Money going out represents your expenses. To get a grip on your expenses for your budget, the first items to consider are the regular payments that you make each week. When you are younger, a lot of parents cover weekly costs (like lunch money and swim lessons) but as you get older, some of those regular payments may shift to be your responsibility. For instance, when you get your driver’s license you may be responsible for paying your portion of the insurance on the car each month or to contribute a certain amount for gas each week. 

When you get older, your regular expenses expand quite a bit. A typical person has regular bills that include, but are not limited to!, things like rent, groceries, electricity, heat, phones, internet, health insurance, car insurance, property insurance, car leasing payments… Did you just go, “What??!!! How can someone pay all that?” Well, that’s why you are learning this now, so that you will be able to handle those responsibilities when the time comes.

So breathe deeply right now and relax. You likely don’t have all those payments just yet. But to help you with your current budget, you should make a list of the regular payments for which you are responsible (if any). Harrison’s and Nicki’s expenses looked like this:

Then, you also need to think about other expenses for which you are responsible, like birthday presents for friends and family, movie tickets, holiday presents, meals when out with your friends, clothing that is not a necessity, etc. You may not be responsible for any of these, but you may be responsible for quite a few. Make a list for yourself of all the things that are your responsibility and how much you anticipate (guess that you will be) spending on them. 

Nicki’s anticipated expenses for the year were:

Holiday presents: 10 total presents $25 each = $250

Birthday presents: 3 friends, 2 family $25 each = $125

New clothes: $300

Books: $25

Movies: $50 (5 movies a year)

Food with friends: $200

Unexpected needs (i.e., computer repairs): $200

Total $1150

Harrison didn’t have some of the expenses that Nicki had like new clothes, books, birthday presents for friends or unexpected needs: his parents paid for those things.  But he was expected to pay for gifts during the holidays and for money he spent when hanging out with his friends.  So Harrison’s anticipated expenses were:

Holiday presents: 10 total presents $50 each = $500

Movies: $100 (10 movies a year)

Food with friends: $400

Total $1000

Add that up and then add that to your expenses list.

Now that you know the money that is likely to come in and that which is likely to go out, you can compare the two and see if you have a workable budget. Were Nicki’s and Harrison’s workable? Find out in the next post.