Financial Freedom: Teen Spending Plan

  

A spending plan is really just another name for budgeting. It lets you focus on how to spend your money. Writing down how you spend your money can really be eye-opening.

Step 1: Who Pays                               ?

Talk with your parents and figure out who pays for what. Some families compromise on expenses like clothes, cell phone bills and gas. Your parents may agree to provide a specified amount per month. Anything over that will be your responsibility. Or maybe you’ll decide on percentage amounts (i.e. teen pays for 10% of gas/fuel, parents pay the rest). Use this worksheet to write it all down. 

Teen & Parent Spending Worksheet

Expenses	Parent	Teen
Clothes
Entertainment (movies, music, books, etc. )
School lunch
Gas
Car Insurance
School supplies
Bus fare
Cell phone

Step                                               2: Track Your Spending

Don’t guess how much money you are spending on things.  For a couple of weeks, save all of your receipts and keep a daily record of everything you buy to get an idea of where your money is going. If you are spending more than your weekly “budgeted spending allowance”, you’ll need to start cutting back on what you’re buying.  Use the chart below to track your weekly expenses.

Daily Personal Spending Record

Week 1	Weekly Budgeted Amount to Spend  N____________
	Total Daily Money Spent
Sunday	N
Monday	N
Tuesday	N
Wednesday	N
Thursday	N
Friday	N
Saturday	N
Weekly Total:	N                       = Total spent for the week
	Budgeted amount – Total money spent for the week
What’s Left	N
Week  2	Weekly Budgeted Amount to Spend  N____________
	Total Daily Money Spent
Sunday	N
Monday	N
Tuesday	N
Wednesday	N
Thursday	N
Friday	N
Saturday	N
Weekly Total	N                       = Total spent for the week
	Budgeted amount – Total money spent for the week
What’s Left	N

Step                                               3: How Much Do You Need?

Now that you know how much money you have, and where you are spending it, you can figure           out how much income you really need to buy the things you want and pay for your expenses. The chart below includes a line for “Charity”. Many adults support organizations that have meaning to them. You should to. Find a non-profit that you believe in. Then commit to donating 1% of your income each year.  If you earn N100/month, a 1% gift would equal N120 for the year.

Teen Weekly Personal Spending Plan  ------ How much do you need each week?

Weekly Income             N________.____

Subtract Savings    - N________.____ 

Subtract Charity    - N________.____  

Equals Discretionary =      N________.____    (What you have left to spend)

Step                                               4: Set Spending Goals

It’s human nature to want stuff.  Maybe you want some new clothes or something a bit bigger, like your own car.  Learning to set goals will help you afford the things you want.

Goal Timelines

Short-term:   Save N40 by the 1^st of next month for new shoes.

Intermediate: Save N10 per week for 25 weeks for a prom outfit.

Long-term:  Save N2,000 for the next four years for a down payment on a new car.

Setting Goals

Goals are much easier to achieve if they are “SMART”.                                                  They should be: Specific, Measureable, Attainable, Realistic, and have a Timeline. 

Specific Goal	Achievement Date	Timeline Short-term, intermediate,     long-term	Estimated Cost	Amount to save each week
Ex: “I want to buy a new bike. ”	June 1st	Intermediate	N125 .00	N5.00

Congratulations! 

By following these guidelines, you have taken the first step to managing money!