As a teenager, you are in a very powerful position. Starting good money habits now will put you ahead for the rest of your life.
Money saving and budgeting techniques
50/20/30 budget – 50% of your income should be spent on basic needs, 20% should go towards paying your debts and contributing to your savings, and 30% should be spent on anything else you want.
Save the hundreds and spend the tens – with every paycheque you receive, place the hundred into a savings account and keep the tens to spend. For example, if you make $457.37 you should desposit $400 into your savings and keep the $57.37 as your spending money.
Cash only spending – also referred to as Envelope Budgeting, suggests creating envelopes for your expenses (groceries, beauty appointments, takeout, etc.) and placing the amount of cash you are willing to spend on those expenses in each envelope. Once the money in the envelope runs out you are done spending money on that expense for the month (or whatever time frame you set).
Calculate money spent by hours worked – in order to justify a non necessity purchase, think of how many hours you need to work in order to make the money to buy the item/service. If you want to buy something that is $100, how many hours would you need to work at your job to pay for it? If you make $14/hour, you would need to work at least 7.5 hours.
Learn more at moneymatters.com
Helpful links to increase your financial literacy
- Financial Literacy Programs Educational materials to help students increase their financial knowledge and skills.
- Lifestyle Reality Check
- Money and Youth
The Conquer Cashalot Game
What happens if you invest $240 a month from the time you’re 16?
- Learn more about how your money can work for you in this article in the Globe & Mail.
