Being a teenager comes with a lot of freedom, but it also comes with responsibilities—especially when it comes to money. Managing money isn’t something teens are usually concerned about thinking about until it’s too late. Whenever it is boredom, stress, or even peer pressure, teens spend without thinking. Social media doesn’t help either—ads are everywhere, and they are specifically designed to get your attention, making you buy unnecessary things. Many teens don’t have much knowledge about money management, which makes it harder to resist these temptations.
A significant study about teenage overspending was done in Taiwan in 2005 by Chien-Huang Lin and Hung-Ming Lin, titled “An Exploration of Taiwanese Adolescents’ Impulsive Buying Tendency” in the journal Adolescence. This research surveyed 15–19 year-olds in Taiwan and showed that teens with more pocket money showed stronger impulsive spending. Additionally, this research proves that without a budget, many teens overspend as soon as they have extra money. It is especially easy to spend money on worthless or single-used products when you have less experience with budgeting.
A budget is like a safety net, helping teens resist emotional or social spending and prepares them for adult financial responsibility. Hence, it is important for teenagers to learn how to correctly spend money before they have to make bigger financial decisions as an adult. Keeping and creating a budget will be a long term benefit as teens who already have experience with correctly spending money will be less likely to face harder financial management as an adult.
This is where budgeting comes in. A budget is a plan for your spendings and saving as well as earnings. It is not about limiting the thing you want to buy, but re-thinking the things you actually need and what you can save for later. A budget helps teens understand the difference between needs and wants.Needs are things like food, school supplies, or transportation while things you might want are things like the latest phone case, a new video game, or a bag of snacks. Saving, meanwhile, is the money that you save for a bigger purchase, it is like an investment for future goals, such as a laptop or long-term things like college. Teens need to learn to budget because it helps them learn to control their money instead of letting the money control them.
Creating a budget as a teen doesn’t have to be complicated. The first step is tracking your income. This could be an allowance, money you earn from chores, or a part-time job. A great way to start to track and budget is keeping a digital track or note of all the money you earn and spend.Categorizing your spending into needs, wants, and savings is also a great way to keep an organized and easy to track budget.The key is to find a system that works for you, so it doesn’t feel like a chore.
Budgeting has many benefits, even in the short term. For example, if you really want to buy a new game or go on a small trip with friends, having a budget can help you save for it without guilt. It reduces the chances of useless purchases and also encourages you to think about what you really want versus what you want at the moment. Spending like this might not seem life-changing at first, but it’s a habit for teenagers that will make a major difference over time. There are multiple long term goals as well. As a teen,saving for a college, a car, or personal projects are important. Budgeting teaches discipline and planning, which are skills that are needed in adulthood. When teens start practicing saving now, it becomes easier to manage finances later in life, whether it’s paying bills, managing a salary, or planning for big life events.
Furthermore, keeping in track of your own money reduces stress and boosts confidence, too—budgeting makes people feel independent and capable when you can make decisions about your own money. Budgeting also teaches accountability. Every choice you make, every decision will be a next step in becoming a more responsible and thoughtful individual.
Staying within the budget range can be challenging, especially when we are trying to give someone a gift or when we get a large amount of income, such as when we receive our monthly salary. Therefore, it is key that we stay flexible and always remember to make this into a habit and a lifestyle rather than limited spending. Teenagers can also reach out to parents and schools for help. Students can benefit from lessons at home about how to budget, save, and spend wisely.
In conclusion, it is important for teens to create and stick to a budget from a young age. Since they are more easily prone to advertisement, peer pressure and other factors, it is necessary to teach all teens about budgeting. Learning to budget now may not always be fun and easy but it is absolutely necessary. The sooner teens start budgeting, the easier and more rewarding their financial journey will be.
By: Nayun Kim
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