07 Apr Your budget: money in
So let’s start from the beginning by shaking out the piggy bank. (Grab a pen and paper to help you with the calculations as you go.) How much money do you currently have? $10? $.29? $82,000?
Now how much of that money is available to you? Wait. How can you own money but not have it available to you? Well, some very lucky people have been given money by various adults over time, such as money gifts when you were born, barfed for the first time (just kidding), had a birthday, graduated or even won an award. Quite often, parents will take that money and put it into a savings account for you.
So although you may have answered the question, “How much money do you have?” with a whopping $7,853, if part of that amount is controlled by your parents until you are 18 (or some other time that they have chosen), the amount they control really isn’t going to factor in to your daily budget that much, so you would really just leave it out for now.
So, write down the amount of money that is available to you.
Nicki had $230 saved to spend. Harrison had $1345 in savings but he didn’t want to spend it so he didn’t put it in his budget.
Next, write down how much money you make each week.
Did you just scream, “MAKE???!!! I’m in school?!!” Well, believe it or not, some kids in school do make money each week by having jobs like babysitting, dog walking or even selling flying green walnuts. Other kids are given an allowance each week. You can officially start working at 16, so many teens take on more regular work at this age, juggling school and work. What is your situation?
If you have an allowance each week, write that down. If you earn extra money with a regular side job (like babysitting every Friday night for $20) or steady job (like at the ice cream parlor) write that down.
If you earn money sporadically (not regularly, because people only buy flying green walnuts randomly), then add up how much you made over the past month and divide by 4 weeks. That’s an approximation of how much you can expect to make each week. (And this is also why reviewing you finances regularly is a good habit. This number could go up and down and you will need to adjust your spending accordingly.) However, since this money is not guaranteed to be made, you have to be very careful about working it into your budget; you may want to leave it out until you actually make it.
For instance, Nicki had a regular job once a week babysitting for a neighbor. She would earn $25 each time. However she also had another family that would call her to babysit every once in awhile. When Nicki looked back over the past few months she realized she had made an additional $75 in December but only $20 in January. She decided not to factor this job into her budget. That way, if she made additional money for it, the money could go right into her savings, helping her to be better set up for the next year.
|Available money for Nicki||Money Nicki earns on regularly||Money Nicki earns from time to time (underestimate this)||Total to spend for the year|
|$230||$25 babysitting a week – 48 weeks a year = 1200||Nicki didn’t want to include this||$1430|
Harrison’s parents provided him with an allowance ($20 a week) and with ways to make money around the house if he chose to do so. So for his budget, he factored in $16 extra per month as he knew he could at least make the time to work two hours a month for his parents. Notice that he UNDERestimated how much time he would work for his parents. That way he was more likely to OVER achieve and stay on budget rather than UNDER achieve and miss the mark.
|Available money Harrison||Money Harrison earns regularly||Money Harrison earns from time to time (underestimate this)||Total to spend for the year|
|He didn’t want to add this in||Allowance $20 x 52 weeks= $1040||$16 a month x 12 months= $192||$1232|
So now you know what you are likely to have to spend. Let’s look at what may be going out in the next post….
Name something you could do to make money or something you would like to do.