Lessons·life-skills·teens · intermediate
Your First Budget
Learn about income, expenses, the 50/30/20 rule, and how to make your money work for you — whether it's pocket money or your first job.
About 25 minutes
You get £50 a month. Your phone costs £15, Netflix is £11, and you want new trainers that cost £80. How long will it take?
Before you start
Watch How to Budget by The School of Life (5 min) — Think about your own spending. Do you know where your money goes each month?
- Do you have any money coming in (pocket money, part-time job, birthday money)?
- What do you spend the most money on?
- Have you ever run out of money before the end of the month/week?
Why Nobody Teaches You This (But Should)
Here's an uncomfortable fact: most adults are terrible with money. A 2023 survey found that 39% of UK adults have less than £1,000 in savings. One in four can't cover an unexpected £300 bill. And most people were never taught how money works — not at school, not at home.
The good news? Budgeting isn't complicated. It's just maths plus discipline. And if you learn it now, at your age, you'll be ahead of most adults for the rest of your life.
The basics: a budget is simply a plan for your money. Money comes in (income). Money goes out (expenses). If more goes out than comes in, you've got a problem. If more comes in than goes out, you can save and eventually invest.
British money culture has some quirks. 'Going Dutch' means everyone pays for their own meal (though Brits often argue awkwardly over the bill). 'Getting a round in' means buying drinks for the whole group — and it's very much your turn next time. Understanding these social rules matters as much as the maths.
The 50/30/20 Rule
This is the simplest budget framework that actually works:
**50% — Needs** (things you must pay for)
Phone bill, transport to school/work, food if you're buying your own. For teens, this might be quite small.
**30% — Wants** (things you enjoy but don't need)
Clothes, eating out, games, cinema, subscriptions. This is where most people overspend.
**20% — Savings** (money you don't touch)
Put this away every time money comes in. Even if it's just £5. This money is for future you — emergencies, big purchases, or long-term goals.
**Example with £50/month:**
- Needs: £25 (phone £15 + transport £10)
- Wants: £15 (eating out, one small purchase)
- Savings: £10
- Trainers at £80? You'll save enough in 8 months. Too long? Find a way to earn more, or find cheaper trainers.
**The latte effect:** Small daily spending adds up fast. A £3 coffee every school day = £60/month = £720/year. That's a holiday. Being aware of small spending is the most powerful budget tool there is.
What You Now Know
- Budget
- A plan that shows how much money you have coming in and how you'll spend it.Making a budget means writing down your income and all your expenses — then checking the maths works.
- Income vs Expenses
- Income is money coming in. Expenses are money going out.Part-time job pays £200/month (income). Phone and transport cost £40/month (expenses). You have £160 left.
- The 50/30/20 Rule
- Spend 50% on needs, 30% on wants, save 20%.From £100: £50 on essentials, £30 on fun stuff, £20 into savings.
- Compound Interest
- When your savings earn interest, and then that interest earns interest too — your money grows faster over time.£1,000 saved at age 16 with 5% interest becomes £7,040 by age 56 — without adding a penny more.
- The Latte Effect
- Small daily expenses that seem harmless but add up to huge amounts over time.A £2.50 meal deal every day = £650 a year.
Let's Discuss
- How do you currently manage your money? Do you have a system or just spend until it's gone?
- Should schools teach money management? Why don't they?
- Your friend always borrows money and never pays it back. How do you handle this?
- Is saving 20% realistic for someone your age? What would you have to give up?
- Devil's advocate: 'You're only young once — why save money when you could enjoy it now?'
Money Vocabulary
| English | Türkçe |
|---|---|
| skintI can't come out tonight — I'm completely skint until Friday. | meteliksiz / beş parasızBu akşam dışarı çıkamam — Cuma'ya kadar tamamen beş parasızım. |
| loadedHis family is loaded — they've got a massive house. | paralı / zenginAilesi acayip paralı — kocaman bir evleri var. |
| quidCan you lend me a couple of quid for the bus? | sterlin (argo)Otobüs için bana bir-iki sterlin borç verebilir misin? |
| rip-off£6 for a sandwich? That's an absolute rip-off. | kazıklama / pahalıBir sandviçe £6 mı? Tam bir kazık! |
| bargainI got these trainers for £20 in the sale — what a bargain! | kelepir / fırsatBu spor ayakkabıları indirimden £20'a aldım — resmen kelepir! |
| tightHe's so tight he won't even buy his round at the pub. |
Writing task
Write about 150 words on this and have it marked, with corrections. Free account needed.
Discuss this in English
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