How to Make a Budget as a Teen in 4 Steps (Table Included)
How to make a budget as a teen: 4 simple steps, an honest look at the 50/30/20 rule, and a table you can copy, with advice from the CFPB.
In this guide
To make a budget, write down the money you get each month, write down what you spend, and decide ahead of time how much goes to things you need, things you want and savings. That’s it. The Consumer Financial Protection Bureau (CFPB), a U.S. government agency, calls a budget “a plan for how to spend and save money.”
You don’t need a job or a lot of money for this to work. Allowance, birthday cash, babysitting money and a part-time paycheck all count. A budget just stops you from wondering where it all went.
Here are four steps, a table you can copy, and an honest look at the famous 50/30/20 rule.
Step 1: Add up your income
Start with every dollar you get in a typical month: allowance, a job, side hustles, gifts, money from selling stuff. The CFPB suggests recording all your income, including from more than one source.
If you have a paycheck, use your take-home pay, not the bigger number before taxes. The CFPB says a budget should be made using your net income, which is “the amount of money you bring home in your paycheck after taxes and other deductions are taken out.”
Money that changes every month, like babysitting or yard work? Use a smaller month as your guess, not your best one. If you earn more, great. That’s extra to save.
Step 2: Track what you spend
This is the part nobody loves, and it’s the one that makes the rest work. The CFPB’s budgeting guide calls it the heaviest lift, but it gives you a realistic picture of your average month. Its advice:
- Make it easy to do in real time. The CFPB suggests something like a daily journal or a folder of receipts that you look at every week.
- Count the small stuff. Small purchases “add up over time,” like buying lunch instead of bringing it from home. Coffee runs, snacks, in-app purchases and subscriptions all belong on the list.
- Start small if it’s overwhelming. Review your receipts or bank account one week at a time.
Use your notes app, a notebook, or your bank’s app. The method doesn’t matter. Doing it does.
Step 3: Split your money into categories
Now sort your spending. The CFPB uses three groups, and its definitions are useful:
- Needs: basic things people must have, like food, clothing and shelter, plus things they need to do their jobs.
- Wants: “upgrades and other things that would be nice to have but aren’t necessary,” like eating at a restaurant or going to a movie.
- Savings: money you set aside in a secure place, such as a bank account, for emergencies or specific purchases.
For most teens, parents cover housing and groceries, so your “needs” might be small: a phone plan you pay for, bus fare, school supplies or a work uniform. Your wants will probably be bigger. That’s normal.
Step 4: Compare, then adjust
At the end of the month, look at what you planned versus what really happened. Over in one category? Either cut it next month or move the plan. A budget that doesn’t match your life gets ignored. The CFPB also says to review your budget when things change, like when you get a new job.
What is the 50/30/20 rule?
It’s the most famous budget formula. According to the CFPB, it means using 50 percent of your net income for needs, 30 percent for wants, and 20 percent for savings.
The honest part: the CFPB itself says it’s “only one rule to live by” and that “not everyone can follow it.” It tells people to find a rule that works for their own situation. It also notes that in this rule, emergency savings count as savings even though people often think of them as a need.
For a teen, here’s a version that’s easier to live with. This is our suggestion, not an official rule:
| Group | Official 50/30/20 | Example on $200 a month |
|---|---|---|
| Needs | 50% | $100 (phone bill, bus fare, school stuff) |
| Wants | 30% | $60 (food out, clothes, apps, fun) |
| Savings | 20% | $40 (goals and emergencies) |
If your needs are tiny, you can flip it: put more into savings. If you have a lot of costs, like a car payment or helping your family, 20% savings might be impossible right now, and that’s okay. For a simple starting goal, the CFPB’s page on teens and saving suggests saving at least 10 percent of what you earn from a steady job, right into a savings account.
A budget table you can copy
Copy this into your notes app or a spreadsheet, or write it in a notebook. Fill in “Planned” at the start of the month and “Actual” at the end.
| Item | Planned | Actual |
|---|---|---|
| INCOME (allowance, job, side hustles, gifts) | $ | $ |
| NEEDS (phone, transportation, school supplies, work clothes) | $ | $ |
| WANTS (food out, shopping, apps, subscriptions, fun) | $ | $ |
| SAVINGS (goal fund, emergency fund) | $ | $ |
| LEFT OVER (income minus all of the above) | $ | $ |
How to read it: subtract your total spending from your total income. If the result is positive, you have money left to save or spend. If it’s negative, find something to cut.
Where to keep the money
Your budget works better with a real account. The FDIC’s guide to your first job suggests opening a bank account so you can keep track of your earnings and keep them safe, and working with a trusted adult to split your pay between everyday spending, bills and savings. It also warns about overdrafts: many banks charge “$35 or more per overdraft,” so watch your balance and check your bank’s fee schedule.
Not sure where to start? Read how to open a bank account under 18 and compare a debit card for teens.
What to do when the budget isn’t working
- You keep overspending on wants. Give yourself a fixed “fun money” amount at the start of the month and stop when it’s gone.
- You can’t save anything. Start with a tiny amount, even a few dollars. The habit matters more than the number. More ideas in how to save money as a teenager.
- You don’t earn enough. Check out how to make money as a teen or our list of jobs for 16-year-olds.
- You forget to track. Check your bank app once a week at the same time, like Sunday night.
