Are you a teen looking to save money? I get it, you want to purchase your next video game, favorite tee shirt, or a movie ticket – we've all been there!
But how do you save money as a teenager?
While it might seem like a challenge, there are plenty of ways you can save money so you can have the money you need.
In this post, I'll explore how to save money as a teenager, financial lessons to help you master your finances, and much more. Let's get started!
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Best Ways to Save Money as a Teen
As a teenager, your first instinct when someone hands you money is to satisfy your spending habits. As tempting as it is to purchase new clothes or a video game, there are some things you may not be aware of when it comes to your personal finance decisions.
Below are some of the best ways to save money as a teen!
Open a Savings Account
At this point, you may not be at the right age to open up a checking account by yourself. You will learn how to manage one and know the basic ins and outs such as writing a check, how to balance a checkbook, and everything in between.
Depending on the bank where you open it, it won't take a lot of money to open a savings account. You can expect a minimum balance of as little as $5 or even $10 in most financial institutions. You don't need a lot of money to open one from the start – which is a great thing for many teens.
Once you have one all set up, you'll want to focus on your savings goals. Set goals for every day, week, or month and make sure that you stick with them for the long-term.
You'd be surprised how much can add up over time if you keep saving and not so much touch the money that's in the account. Your monthly savings will grow exponentially and can be a great asset for your financial future.
Now, the question you are probably asking yourself is: how can I save money when I don't have a source of income? That's a good question to ask. And we'll be happy to answer that right now.
Set a Budget for Your Money
Having a budget will separate you from those who have a habit of impulse buying from those who want to save up for that first car or other financial goals.
Sit down with your parents and plan out everything including your income and necessary expenses. How are you planning on earning your income?
Will the cash be in your hand or are you planning a direct deposit into your account? This is something to determine where your money goes every time you earn it.
Furthermore, what are your current expenses? What expenses do you see upcoming that might need to be added to your budget?
It's important to plan and categorize your expenses so you know how much money goes and where it goes.
For example, you can set a certain amount of money can go towards miscellaneous expenses and another towards expenses like gas or car insurance.
Learning how to set a budget will teach you which expenses you'll be spending on now and what you'll likely be spending on in the future as an adult. As a teenager, learn what kind of expenses are considered necessary and unnecessary.
Learning about this budgeting isn't as complicated as it might seem. It boils down to income and expenses. If there has been an increase or decrease of either, you'll know when to make adjustments to your budget.
One of the easiest ways to start budgeting is by using a budget printable template. These can help you easily stay on track with your money.
Related: 70 Cheapest Foods to Save Money
Find Better Deals
Teenagers like you are not the only ones that should be saving money. Your parents and other adults are looking to do the same thing. Who's to say that we blame them?
If you want to save money without spending a lot, find excellent deals when and where possible.
There may be places that offer student discounts. All you need to do is show your student ID and you will get that discount on each purchase.
Also, shopping around during sales and promotional periods can be a simple way to save money without a ton of effort.
However, be careful when shopping for cheap items. Sure, it's easy to go for the cheapest option just to save money. But going that route can actually be a problem.
The cheapest option may be poor in quality. Likewise, the best quality items will be expensive. So meet in the middle and find the best quality that fits your budget.
This goes for clothes, vehicles, or pretty much everything you buy be it in-store or online. If you go for the cheapest option and it wears, tears, or breaks, you'll be spending more money on something else.
Consider Using a Debit Card
Cash is fine to have in your wallet. However, many people are using debit cards these days. It's all part of just going cashless.
Not to mention, paying with a debit card is usually faster because you don't need to count cash and hold up the line. Likewise, it may be time consuming for a cashier to count a large wad of cash that is given back to you in change.
If you are using a debit card, you can learn how fast transactions can be completed. It can also be useful for when you are purchasing items online and make it easier to budget your money.
Never give your debit card or financial information over the Internet if you are not familiar with them. If you are a parent, teach your teenager about the dangers of online scams.
Consider a Credit Card
While credit cards are't known to be a savings tool by any means, they can be a great asset to help you.
If you have strong money management skills – using a credit card can be an excellent way to earn free money through the rewards and offers that the card provides.
It's important to know yourself and whether or not you are disciplined enough to handle a credit card before applying.
Think Twice Before You Spend
Yes, spending our hard earned money as a teenager is tempting. Yet, it can also lead to financial trouble on the road if we are not careful. So it's important to know the difference between the things that are really worth spending from the ones that are not necessary.
Yes, it's good to reward yourself from time to time by spending money on whatever your heart desires.
But it takes real discipline to say ‘no' to the things you want to spend money on. It may be a once in a life time opportunity or it may be something that will be there in the future.
Let's fast-forward to five or ten years from now. Is it worth risking a missing rent payment because you have to buy something you want? Is it worth falling short on a credit card payment because you have to get that one thing that will be ‘gone forever' if you don't get it?
Think about it: one missed credit card payment and you won't like what you'll see on your credit report.
It can make the difference between making a down payment on a first car or not.
Practice the art of delayed gratification and it will be a money saving strategy that will just save you not just money but also stress, frustration, and worry.
Continue Sticking to Your Savings Goal
It may sound easier said than done. But you can make it the other way around. If you plan on saving every month, decide on a certain percentage. Set short, attainable goals that you can achieve in a quick period of time.
Set aside a percentage of your funds and be consistent with it. This can be per week, bi-weekly, or monthly. The more you set aside and save, that's going to build up thanks to compound interest.
Start Saving ASAP
This is pretty self explanatory. The sooner you start, the better. Ask your parents to help you set up a savings account that you can build up later.
Even if it's just $5, you have to start somewhere!
Ask Your Parents for Help
Your parents have a better understanding of handling finances better than anyone you might know. Don't be afraid to ask for help if and when you need it.
They will teach you lots of things that you might not even learn in school. This may include balancing a checkbook and understanding bank statements. You'd be surprised what your parents might know about finances (of all the things they teach you).
Harness the Power of ‘No'
When it comes to unnecessary expenses, it's important to say ‘no' to them. It may be hard to do, but your bank account and your future self will thank you later. If it costs a hundred dollars and you have ninety, it may have to wait.
Go to Places that Offer Student Discounts
If you know any places that offer student discounts, go there and make sure you have a student ID handy.
You can save as much as 10% or 20% off your next purchase by asking if they offer a student discount.
Apply for Jobs
There are handful of jobs that you can apply to as a teen. Some will allow teenagers to work and others won't be allowed due to age or any company policies. Apply if they are hiring and follow up with them at some point after submitting the application.
Ask around to see who may hire someone like you. Also, it's important to consider practicing what to say in a job interview so you can prove to employers that you are a reliable worker.
While this isn't necessarily a way to increase your savings, it will help you make more money so you can boost your savings.
Related: How to Make Money at School
Shop When Prices are Low
Whether it's Black Friday, Cyber Monday, or any other day, there's always a good deal that won't cost you an arm and a leg.
If you need to make a larger purchase, try waiting for these days when many items are highly discounted.
Think cutting coupons is for adults? Think again. You can use coupons if you want to save money and get a good deal. It's easy to find coupons for your favorite items online or in the newspaper. Saving money is not just for ‘old folks', you know.
Spend Below Your Means
When it comes to spending, learn how to keep it within or below your means. Anything above that may be asking for trouble.
For example, if you're currently make $1,000 a month, it's not wise to purchase a car that costs $750 per month.
You need to spend less money relative to your income if you want to start saving money faster.
Study Up on Student Loans
If you are planning on going to college, learn about student loans.
They may be very hard to pay off. Plus, you do not want to saddle yourself with a lot of debt later on in life. One good solution is to set aside money for college.
Also, the interest rates that you could be paying on overdue student loans can be daunting. The more financially prepared you are, the better. Another reason why saving is important.
Saving up for school now is better than never. Especially if there is one school you are thinking about attending.
Start a Business
Want to earn money your own way? Start a small business. It can be as simple as doing yard work, pressure washing, or painting.
Invest your own money for any equipment that you need to use. There are plenty of profitable businesses you can start with little money.
Find a business you're interested in and get started!
Adjust Your Budget Regularly
Is your pay increasing? Expenses getting lighter or increased? Know when it's all going to happen so you can adjust your budget accordingly. This can also mean making cuts or additions as well.
Have a Spending Plan Every Month
Have a good idea on what you want to spend at some point in the future? Make a plan and set a financial goal. Have a realistic deadline on when you want to meet it.
Earning Money as a Teen
Without a source of income, what's the point in opening up a savings account to save money in the first place? There are plenty of ways to earn money as a teenager. Depending on your age, your options may vary. Below are some common ways to make passive income as a teen.
Getting Money from Parents & Grandparents
Isn't it nice to get a card from your parents or even grandma during your birthday or the holidays? Yes, it certainly is. It's easy for us to think about the ways on how you can use it.
If you have a birthday coming up and getting money is the norm, then consider putting it in a savings account. It could be just enough for you to meet the minimum balance requirements.
Do Work Around the House
There was a time when as kids, we would earn an allowance. The only way to do this was to do chores around the house. Whether it was doing the dishes or taking out the trash, as long as we got the job done, we were rewarded.
If you are a parent reading this, see if an arrangement can be made for your teenager. If you are a teenager reading this, it may seem like you want a certain amount of money to earn for your deeds. Keep in mind that you'll want to understand the financial situation of your own parents.
They have bills to pay themselves. So they won't be able to pay you the amount you desire. Yet, it should be enough to where you can tuck it away and watch it all pile up in your savings account.
Parents and teenagers should work out a deal to where how much the latter gets paid per week regarding the chores they do.
The more chores you do around the house, the better your chances.
Do Work for Others
As a teenager, you can do work for other people. This includes mowing their lawns, shoveling their driveways in the winter, washing cars in the summer, doing small repairs (if you have the know-how), or any small task that your neighbors may not be able to do.
For example, if you have an elderly neighbor that can't do basic yard work, they might be able to pay someone to do it for them. That's where you might come in. If they pay you, take what they can give you.
If you do tasks for other people such as yard work, it will be a nice introduction to the wonderful world of business. You do a service for them and they pay you for your time. Over time, if you have done a good enough job, people will ask you to do the tasks for them.
A lot of money to a kid may seem pretty daunting. To start doing work for other people, ask around. Ask your neighbors if they need help with any yard work or other tasks.
They'll certainly appreciate that you took the initiative to ask if you can help them out. If they say no, no hard feelings.
Get a Part Time Job
Working as a teen comes with certain precautions. There are many labor laws that an employer will have to follow if you get employed before 18 years old.
However, it depends on the type of job you are doing. A person in your neighborhood can offer you a one-time or recurring job to do one certain task. An employer will offer you a job that involves various tasks.
Employers are beholden to certain labor laws where they cannot employ anyone below a certain age. This is due to several factors including safety reasons. The labor laws in your state such as the minimum age to work with a permit will vary.
If you are a parent, research your state's labor laws to see if your teenager meets those requirements. If you are a teenager yourself, you'll want to understand that some jobs will be limited to people your age.
For example, anyone under the age of 21 may not be able to work as a cashier at a convenience store. The reasons for this involve the laws regarding the sale of alcohol and tobacco.
Most teenagers will usually start out at fast food restaurants or work in a kitchen at a restaurant. There may be other job opportunities that you can take on as well. You or your parents can do a bit of research on what the minimum age requirement is to work at a certain job.
Also, understand that in accordance to labor laws, you will need to work a set of hours. You can work after school hours or on weekends. If you are on school vacation, there may be exceptions on when you can work. Be sure to inform your employer above the amount of available hours you are interested in working
Once you land a job or side hustle for any teenager, you can now get paid the rate that is set by your employer. It'll usually be minimum wage or above (depending on the state you live in and the job you work). This will give you the opportunity to save money as a teenager on a regular basis.
How Much Should a 14 Year Old Save?
The rule of 10 applies to the same whether you are 14 or 24 years old. Set aside at least 10 percent of what you earn. Keep it in a savings account that has little to no maintenance fees (if you can).
How Much Money Should I Spend Per Paycheck?
If you are earning a paycheck through your job, you'll want to save at least 20 percent if possible.
You can make arrangements to direct deposit this amount each time you get paid. This will automate your savings so you don't have to do it manually all the time. It's easier to save money if you can find a way to automate it.
How Can I Buy a Car as a Teenager?
Knowing how to save money as a teenager can also mean exercising your purchase options. You may not be old enough to secure a car loan. Or have the responsibility to be saddled with debt. So it's important to consider your options.
You can buy a used car that someone in your local area may be selling. As long as you have money saved up you can be able to make a good deal and pay for the car you won't mind driving. It won't be brand new and snazzy, but at least it'll be something that takes you from one place to the next.
How Can I Get My Friends to Save Money?
Tell them the importance of saving money. Plan something that you all can do together at some point later on in life. Whether it's a graduation trip or a summer vacation, let them know that saving money can make the possibilities possible.
It can take so much money to achieve something you all can do together. Hold each other accountable in terms of your savings goal so whatever you and your friends plan can be possible.
Final Thoughts on How to Save Money as a Teenager
Learning how to save money as a teenager can seem impossible, but it's actually easier than you might think.
Keeping your monthly expenses low, utilizing savings accounts to store your money and earn compound interest, and setting a savings goal each month are all great way to help you start saving more and keeping more money in your bank account.