# Budgeting for Teenagers

### by Karen Jones

Dear Karen,
Hi my name is Danielle and I am 16 years old. I am a student and have a part-time job at a local McDonalds restaurant here in Nova Scotia, Canada. I was looking on the internet for information on budgeting and came across your letter. The thing I have a problem with was the "sum function." What is that?

Also I was wondering if you had an easier budget plan specifically designed for teenagers with part-time jobs like myself.
Danielle
Concerned money spender

Dear Danielle,
The "sum function" is one of many "functions" (programmed formulas) that are built into spread sheet programs. There are a great many different "functions" (logical, financial, mathematical, statistical, etc.). That's what spreadsheets are all about. All of which can be accessed from a menu somewhere depending on which spread sheet program you are using.

The "sum" function gives the sum of values in a row or column of cells. Since it is one of the most frequently used functions, some spreadsheets have made it extra easy by having an icon button in the tool bar with the "sum" symbol (a Greek letter that looks sort of like an uppercase "E") in it. This is what I meant by "auto sum" (I use MSWorks 4.0 for Windows 95). You just click on the button and automatically it fills in the formula for the sum of all the cells immediately above or to the left (whatever the case may be). It's very quick and easy.

I looked in "Quatro Pro," another spreadsheet program, and there it is called "quick sum." The syntax is slightly different.

For your budget I would do something very simple:

1. What is the minimum amount of money (take-home) that you make every week?

2. Use that amount to figure out how much you will make each month from now until school is out. Use the number of paydays each month as the multiplier. Some months will have four paydays, some five.

3. Ask your boss if he/she will give you more hours for the summer. How many? Factor in time off for a family vacation if that is likely.

4. Use info from #3 to estimate what you will most likely earn for each of the remaining months until you go back to school in the fall.

If you plan to keep on working part-time in the fall, estimate your earnings, as you did for current work, for the remainder of the year.

Now, in your spread sheet put a title in the first row. Put it in column E or F. You could call it "MY BUDGET FOR 1998"

Leave row 2 blank.

In the third row, put the months of the year in columns B through M. Put "Total" in column N.

In the fourth row, put "INFLOWS" in cell A4.

In the fifth row, cell A5, put "Wages". In cells B5 through M5 put your earnings estimates for your wages for each month that you figured out above. Move over to cell N5. Click on the "Auto Sum" button in the tool bar (if you have it) or find the menu through which you can access "function", click on it for a list, and look for "SUM" (you will need it for the correct syntax). The parameters to fill in for the "SUM" function will be B5:M5 (automatically filled in with AUTO SUM). Press the enter button after you have keyed it into cell N5.

If you had other sources of income you could do additional rows and sum the column for each month.

Skip a row, and put "OUTFLOWS" in col. A. (I think we're up to row 7 here).

Now you can continue entering in column A category names for things you would like to spend your money on. I would keep it simple.

Examples:

Giving - to your church, or a charity; 10% suggested

Saving - for a long- or short-term goal, examples: car or college; 60% suggested

Spending - an allowance you give yourself for recreation, snacks, cosmetics, etc.; 30% suggested anything else you want to keep track of such as clothing, transportation, etc.; (decrease the savings or spending proportionately)

Please note that the sum of each column of OUTFLOWS should not exceed the INFLOW for that column (above it).

If you want to use percentages, as I have suggested in the examples above, you could have the spreadsheet figure out the amounts for you by entering a formula instead of an amount in the appropriate cell. If your total income for January is the amount you entered in cell B5, for example \$100, and the "Giving" category is in row 8, you could put this formula in cell B8: =b5*.10

Press the enter key and now you will see \$10 in cell B8 of the spreadsheet.

Note that the formula is still visible in the data entry line at the top of the spreadsheet when that cell is highlighted. You would still need to use the "sum" function at the bottom of the column of monthly expenses to total them, then compare them with the total income for the month on line 5 (or whichever line your total income happens to be on) by entering a formula to represent "total inflows" - "total outflows". Hopefully this will yield zero, "0", if done correctly. Note that the percentages must not exceed 100% of the total. Don't forget to total each spending category for the year using the sum function (or auto sum) over in column N.

I hope this all makes sense to you and that I have not overwhelmed you with too much information. The main point I would like to make is that YOU can design your own budget to fit your own situation. Don't forget that in order to make a budget work you have to keep good records of everything you earn and everything you spend, whether on the computer with a program like Quicken (probably overkill for someone like you) or on paper (accountant's ledger paper, cash journal, or plain notebook). Then compare it with your written plan (the budget) to see how you are doing.

Good Luck,
Karen Jones

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