Financial Planning — Life at 18 on a Budget
The teen builds a hypothetical monthly budget for living independently at 18 — researching real costs, making trade-offs between needs and wants, understanding opportunity cost, and confronting the realities of financial independence. This builds financial literacy, long-term planning skills, and a grounded understanding of adult economics.
Opens a guided voice session in TogetherTime.
What you'll need
Paper/notebook, calculator or spreadsheet app, and a device to look up local prices (rental listings, grocery costs, etc.). The parent should know approximate local costs for rent, utilities, and groceries but let the teen research and discover the numbers. This works best when the teen encounters real numbers rather than being told them.
How it works
- 1~40s
First: income. your child, what kind of job could you realistically get at 18? Look up or estimate what that pays per hour. Now calculate: working that many hours per week, what's your monthly income AFTER taxes? Rough estimate is fine — figure about 75-80% of your gross pay makes it to your bank account. Now the big expenses: rent (look up a studio or 1-bedroom in your area, or a room in a shared apartment), utilities (electric, internet, phone), and transportation. Write down each one. you, tell me the numbers your child comes up with and whether the reality is hitting yet.
Watch for: Ability to research and estimate realistic income and fixed costs for independent living
- 2~35s
Now the interesting part. your child, after fixed costs, you have some amount left. That has to cover food, clothing, personal care, and everything else — entertainment, subscriptions, going out with friends, savings. List everything you'd want to spend money on. Then sort them: what's a NEED (you literally cannot function without it) and what's a WANT (you'd like it but could survive without it)? Be honest — is Spotify a need or a want? Is eating out a need or a want? Where's the line? you, tell me how your child categorizes things and what trade-offs emerge.
Watch for: Ability to distinguish needs from wants and make realistic trade-offs within budget constraints
- 3~35s
Final piece. your child, look at your complete budget. Now let's talk about the invisible cost — OPPORTUNITY COST. Every dollar you spend is a dollar you can't save, invest, or spend on something else. If you spend $50/month on entertainment, that's $600/year — enough for a plane ticket, a course, or a start on savings. I'm not saying don't spend on entertainment — I'm saying know what you're choosing. Last question: what's your financial PLAN? Not just your budget, but your trajectory. Where do you want to be financially at 20? 25? What would need to happen to get there? you, tell me whether your child can think beyond monthly survival to long-term financial planning.
Watch for: Understanding of opportunity cost and ability to think about long-term financial trajectory