5 Money Mistakes Every Teen Makes (and How to Fix Them) - PureWow

2. Living Beyond Their Means

Fun opportunities come up for teens, like, all the time. Road trip! Music festival! Essential new party look. But fun costs money. And it's almost too easy to blow your budget on emotionally driven impulse buys. What's the best defense against over-spending? A good offense. "Build a budget and have a plan for how you're going to use your money before you spend," says Eaton. If your kid is more of a big picture thinker, try a "three bucket system" wherein an equal portion of his income (whether it's from an after school or summer job, birthday gifts or an allowance) gets allocated into spending, saving and giving. If he's more detail-oriented, get granular. Help him write up a detailed budget with line items for every essential need (school supplies, cell phone) as well as wants (dinners out, video games). "Spending more than you earn can lead to unnecessary money emergencies and debt," warns Eaton. Remember: A budget only works if you stick to it.