Budgeting Methods For Teen Budget

Here are a couple of ways to make a budget.
1.  Method Number One.  Guess.  It's fast and it's easy.  Unfortunately, it doesn't give you the chance to demonstrate a lot of life skills to your kids.  Those money skills are just what you want them to learn, and when they see you doing it, it's like programming a computer.  The skills you don't teach by just guessing are:  a) precise attention to the sum you pay for each and every expenditure,  b) listing expenses by category which is great for learning attention to the details that matter,  c) thinking through whether you need something or want it, compared to what you have.  We could go on.  But it's fast.     A range of families:  $ 50 a month for clothes if you shop at Walmart, Target and Kohls and but somethings new, somethings hand-me down.   $ 100 a month if you are used to buying everything new every year as your kids get larger in size.   $ 150 a month if you live in downtown big cities that don't have easy access to discount shopping (Manhattan, LA, San Francisco)
2.  Method Number Two.  Count what you have.  Inventory your kid's bedroom and dresser.  Add up how many pants, shirts, jackets, undies, dress ware, shoes - do this with your young adult.  It will take about an hour.  Then, head for Kohls, Penny's, Walmart:  shop to replace everything they own.  In one year, a 7th grader will need everything new because they are a new size.  A 12th grader may not need everything new.  Skills learned: making a list, an inventory, checking what the total is, adding up columns.  This is all good stuff.
3.  The BEST Method:  Track expenses.  Get a 3 column ledger from an office supply store.  On page one write Clothes.  For 6 months, keep every single last receipt on what you pay for any type of clothing and write those down in the ledger.  If you are in Minneapolis, you will have more winter clothes than if you are in Houston.  Consider the extraordinary clothes you may need for special occasions.  Proms, weddings, church/synagogue/temple, sports, girl/boy scouts, marching band..... keep track.  Skills learned:  paying attention to budget for 6 months, acute attention to detail, big picture focus as you add it all up.  And most of all, this way feels fair and accurate.  You might add some punch to it by guessing ahead of time and talking about how close your guess was to accurate when you were finished.  Keep your young adult invested in this process all the way through.
All Three Methods have Validity.  You have to do what works for you
Once you have decided how you are going to make this work: turn your budget into a contract.  A contract is an agreement between two parties.  The contracts on this web site are intended for you to use as templates to get started.  Highlight them, click save, and paste, open up your word processing program and you have it in hand.  Contract for Clothes.  Contract for Everything Else.

What's in a Clothing Budget ?

Clothing Item Cost of Each Number Needed Total Cost
Pants (add skirts if you have a girl) $   $
Shirts (add blouses if you have a girl) $   $
Underwear (add bras if you have a girl)* $   $
Socks $   $
Jackets $   $
Swimsuits $   $
Sweaters $   $
Gloves $   $
Winterhats $   $
Shorts $   $
Sandals $   $
Dress Clothes $   $
Boots $   $
Shoes $   $
Sandles $   $
Uniforms $   $
* Yes, girls just do cost more.     $
Once you've been through the process of developing a clothing budget, it's a lot easier going the next step:  a Global Budget.  You can see the contract we've attached, or make up your own.  It should look along the lines of the one below.  But your family is your own family and will have its own priorities.

Global Budget
Category Cost of item Number Total Cost
Sports equipment $   $
Personal toiletries $   $
Entertainment costs $   $
Transportation $   $
Holiday expenses $   $
Gifts for parties $   $
Proms and Homecomings $   $
School Supplies $   $
Hobbies $   $
Music Lessons $   $
Cell phone $   $
Photography costs $   $
Insurance $   $
Savings Plan* $   $
Charitable Giving* $   $
Other $   $
Other $   $
*You may want to place these items on top      
The devil is always in the details.  What other items DO and DONT you pay for:
Items we pay for Unit Cost Number Total cost
Car $   $
Medical Expenses $   $
Furniture $   $
Utilities $   $
Cable $   $
Computer $   $
Food at home $   $
  $   $
Items we DONT Pay for $   $
Food eaten away from home $   $
Ideas? $   $

 

 

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Contracts
The Clothing Contract
The Global Budget Contract
The Safe Driving Contract
The Contract for Car Ownership
"Capitate Your Kids... is by far the best 'kids and money' product I've come across."
FROM THE FORWARD
BY BOB POTTER
Former host of NPR's
Sound Money

 


 
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