Today will serve as an introduction for high school students on how to budget. We will discuss the basics of a budget for a high school student. With this in mind we will not include some things in our budget.

The first step in creating a budget is determining how much money you make. Some people have a steady stream of income because they work consist hours. Others have a more flexible income that changes with hours, sales, and tips. To get start you will first determine how much money you make each pay period: week, month, etc. The other big question is how often do you get paid: weekly, bi-weekly, monthly, etc as this will effect how you set up your budget.

The first thing you should do is pay yourself! For a high school student that may not have many other responsibilities such as bills and loan payments you want to save as much as possible. It is recommended that you save at least 10% of what you make. However, today we will recommend that you save 20% of your take home paycheck.

Next we want to invest money for the future. This will most likely be towards your retirement. Even though retirement is very far off start early is the most important part of investing! Did you know that if you invested $200 from the time you are 14 to 24 and then stop investing you would have around $1.5 million dollars when you are 64, but if you wait until you are 24 and invest $200 a month from 24 to 64 you would have under $1 million! Starting early made you a half-million more dollars with investing one-fourth of the money.

Now that we have put away 30% of your money we still have 70% of your paycheck to budget. It is important that every dollar you make has a job. Now you will make a list of how you spend your money and where you need your money to go. Do you have a phone bill? Car insurance? Gas? Food? Entertainment?

It is important to make sure that your bills are paid first. According to different financial planners necessities should be 50% of your budget. Now remember this includes housing, which is not in the typical high school student budget. You need to pay your bills first and then I recommend that you put more in savings.

Lastly you can budget the rest of your paycheck to food/entertainment. With our basic budget guidelines this is 20% of your budget. I know many high school students are tempted to make this category larger. You may be able to do that if you do not have many responsibilities elsewhere, but remember the importance of saving and investing your money now. Saving is very important so that you can make large purchases in the future such as buying a car or paying for college.