Getting used to saving money as a teenager would do you a lot of good. In fact, in a world where financial stability is a major goal for everyone, your ability to save and manage your money effectively and efficiently, even as a teenager would pay off. Hence, the purpose of this post is to duly educate you on how to save money as a teen, especially if you already have a source of income.
You will learn some of the best strategies most teenagers employ to save money, achieve their financial goals, and become financially responsible.
How Can I Save Money Effectively As A Teenager?
You can start saving money effectively as a teenager when you automate transfers to your savings account. If you are old enough to own a bank account, your financial institution can help you set up the automation process. This makes more sense when you have a stable source of income.
What To Save Money For As A Teenager?
Some common things to save money for as a teenager include smartphones, laptops, clothing, or even a car. Traditionally, these are common things that an average teenager has. You can acquire them as well by consistently saving your hard-earned money.
How Much Money Should A Teenager Save?
Ideally, saving at least %10 of your income is a general rule recommended by financial experts. As a teenager with a steady source of income, your parents can help you set up a savings program where %10 of your earnings will be automatically sent every month.
Importance Of Saving Money As A Teenager
There’s no denying that there are numerous benefits of knowing how to save money as a teen. In case you’re still skeptical that saving money is an important practice for your finances, here are some things you should know:
- Financial Skill Acquisition
Mastering savings is a must-have financial skill that you should not disregard. From building long-term wealth to achieving your money goals, saving money effectively is one of the main prerequisites for bringing your goals to fruition. If you don’t have any reasons to save money as a teenager, begin with knowing that you can’t survive adulthood if you lack the skill of saving money.
- Self-Reliance And Independence
As a teenager, it’s crucial to build a sense of self-reliance or independence even if you’re still under the care of your parents. By purchasing certain things with the money you have saved, you will feel more confident and learn to be responsible.
- Discipline And Sensible Spending
Developing a good savings habit will encourage you to be disciplined and cautious about how you spend money. This means that when you practice the habit of savings over time, you will be able to distinguish between wants and needs, thereby instilling discipline in yourself. This would make it easier for you to avoid impulse buying and get used to making smarter spending choices.
More importantly, a good savings habit will definitely teach you to recognize the value of money. Like your parents who save relentlessly to build a college fund for you, you will understand how valuable money is and the goals it can help you achieve.
- Preparation For Adulthood
It makes a lot of sense to have an idea of what adulthood is like even before you literally become an adult. Saving money teaches you a little bit of what most adults experience financially. You will learn patience and the importance of delayed gratification.
By becoming an adult, you will be well-informed and prepared to face typical financial drawbacks. Reaching your money goals, preventing waste of money, and developing good money habits won’t be a new experience for you anymore. The time you spent learning how to save money as a teen must have given you insight into these areas.
- Achieving Financial Goals
It’s impossible to achieve financial goals without saving money. This is because the amount of money needed to bring a financial goal to reality won’t be sitting in your bank account from the onset. You need to take some time to gather that money, which must require you to embrace a good savings habit. Apparently, when you know how to save money as a teenager, achieving financial goals becomes much more feasible for you.
For example, if you want to purchase a laptop worth $2000, saving $200 every month will make that goal achievable within 10 months.
7 Tips On How To Save Money As A Teenager
If you want to get started with saving money, here are the tips that should guide you:
1. Create A Savings Account
The first step to saving money is to create a savings account with a reputable financial institution. When you aren’t earning much money, you may feel unmotivated to put any case in a savings account. However, that’s not enough reason for you to quit saving. In fact, the habit of saving money is not reliant on how much you actually save, but on how consistent you are.
When you have a savings account, a certain amount of money can be transferred to your savings account weekly or monthly. It all depends on your cash flow. Another reason you need a savings account is that you can earn interest on your savings.
For example, some financial institutions create an opportunity for people to save money consistently (no minimum deposit required) within a specific time, after which interest would be earned on the investment.
This can be a huge encouragement if you want to learn how to start saving money as a teenager.
2. Separate Savings From Spending
You need to genuinely define your savings goal if you must succeed. Be disciplined enough to avoid spending the money you’ve reserved for your savings account. There are expenses you can’t avoid even if you are still taken care of by your parents. Nevertheless, don’t tamper with your savings when you run out of cash.
Spending your savings on irrelevant expenses will crush your goal. It’s one of the common mistakes you must avoid when trying to understand how to save money as a teen.
To prevent this from happening, you might want to budget your money, especially when you have a stable source of income. As soon as you receive your take-home pay, build a comfortable budget that allows you to spend your money wisely and achieve your savings goal.
If you want to learn more about budgeting, here is a post that teaches you how to budget your money in 5 simple steps.
3. Track Your Expenses
Saving money becomes easier when you always keep track of your expenses. You must have a record of your spending so that you can easily figure out whether you are overspending or not.
To keep proper records of your expenses, preserve all your receipts and take note of every purchase by writing it down. When you make this a habit, it enables you to guide your spending. Tracking your expenses can also help you avoid wasting money.
More importantly, you should consider this as one of the tips on how to save money as a teenager because it teaches you financial discipline. It shows you the importance of being cautious with your spending in order to prevent things like impulse purchases and failed money goals.
If you aren’t used to the old-school style of writing down your expenses, there are several apps on the internet that can help you monitor your expenses.
For example, Fetch Rewards is a simple app that lets you snap a photo of your receipts and record whatever you have purchased.
4. Use Your Student ID
Although you probably haven’t thought about this yet, using your student ID is one of the best money saving tips for teens. Aside from identifying yourself as a student, your student ID can help you cut down costs and save money on some specific purchases.
For example, using your ID card can get you up to 10% off at Charlotte Russe, Urban Outfitters, and some other retailers. Getting discounts from these stores can save a ton of money, especially if you regularly patronize the stores.
Moreover, this means you should always ask for a student discount anywhere you go. Some businesses don’t openly advertise their student discount offers but would definitely offer them to you if you ask. This strategy is worth trying if you are still figuring out how to save money as a teen.
5. Get A Job
Saving money can be very difficult when you don’t have a stable income source. From lawn mowing to dog walking, you can do many traditional teenage jobs to make a decent amount of money weekly or monthly. Even if you’re still in high school, you can still make money. There are several after-school jobs that can provide teenagers with a source of income.
If you are looking forward to getting a job as one of the ways for teenagers to save money, there are some factors you need to consider. Firstly, you must decide if you want a work-from-home job or employment that would require you to leave your home every day. Also, you should not choose a hectic job that will drain your energy without offering you much.
If you have no idea which job to apply for as a teenager, check out this post that has compiled a list of the best highest-paying teen jobs.
6. Talk To Your Parents
Learning how to save money as a teen won’t be easy. Sometimes, it’s best you talk to your parents about your savings goal. Your parents are full-fledged adults who know much about handling money, unlike you, who are inexperienced. Tips from your parents may help you stay on track and hit your goal as soon as possible.
On the other hand, if you need financial assistance, your parents can be supportive by contributing to your weekly or monthly savings.
This is one of the easy ways to save money as a teenager, especially if your parents are impressed by your decision to start saving money. In fact, asking parents for financial support is a brilliant strategy for teens who don’t have a source of income. You can consider it a beneficial tip on how to save money as a teenager without a job.
7. Spend Wisely
If you are spending recklessly by indulging in impulse buying, saving money would become a far-fetched goal. You must understand that the moment you decide to start saving, you must learn to be frugal. By adopting a frugal lifestyle, you will simply live below your means and reduce your spending drastically.
A common strategy that can help you save money is splitting costs with your friends. For example, buying magazines, books, and planning tips are expenses that one person shouldn’t cover. As long as you and your friends share the same interest in these things, you can share the bills as well. Besides, this will help everyone to save money, not only you.
Moreover, collecting gift cards and coupons is another strategy on how to save money as a teen. If you are no longer interested in using your gift cards to get any item, you can resell them and save money.
Final Words: How To Save Money As A Teen
Getting started with the habit of saving won’t be an easy feat even if you already know several ways to save money as a teenager. You would need to develop a great level of self-discipline and commitment in order to pull through.
Also, make sure your circle of friends is supportive of your goal. Hanging out with friends who are fond of splurging money on clothes and weekend trips would be a huge distraction. This won’t help you learn how to save money as a teen. Your friends’ lifestyle should inspire your objective rather than discourage it.
Pin this for later!
