Managing Finances for Teenagers by emily and llogan 9.1

A budget is a plan used to allocate funds based on income, expenses, needs and wants. Budgets can be used to predict the amount of money needed to be saved and divided out into different critical and minor categories based on the outgoing payments. Teens need to budget in order to be able to earn and save for future expenses, while being able to purchase wants and necessities now.
To create a budget, you need to ensure that the amount of income is higher than the amount of expenses. You must keep into consideration the needs and wants, so that you can correctly document the amount you have to spend in certain areas.
In budgeting the amount of income needs to be more than the amount of expenses, insuring that money is being saved for needs first before other wants. Income is the amount of money that is earnt or that is deposited into your bank account on a scale of time. Types of income include, wages, tips, pocket money, Centre Link and government funds. Expenses are known as mortgage, water bills, electricity bills, food, petrol and shopping money. You need to distinguish between needs and wants to create a functional budget. Needs include expenses that cannot be lived without. Wants are other things that you would like to have but can be pushed aside until all needs are payed for, therefore they go to the bottom of the budget.
Above are two tables showing some incomes, expenses, needs, as well as wants.

Debt is an amount of money that is owed to another person or company when you borrow money after you have spent your savings. People can get into debt in many ways. The most common ways people get into debt include reduced income, divorce, poor money management, credit cards, gambling, or not saving. In credit and debt, there are many consequences that may put pressure or added stress on your life, which is why it is very important to manage your finances correctly. Consequences of credit and debt include not being able to repay, getting yourself into more debt, and receiving a bad credit report.

Types of credit include student loans, business loans, auto loans, and mortgages. When these loans are issued, there are many risks associated such as interest rates rising, extra charges, as well as job stability in some cases. Minimum charges must be made one way or another. This information then contributes to a credit report that can be seen by other people if you apply to receive another loan. Therefore it is crucial to budget to avoid any mishaps during the loaning process.

There are many different ways to save money based on your lifestyle. For example, put away a set amount of money per week, create a budget, save on electrical and water bills by using only what you need, and resist from purchasing unnecessary goods and items.


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