Budgeting Basics for Teens

What are the key components of creating a personal budget plan?

• Identifying income sources, listing all expenses, setting financial goals, tracking spending, and adjusting the budget as needed.

• Not tracking spending

• Investing in high-risk stocks

• Ignoring income sources

Explain the difference between needs and wants with examples.

• Needs are things we can live without, while wants are things we cannot live without.

• Needs are essential for survival, while wants are not necessary for survival but are desired. For example, food is a need, while a new car is a want.

Why is it important to understand the concept of saving? Provide at least two reasons.

• Saving is only important for wealthy individuals

• Saving is not important because it's better to spend all your money now

• Saving allows you to plan for your future and avoid financial stress during emergencies.

• It's not important - the government will always provide financial assistance during emergencies

How can you set financial goals that are achievable and realistic?

• Set vague and unmeasurable financial goals

• Ignore financial goals and just hoping for the best

• Set unrealistic and unattainable financial goals

• Set specific and measurable financial goals, prioritize them, break them down into smaller steps, and regularly review/adjust

What are some effective ways to manage an allowance or income?

• Create a budget, sett financial goals, track expenses, save a portion of your income, and avoid unnecessary expenses.

• Do NOT set any financial goals

• Do NOT track expenses

• Spend all your income on unnecessary items

Categorize each statement as SMART Budgeting or Common Budgeting Mistakes:

Groups:

(a) SMART Budgeting

,

(b) Common Budgeting Mistakes

• Track income/expenses and adjust often

• Not having a budget at all

• Waiting to save money

• Pay yourself first

• Use cash or debit card instead of credit card

• Overspending

• Purposeful spending based on your financial goals

• Ignoring the importance of an emergency fund

• Not tracking expenses

• Create an Emergency Fund

• Regularly review and adjust your budget

• Impulse buying

• Not setting financial goals

• Getting into debt by financing everything

• Automate savings and investments

• Seek financial advice when needed

Explain the concept of 'paying yourself first' in the context of budgeting.

• Saving/investing a portion of your income before using it for any other expenses.

• Borrowing money to cover your expenses before saving or investing

• Spending all your income on immediate wants and needs

• Only saving or investing what is left over after all other expenses

What are some practical tips for saving money on everyday expenses?

• Budget, avoid impulse purchases, use coupons, buy generic, cook at home, and find cheaper alternatives for entertainment.

• Dining out often in restaurants

• Buying expensive gadgets

• Ignoring sales and discounts

How can teens prioritize their spending to ensure they stay within their budget?

• Identify needs vs. wants, track expenses, create a budget

• Spend all your money as soon as you get it

• Prioritize wants over needs

• DoorDash

Categorize the following as NEEDS and WANTS

Groups:

(a) NEEDS

,

(b) WANTS

• Basic healthcare

• Trendy clothing

• Safe and reliable housing

• Insurance

• Essential utilities (ie: water, electricity)

• Luxury vacations

• Dining out at restaurants

• Reliable car

• Luxury watches

• Luxury cars

• Tattoos & acrylic nails

• Basic cell phone plan

• Emergency Fund

• Healthy groceries

• Designer handbags

• Streaming services (ie: Netflix, Hulu)