The Teach Your Teen How To Budget Series

with LIFE 101 PRO

Get Your Free Workbook Here

Over the next few weeks I am going to be sharing Money Management and Budgeting Tips for Teens.  (The same ones we taught our own teens.)

I also have a *FREE* Teach Your Teen How To Budget Workbook that you can get HERE.

PART TWO: Teaching Your Teen To Live Below Their Means

Last week our budgeting lesson for teens was all about teaching our teens to give, save and spend their money and be PURPOSEFUL with their money.  This week, it all about staying in CONTROL of their money.

"Live below your means" was a new concept we learned from taking Financial Peace University.  We decided those words equal - have more money than month! ;)

One of the best ways to do this is stick to your budget like it is in the LAW.  We found the best exercise for our teens to feel the weight of this idea was to put them in charge of the grocery money.

Want to make our Teaching your Teen how to Budget Series into your own lesson plans?  CLICK HERE TO GET OUR FREE WORKBOOK. 😊

Living Below Your Means

Introducing the Envelope System

An envelope system is super simple.  Pull out the money you have allotted for categories you will be going somewhere to spend the money (example: groceries, clothing, eating out) and stick it in their envelope.  When the money is gone, you can no longer spend money for that category.

There are THREE STEPS to this lesson.


Put your grocery money for one week into an envelope.  Plan your meals for the week and make a grocery list of items needed for that week.

Give the list to your teen and have them go purchase that week’s groceries.  The number one rule – they can’t spend more than is in the envelope and you need EVERY ingredient.

Totally expect this grocery trip to take for-ev-er.  Do you remember the first time you had to grocery shop with a list on a budget for the whole week?  You shop, then compare, then put back and finally pick it up again.

You get BONUS PARENT POINTS* if your teen helps you cook one of the meals that week.


Go ahead and plan all the meals for the week, except ONE.

Have your teen create the meal for that one night and have them write up a grocery list of items needed after checking the house for available groceries.

Then have them repeat step one (your grocery list + the added items from their meal as well), still staying inside the money in the envelope.


Doing step three KINDA turns this into a meal planning/cooking lesson as well as a budget lesson… so I am pretty sure we get BONUS PARENT POINTS* for multi-tasking our life skill lessons for our homeschool teens.

In this step, have them decide the dinner meals for the whole week. The catch, they will be making the dinners as well.  Have them create the grocery list needed for those meals. Add the other grocery needs for the week (lunch, breakfast, snacks) to the list and send them grocery shopping with the grocery envelope.

I am pretty sure our teens get a SUPER BONUS POINT as well for this week, as we are off cooking duty for dinner all week. *WOO-HOO!*

The last part of the grocery lessons.  Because we want them to learn that there is reward in life for living below your means, we created a bonus option.  (TOTALLY YOUR CALL)

BONUS OPTION:  If they are able to get all the groceries needed for the whole week and stay under budget, they have 2 choices:

  • They can get a tip when they get home from some of the money left in the envelope


  • They can use some of the leftover money to purchase a special treat for the family.

Why go to all this trouble?

In truth, you and I both know, this WHOLE lesson has very little to do with grocery shopping and has EVERYTHING TO DO with helping our teens learn how to manage the money.

Instead of them blowing all the money on over-priced/unnecessary items, our teens are learning how to plan how they will spend their money and then following the rules decided for that money.

Which sounds a lot like creating a budget and sticking with it. *YAY* (I so wish I’d learned that as a teen.)

As they are grocery shopping, they are having to decide what is “worth it” – name brands, more quantity, better taste, super cheap – all to stay within the budget.  They might see the name brand peanut butter they like, but realize they don’t have enough money for that, and they have to tell themselves no.  Either to the name brand peanut butter or a higher priced item already in the buggy.

It’s a good thing for them to feel the struggle.

Helping our teens hear the word “no” internally now, will (hopefully) make it easier for them to make better money choices on their own.

The world (their friends, every commercial and billboard, and window display in the mall) is AMAZING at telling them that they deserve that nice purse or that trip to Mexico.

As parents, of course, we want our kids to have nice things and go on fun trips, but what we don’t want is for them to justify spending more than they have, just because they want it now.  And then begin the quick and over-whelming descent into credit card debt.  All because they never learned to say no to themselves.

We are trying to help our teens learn now (while they still kind of listen) that if they want something, they need to create a plan and save up for that reward.

Want to take this budgeting lesson for teens a step further?

Help your teen think of a bigger ticket item they might like to purchase or a place they might like to go.  Have them research the idea and come back with numbers.  Consider how much they would need to make each month to purchase the item or go on that trip next year at this time.

If the number is quite ambitious, maybe brainstorm ideas with them on how they might be able to make more funds over the next year.  All that might even lead to a small business 101 class for the fall – never a bad thing. 😉

You’ve got this!

On the journey with you,

- melissa

Melissa is the creator of LIFE 101 PRO, a company that creates lessons to help prepare teens for adulthood.

*Ok, so I’m not sure what I will ever get to do with the BONUS PARENT POINTS I have decided we are all earning… but I figure they are never a bad thing to grab them when you can. 😉

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