Hi everyone! I am Liam! I just got my very first paycheck from the coffee shop, and honestly, I want to buy every single thing in sight!Hello! I am Maya! I am here to help Liam make sure that paycheck actually lasts until the end of the month instead of disappearing in two days!Hey there! My name is Chloe, and I am going to show you how a budget is actually your best friend for reaching your biggest and most exciting dreams!And I am Noah! Together, we are starting a two part journey into the world of budgeting! Today, we are going to learn how to tell the difference between what we need and what we want. We will also look at how our values shape our financial goals! This is the very first step toward being totally independent and successful! Let us dive right in!So, here is the problem I am facing. I currently have exactly four hundred dollars in my bank account. I really, really want those new noise canceling headphones that everyone at school is wearing. They cost three hundred dollars. If I buy them right now, I will only have one hundred dollars left for the entire rest of the month. My phone bill is sixty dollars, and I promised my parents I would pay for my own bus pass, which is another forty dollars. That leaves me with exactly zero dollars for food, snacks, or hanging out with any of my friends. Is the music really worth being totally broke for four weeks? I am starting to think I need a much better plan than just spending it all at once!Liam, you just hit on the most important part of budgeting. It is all about distinguishing between needs and wants. A need is something you absolutely must have to survive or function in your daily life. For a high school student, this usually includes things like healthy food, basic clothing, transportation to get to school or work, and even your phone plan if you use it for your school assignments or for safety. A want, on the other hand, is something that would be nice to have but you could definitely live without if you had to. Those headphones are definitely a want. They are cool, and they sound great, but they are not a necessity for your survival. When you put your needs first, you ensure your life runs smoothly. When you put your wants first, you often end up in a financial emergency!Maya is totally right, but it is not always a simple black and white choice. Sometimes our individual values and our long term goals make things a bit more complicated. For example, if your goal is to be a professional musician or a sound engineer, maybe those headphones are actually a tool for your education. That is why everyone’s budget looks different! Your values are the specific things that are important to you. If you value independence, your primary goal might be to save up for a used car. If you value your education, your goal might be to save for college tuition. As you grow up, your goals will change. What you wanted when you were thirteen is very different from what you value now that you are in high school. Your budget is the tool that reflects those changing values as you get older.Let us look at how to put all of this into a real, working budget. A budget is simply a plan for your money. It tracks your income, which is the money coming in, and your expenses, which is the money going out. I highly recommend using a simple table or a digital spreadsheet. You always start with your total income at the very top. Then, you subtract your fixed expenses. These are the things that cost the exact same amount every month, like a phone bill or a streaming subscription. Next, you set aside money for your savings goals. This is often called paying yourself first! Finally, whatever money is left over is your flexible spending for your wants and fun activities. If the math does not add up, you have to make a hard choice. You either need to earn more money or spend a lot less on your wants!Now, let us look at the pros and cons of keeping a strict budget. We will start with the pros because they are very motivating. Pro number one: it significantly reduces stress. When you know exactly where your money is going, you do not have to worry about your card being declined at the store. Pro number two: it helps you reach your big goals much faster. You can actually see the progress you are making toward that car or that summer trip. Pro number three: it builds great habits that will last your entire life. Now, for the cons. Con number one: it takes a lot of discipline. You have to be honest with yourself and record everything you spend. Con number two: it can feel a little bit restrictive at first. You might have to say no to a concert because it simply is not in the budget this month. Con number three: it takes time to set up and maintain. But believe me, the peace of mind is worth every single second of effort.I am finally starting to see how this all works together! If I look at my four hundred dollars again, I can prioritize my needs first. Sixty dollars for my phone and forty dollars for my bus pass. That adds up to one hundred dollars. Then, I really want to save for my goal of buying a car, so I will put one hundred dollars into my savings account right away. Now I still have two hundred dollars left! Instead of buying the three hundred dollar headphones today, maybe I can save fifty dollars a month for them. That way, I still have one hundred and fifty dollars for fun stuff this month! I am still getting what I want, just in a much smarter way that does not leave me completely broke. It honestly feels like I am taking charge of my own life for the first time!That is exactly the right spirit, Liam! That is what we call a solid financial strategy. One great tip for high school students is the fifty, thirty, twenty rule. This means fifty percent of your money goes to your needs, thirty percent goes to your wants, and twenty percent goes to your savings and your future goals. This is a simple way to keep your life balanced without overthinking all the math. Another great tip is to use a budgeting app on your phone. It makes it so much easier to track your spending while you are on the go. And tip number three: always try to have a small emergency fund. Sometimes life just happens, like your phone screen breaking, and having a little extra cash saved up can turn a total disaster into just a very small bump in the road.We also want you to think about how your community and your family affect your personal budget. Sometimes, your family might have goals that you are a part of, like saving for a big family vacation. Managing your resources is not just a solo act; it is a skill that helps everyone around you. When you are responsible with your own money, you are actually helping your family reach their collective goals too. It builds a lot of trust and shows your parents that you are ready for even more responsibility as you get older. This is a huge part of becoming an adult. You are showing everyone that you can think ahead and that you care about the long term impact of the choices you make today.We want you to feel incredibly motivated because budgeting is actually a form of freedom. It sounds like it is all about strict rules, but it is really about giving yourself permission to spend on the things that actually matter the most to you. When you have a solid budget, you do not have to feel guilty when you buy something fun because you already know the bills are paid and the savings are tucked away safely. It is the ultimate way to be kind to your future self. You are taking the stress out of your life and replacing it with a clear plan for your future success. That is an incredibly powerful place to be!In this video, we have covered all the basics. We distinguished between needs and wants. We looked at how your personal values and your goals change while you are in high school. And we saw how to set up a simple budget that balances your income and your expenses. This is the foundation you need for everything else we are going to learn. But we know that life does not stay exactly the same forever. Things change! You might get a raise at work, or you might have a big surprise expense. In our very next video, we are going to show you exactly how to modify your budget when life throws you a curveball. That is where the real skill of financial management comes in!To get ready for that next step, make sure you go and read the lesson text for this section. It has a great activity where you can practice identifying needs and wants in different real life scenarios. You will also see some very detailed examples of how a student’s budget changes from ninth grade all the way to twelfth grade. Understanding these patterns will make you a total pro at planning for your own future. Take the time to really think about your own values and your goals while you read. What do you want your life to look like in three years? Your budget is the map that will help you get there!That is exactly right! Go and read that lesson right now. I am going to go update my savings goal for that car! I am feeling really pumped up to make my money work for me. We are all so proud of you for taking this very first step toward financial literacy! We will see you in the next video where we will learn how to handle changes and keep our budgets on track no matter what happens in the world! Stay smart with your spending and always keep those big goals in sight! Goodbye for now, everyone! We will see you soon!