How to create a budget
As stated earlier, a budget is simply an outline of income and expenses. As teenager you definitely have a means of income no matter how little, your monthly allowance is a form of income, your birthday gift (cash) is one too. So, you need to make a realistic projection of how much money is coming in (to you) per week or monthly and how much money is going out too. There are a few apps to assist you with budgeting online or you can do it the old-fashioned way, using paper and pen. Your income projections could be ranked under the following headings:
Allowance
Wages (payment for work done)
Tips
Gifts
Profit from sales
Bonuses etc.
Your expenses projections can be a bit trickier, typically expense estimates are based on the past one or two months of spending so it is encouraged to record your spending (as mentioned earlier)- even the tiny ones- for a couple of months before sitting to develop a budget. Some common expense categories include:
Mobile phone bills
Entertainment bills (seeing movies in the cinema, music, concerts, shows etc.)
Food (snacks at lunch time, lunch with friends etc.)
Personal (clothes, toiletries, haircuts, braiding, stationary, transport, make-up etc.)
Savings
Sharing (donations, gifts)
Investments
A budget really enforces the fact that money is in limited supply for most people as a result, you have to make spending choices. Planning maybe tough at times but ensures that money is intentionally and wisely spent.
According to Genesis 47:15-24, the following principles can be adopted;
1st 20% – Tithe, offering and Kingdom investment
2nd 20% – seed (investment and savings)
3rd 20% – Personal spending (cloths, toiletries, haircut, braiding, etc.)
4th 20% – Bills/entertainment (mobile phone bills, etc.)
5th 20% – Miscellaneous (can be channeled to investment and savings)
Learning to Invest
To invest means to allocate money in the expectation of some future benefit. In an economic sense, investment is the purchase of goods that are not consumed today but are used in the future to create wealth. The goal of investment is to put your money to work in one or more types of investment vehicles in the hopes of growing your money over time.
Why talk about investment?
Having talked extensively about saving and how to go about saving, its necessary to note that it is not just enough to save but to invest too. In drawing a budget, one of your critical categories of expenses should be investments. With investments, you make your money work for you. Investing requires prioritization of your financial future over your present desires. There is absolutely no reason to be afraid of investing, investing is great! It will help you earn a better return on your money, achieve your financial goals and increase your net worth.
Questions
What are the wrong reasons for saving?
Mention 10 means of making money as a teenager?
Give a biblical example of someone who practiced savings?
Give five reasons why you should save money as a teenager?
Conclusion
The critical subject of money is not taught through formal education; consider yourself and your actions to be your informal educators on this issue. So, ask yourself what have you been learning or teaching yourself? Perhaps it is time to change the lesson.
Extract from the TOM Camp booklet 2018
