" - Tori Dunlap "Building an emergency fund should be a priority" - Ellyce Fullmore

Humphrey Yang

Handle: @humphreytalks | 3.3M followers

Humphrey Yang is a former financial advisor turned entrepreneur and social media star. He shares personal finance and entrepreneurship tips with his 3.3 million TikTok followers and 1.1 million YouTube subscribers. Check him out for tips on credit cards, passive income and easy investing strategies.

Tori Dunlap

Handle: @herfirst100k | 2.4M followers

Tori Dunlap’s videos focus on helping others grow their money. As her handle suggests, she encourages others to save and reach the goal of their first $100,000 in savings. Tori also advocates for fair salaries for women and offers salary negotiation tips in a firm but professional manner.

Steve Financial Freedom Coach

Handle: @calltoleap | 1.1M followers

As a former public schoolteacher who worked hard for financial freedom, Steve posts personal finance videos on TikTok playing out different money scenarios to help empower others in those same situations. Watch Steve for his credit card hacks and passive income ideas.

Ellyce Fulmore

Handle: @queerd.co | 532.6K followers

As a self-proclaimed “money coach,” Ellyce Fulmore offers personal finance tips aimed at a millennial and Gen Z audience. She keeps things fun by lip-syncing and dancing to popular music while explaining financial terms through text, and she regularly answers financial questions submitted by her viewers.

16. Learn credit card best practices

Whether you get a credit card tomorrow or wait until college, you should understand how they work.

A credit card can feel like “free money” to a teen who doesn’t know the basics of credit, but it can also help build good financial habits when used with the proper care and understanding.

Here are some resources to help you understand some basic facts about credit cards, including the perks of rewards programs and the potential pitfalls of carrying a high balance.

17. Understand how credit scores work

Thanks to schoolwork and tests, you’re likely familiar with people using numbers to evaluate accomplishments. While not exactly the same, grades can be a useful analogy to draw on when learning the concept of credit scores.

You may not have credit scores of your own until you start establishing a credit history at the age of 18. But you can still lay the groundwork for great credit scores by learning what factors affect a credit score, how they get calculated and how to work on credit scores over time.

18. Check out teen budgeting resources

TikTok isn’t the only place to get digestible personal finance tips and information. Check out these popular podcasts and YouTube channels to learn more.

Podcasts

YouTube

Take control of your financial future early. Learn about personal finance and practice good spending, saving and teen-budgeting habits so you can make money moves in adulthood.

What’s next: Grow your savings faster

Saving, budgeting, bank accounts, credit cards and credit scores are all pillars of financial literacy. Teenagers who understand these pillars will be better prepared to navigate debt and achieve long-term savings goals.

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