Money Management for Teens - NBECH SAVID
Name ______________________________________ Date _______________________________ Period ___
Money Management
for Teens
Wants Vs. Needs
It is not uncommon to hear teens and even adults use the terms wants and needs interchangeably. You might
even hear a child say, ¡°I need a candy bar.¡± In reality, a candy bar is not a need ¨C it¡¯s a want. Wants are things
that you desire that may enhance your life, but are not necessary for survival. Needs are things that are, in fact,
necessary for survival. Knowing the difference between the two is the first step in managing your money. To
be financially responsible, one must make sure that needs are taken care of before wants. Financial problems
occur when wants come before needs. On the chart below, list several examples of needs and wants. An
example of each has been provided.
NEEDS
WANTS
¡ñ Food
¡ñ
¡ñ
¡ñ
¡ñ
¡ñ Video Game System
¡ñ
¡ñ
¡ñ
¡ñ
Budgets and Savings
One of the best ways to get what you want and need is to come up with a budget. A budget is simply a plan for
how you will spend your money. As kids, you may have separated your money into containers. Essentially,
this is a budget.
1
Currently, you may have a savings account or checking account with some money in the bank. You may also
have spending cash, so your ¡°budget¡± may look like this:
This is also a very basic budget. As you get older and have more financial responsibilities, a written budget is a
good idea. In the previous two examples, you created two or three categories (i.e. spending, savings, and
giving). A written budget takes into account what you are specifically spending money on. The following
example is a budget for a high school student who lives at home, has a part-time job, and takes home $400 per
month after taxes.
Expenses
Budgeted Amount
Cell Phone
$40.00
Savings for College
$60.00
Car Insurance
$120.00
Gas
$100.00
Spending (Food, Clothes, Entertainment)
$80.00
Total:
$400.00
On the budget below, pretend that you are in high school, you live at home, and you earn $400 per month after
taxes. You may spend the $400 any way you choose, but you cannot spend more than $400 total.
Expenses
Budgeted Amount
Total:
$400.00
2
Savings Goals
A good budget typically has savings as one of the categories. But, what will you save money for? Setting
specific goals for your savings will help keep you motivated to save. As a high school student, you probably
have several things that you would like that you cannot currently afford. Some of the items that you would like
may require saving for several months (video game system, new cell phone, tablet, computer, etc.). Other items
may take several years (car, college, etc.).
On the table below, list several things that you would like to save money for. List the items in order of
importance to you (#1 is the most important and #3 is the least important).
Short Term Savings Goals (several months)
Amount
1.
$
2.
$
3.
$
Long Term Savings Goals (several years)
Amount
1.
$
2.
$
3.
$
Savings Accounts
Pretend that you put money into a savings account that pays you interest every month. After the first month, the
interest payment will be calculated based on the money you put in. At the end of the month, when the bank pays
you interest, it will calculate the amount based on your original deposit plus the interest you earned in the
previous month. Later, that larger, combined amount will earn more interest, and after many years it becomes a
much larger sum of money. The earnings are the result of compound interest. You can earn even more in
compound interest if you make deposits regularly and stretch to put in as much as you can and leave it
untouched. Let¡¯s say you put $50 in a savings account earning interest at a rate of 3.5 percent each month. If
you add just $10 each month, the account can grow nicely to $714 after five years.
3
Comparison Shopping
The best way to stretch your money is to spend it wisely. Comparison shopping can help. When purchasing
products or services, it is worth spending some time researching which company has the best deal. There are
several ways that you can comparison shop. The first way is by comparing the exact same item and selecting
the lowest price.
$1.29 at SaveCo Market
$1.19 at The Bargain Basket
Store Brands
Store brands are often similar in quality but less expensive than name brand products. Consider trying store
brands to save money. In the example below, the pear halves were packaged at the same warehouse. The pears
are the same. You are just paying for the name brand label.
Go online to research two different manufacturers of cell phones. Make sure the price is the same or almost the
same for both cell phones. Record your findings below.
Name and Description of Cell Phone #1:
Prices:
Name of Website:
New Price: $____.___
Used Price: $____.___
Features of Cell Phone #1
Name and Description of Cell Phone #2:
Prices:
New Price: $____.___
Used Price: $____.___
Features of Cell Phone #2
4
Name of Website:
................
................
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