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Money can give you a sense of freedom.

"Never spend your money before you have it." --Thomas Jefferson, 3rd President of the United States

With money, you can buy your own clothes, perhaps have your own phone, maybe get a car. But debt can pile up fast. One way to avoid debt is to have a budget.

Budgeting Can Help!

This is just an introduction to how much it costs to live. If you still live with your parents, the realities of paying for rent and food probably haven't crossed your mind but here's reality: the best way to deal with debt is not to get into it in the first place. The easiest way to stay out of debt by is budgeting, which is a word that scares a lot of people. You don't have to be one of them.

Budgeting, Why Bother? Trying to live on a tight budget can be depressing. It can turn a usually positive person into someone who feels as though they're stuck in a routine they'll never escape. So what can you do with that little paycheck that won't deplete your dwindling reserves of self-esteem? The truth is that you can't do much, but a few things can make a huge difference. First, prioritize. If you already have bills that are more than you can pay in a lump sum, you're going to have to swallow your pride and work out payment arrangements with your creditors. While it may seem like that $1,000 phone bill must be paid off immediately, the fact is that if you get behind on your other bills in order to pay one huge bill, you'll just get in worse credit trouble. Don't panic. Call the credit office at the phone company and you'll find out that they won't turn off your phone if you pay a certain percentage. Remember that you are not the first person who has ever been in this situation. Companies that offer credit are familiar with your plight and can help you. Don't be too proud to call and ask. After all, you will most likely never meet the person you speak to on the phone.

Basically, a budget is a plan for how to spend your money. When you make a budget, you list what your expenses are. First, list what you're spending money on every month. A health club membership? Internet service provider? A pager, maybe a cellular phone? How much was your dry cleaning bill? All these go on the list. You'll need to estimate in most cases.

Now add it all up.

Next, look at how much money is coming in, from your job or other sources, and add that. You should have two figures now. If the incoming is larger then the outgoing, congratulate yourself. You're in the black! If you're like most people, though, you have more going out than you do coming in, particularly because you guessed on a lot of things.

The next step is to take a good hard look at the items you listed. You're going to make two lists from the first--wants and needs. It's important to remember that this is your budget, and nobody can tell you how to make it. That's part of the fun.

But I NEED that! 

Your "needs" list should include any fixed bills you have such as transportation, school-related expenses and clothing. Your "wants" list will be more entertainment oriented. The idea is to make a budget you can live with. It can get depressing looking at those hard cold numbers. Debt is even worse, though.

Say it's payday. You're sitting at your desk with a pile of bills, your paycheck, and a calculator in front of you, and the final sum you get (after checking your numbers a few times) depresses you. Not only will you have to turn down the date you have on Saturday night, but you won't be able to buy that new pair of shoes you're drooling over and your car insurance is due. And you're supposed to be saving for college.

It seems like there are so many places for your paycheck to go, it can make you regret you're even getting one. Almost.

Budgeting means gaining control.

Balancing your budget means figuring out where you can economize. Know where to buy things at lower-than-retail prices. Check out your local used CD and book stores, almost every town has at least one and larger cities have lots. Think about buying clothes at thrift stores, consignment shops, or discount stores. You can find good deals if you look for them. A pair of Gap khakis can cost as little as $3.50 at the Salvation Army.

Budget Worksheet Online Consumer Info for Teens Avoiding Debt

Don't let the process get you down. It may seem like you'll never have enough money for all the things you want and you'll waste away alone, badly dressed and eating macaroni and cheese every night. But chances are pretty good that won't happen. Get a handle on your finances now and you'll make sure of it.