A financial plan is an individual pursuit. One plan certainly does not fit all, but there are some basic guidelines that all teens can follow to ensure that the plan they create is in their best interest.

1. Set Goals

2. Make a Budget

3. Prioritize

4. Stay Focused

Set Goals

The path to financial freedom is lined goals. Goal setting is extremely important because it puts meaning to every penny saved. When money is stashed away it is no longer simply labeled as 'savings' but it can be tied to something specific and something time-bound. In other words, you will know exactly what it is for and when you will have it, if all goes according to plan.

Make a Budget

Budgets set everything out in a clear and concise format. Income goes on one side, expenses on the other. The difference is what goes into savings.

Prioritize

Sometimes things aren't so simple. You may find that you have more goals than income and your expenses are spiraling out of control. This is where prioritizing comes in. Because income is not unlimited you must learn to put things in order of importance.

You can try to make more money or you may want to cut down on your expenses. Alternatively you can choose to focus on one goal at a time or split savings into two accounts and do two things at once. The decision is yours to make but when you discover that your money simply will not stretch to meet all your demands it's time to start thinking about which way you want to go.

Stay Focused

Nobody is perfect so you may fall prey to excessive spending. It is important to share your goals with your parents so that they can help support you when you seem to be veering off-track. It may help to stick up pictures of the thing you are saving towards to help fuel your motivation to save or to post weekly alerts to yourself with a motivational quip that can keep you going. The reward will be worth the effort and sacrifice.

A financial plan is like a road map for your money. It often changes direction as the things that are important to you may change as you get older. The important thing is that your movements are recorded so you can track your successes and failures along the way. Credit rating agencies will be doing their part in following you on your journey, so it makes sense that you keep your record as well.

Learn more about this author, Natalia Jones.
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