Wondering how to save money as a teenager? Or, more importantly, why is it important?
Well, saving money as a teen is necessary to grow up and ensure you make a smooth transition to adulthood with good money habits.
As a teen, you’ll need to figure out what you want to spend your money on. You may want to save for something big, such as a new car, saving money for college, or a vacation abroad.
Or, you may want to set aside enough money to cover small expenses, like a monthly cell phone bill or a weekly meal out with friends. Whatever your reason, the best thing to do is to think about where you want to put your money.
If you don’t have a specific goal in mind, saving money for your future can also be a great start to achieving financial stability in your 20s and having more backup for any financial crisis.
We will cover 5 tips you can use to save money effectively in your teens.
So let’s get started!
1. Open a savings account.
Start your new savings account today, and you’ll always know where to find your money whenever you need it.
Whether you’re under 18 or not, you can start saving money now, and you’ll probably have enough saved up after just a couple of months to pay for your cell phone bill. Most banks offer savings accounts, so check with your parents about where they bank and see if there are any local credit union options nearby.
With a little research, you should be able to find a bank that offers a very high APY (Annual Percentage Yield) along with no monthly fees and minimal requirements. Once you’ve found an account that fits your needs, open an account and make deposits into it every month.
You’ll likely earn better returns if you’re willing to let the money sit for several months before withdrawing it, but you’ll have to research how much you’d lose by waiting versus getting out immediately. To help you decide whether it’s worth it, you might consider looking into the best savings accounts with zero percent APYs or consider online banks.
2. Set a budget
To start saving money, think about what amount you can realistically save each month. As mentioned at the beginning of this article, if you have a set goal in mind, you’ll also be able to determine what you need to save and the timescale of these savings.
The hardest part about saving money (and we know how hard it is) is sticking to it, regardless of age. Fortunately, if you start early enough, you will develop a habit of budgeting and saving by reaching adulthood. So even if you feel like spending impulsively, try sticking to the budget as much as possible!
3. Be wise with your expenses.
If you haven’t yet figured out how much you’re likely to spend each month, try keeping a weekly expense sheet handy; write down everything you spend during the week. Then add up your total expenses at the end of each month.
If you can find a way to cut back your expenses, you’ll have more money to save. Look around the store for items that are on sale. Tell your friends about a movie you’d rather see at home.
And then invest that money into a savings account. You’ll be happy to know you’re saving money without having to sacrifice any fun!
4. Start earning
Things today are much more flexible if you want to earn money as a teenager. You can become an online seller for your art or other products on Etsy, Craigslist, Depop, or any other site where people buy and sell.
Selling items through these sites takes a lot of work, but if you’re willing to put in the effort, you can find lots of success. Freelancing can also fit into your schedule, and you can make some money each month from easy jobs.
If you’re old enough, getting a summer job will also help you save money when needed. If you don’t have any significant plans during the summer break, why not make money instead?
5. Plan ahead for the coming years
The best part about saving money? It’s thinking about your future earnings. Start thinking about how you can save money so you’ll have enough money later. Remember that you should spend money only after you’ve saved it.
You can plan big and buy assets like a car by 22 to maximize your spending potential. Doing things today to save money for your future will help you to stay focused as you begin setting aside cash.
Having a plan in mind will keep you inspired as you set out to reach your financial goals. You’re more likely to get involved when your target is in view. So set your sight on things you want with the money you’re saving already!
Saving money as a high school student can be difficult, especially if you haven’t yet learned how to manage your funds properly. It can also be tough when you’re spending money on things that your friends are enjoying right now.
However, earning money doesn’t take much effort when you think outside the box and get creative. You need to find a way to start saving, even if it’s a small amount each month, to learn better money management early on.
If you already have a goal in mind, you’re already on the right track with these tips. So start saving effectively right from this moment for the future you want!