8 Budgeting when at home
You can do a budget at a very early age. Probably your first source of income was when you started to get pocket money. Whatever the source, your first income meant that you could make choices about what you wanted to do with the money. You would have been able to spend it or save it towards a future major expenditure.
By the time you get to 16 the nature of your budget will have started to change.
Activity 5 What’s changed at 16?
Can you think of any reasons why your budget starts to change from around the age of 16?
By the time you get to 16 even if you remain in full-time education things are likely to change when it comes to your personal finances.
- You might be working part-time. This will give you additional money to spend or save on top of your pocket money.
- You might now be expected to take financial responsibility for items that used to be financed by your parents (such as the running costs of a phone).
- From the age of 17 you might need to meet the running costs of a car – paying for petrol and perhaps, in addition, insurance, repairs and Vehicle Excise Duty, usually called road tax. This means that your financial planning might need to cover a full year so that you can meet those larger, once-a-year, bills.
- You might be more inclined to save money towards a planned future event. This could be an end-of-school trip away with your friends. Or you might want to build up a store of savings to meet at least some of the costs of going into higher education.
So between 16 and 18 the process of running your own budget becomes more complex. There could now be multiple sources of income, some of your spending might be on meeting large annual bills (such as road tax) and you’re likely to start thinking about expenditure that will arise well beyond the current month or even the current year.