How to Save Money as a Teen in 16 Simple Ways

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Being a teen is fun. You’re free to be a kid but have enough freedom to make your own choices. Plus, you don’t have any of the responsibilities that adults have.

That said, while your teens are a great time to enjoy, it’s also the time to start thinking about your future. In a few years, you’ll be off to college. Soon after that, you’ll join the workforce.

This is why it’s very important to start learning about money matters. To help you get started, below are some very useful money saving tips for teens.

I can tell you that I wished I knew all of these things back when I was a teenager. It probably would have given me a very different mindset as far as going to college and living my life.

What I do know is that it would’ve saved me a lot of money.

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Building a Money Mindset from a Young Age – The Most Important Thing of All

Your attitude towards money is more important than you think. It’s what dictates your financial decision making, sometimes even without you noticing it.

It is the reason some people are very quick to spend when they see something they like. And, why other people prefer to be thrifty with their money.

It’s also why you may immediately think about buying something the moment you get your hands on some extra cash.

Like it or not, the way you think about money is influenced by everything you’ve been taught ever since a young age. So, it’s important to notice your tendencies. Do you tend to be spendthrift, overly frugal or somewhere in between? All these behaviors are determined by your experiences with money while growing up.

The good news is, it’s constantly changing.

So, by learning the right mindset, you’ll be more aware of your bad habits and find ways to fix them while learning better ones. These help you save and make more money in the long run.

Here are some ways to start.

Make Saving Money a Habit

A habit is something that you regularly do. You’ve become so accustomed to it that it’s part of your life, to point that’s actually hard to break.

Things like brushing your teeth daily, taking a shower, looking through your email or checking Facebook are all habits that most people have.

One of the best ways to consistently save money is by developing it into a habit. This allows you to instinctively do it without having to think. Because when we need to think about things or remind ourselves, we’re more likely to forget it at times.

In contrast, when saving money becomes a habit, you’ll start setting it aside anytime you get some. This can be from gifts, awards, prizes you win or your allowance. Because it has become second nature to you, you don’t need to try and remember that you want to save some of the money you just received.

Learn About Personal Finance

Personal finance is something I believe that’s truly lacking in schools. I’m not sure why, but almost no school seems to teach a class on it. In some colleges, you even have to intentionally enroll in a personal finance class that’s buried deep in the course catalog.

Learning about money and how to manage it are life lessons that everyone needs when you grow up. And, getting a head start early on really helps.

Things like understanding the value of money, creating a budget, how to use bank accounts and credit cards are a few things that will really valuable to any young adult.

For one, it may aid in lowering the amount of credit card debt that people have. Just to give you an idea, as of January 2019, the average household has over $8,000 in credit card debt. That’s a total of over $1 trillion encompassing 128 million households in the U.S. alone.

That said, if you can find a free personal finance class at your local college, try registering for it. Many non-profits also provide personal financial literacy for their communities.

Of course, there’s also the option of using the Internet.

Websites like NerdWallet are Wise Bread are great for learning about money matters. But, you have to be motivated to search, read and understand the content. This can also somewhat be confusing initially because you don’t really know where to start.

That’s why classes are much simpler. They’ve organized the lessons in such a way that you learn the basics and prerequisites first.

A good alternative place to begin is Coursera or EdX. Both offer free courses on personal finance. They’re short and brief. But, they lay out the basics and outline the topics in a way that you can have a roadmap to follow to do your own learning afterward.

Understand the Difference Between Your Needs and Wants

Spending is a big part of saving money. If you learn how to stop spending emotionally or mindlessly, you’ll go a long way in saving money.

And, one of the best ways to do that is to understand the difference between NEEDS and WANTS.

To explain:

  • Needs are things that are essential. For example, food, shelter, warm clothing for the winter and paying for electricity or transportation costs.
  • Wants are things you desire to have. But, you can live without them. These are things like the latest version of the iPhone, new shoes or merch, and going on vacation during spring or summer break.

The reason why this is important is that you should focus on your NEEDS. And, figure out a way not to give into your all your WANTS.

That’s not to say that you shouldn’t reward yourself every now and then. But, to remember that wants are things you can set aside and live without in order to achieve your main goal. Once you’ve reached your goals, you can then enjoy your wants more.

In this case, your main goal is saving money for the future.

Learn About the Power of Time and Compounding

As kids, we’re always in a hurry.

I still remember wanting to graduate high school when I was a sophomore. And, when I got to college, I wanted to get it over with so I can start my life.

This problem has been made worse by the internet and digital age.

Because now, we can click on something and type in a search and get instant gratification. The same is true with our phones. Chatting and texting make getting in touch so easy that we forget about proper communication.

The thing is, don’t be in a hurry. Time if your friend and make every second count.

This concept works just as well with your money. In this case, you want to make sure that your money isn’t just sitting around earning nothing. That’s what happens for most savings accounts in banks.

Letting your money earn interest is a great way to make it grow without you doing anything. That’s as passive as income gets.

And, this is where time and compounding come in.

Compounding is the process of allowing interest to multiply over time. The longer the time, the more the money will grow.

This is the concept that Warrant Buffett, one of history’s greatest investors and among the richest men in the world, uses very effectively. Very seldom does he sell his investments because he knows that good investments keep compounding over time.

Set Financial Goals

In addition to having the right money mindset and understanding the difference between needs and wants, it’s also important that you have financial goals.

These are the goals you want to achieve financially. Some examples include:

  • Saving enough money for college so your parents don’t have to foot the bill. Or, you don’t have to get a student loan.
  • Making enough cash from your summer job to help your parents pay the mortgage or buy a reward for yourself when you graduate.
  • Saving money to get yourself a car.

That said, it’s important to have short, medium and long-term goals.

  • Short-term goals are those that can be achieved, or you need to do within the next year. Here, you can make 3-5 goals for the next 6 months. And, another 3-5 goals for the next 12 months.
  • Medium-term goals are those that span between 1 to 3 years. These are a bit farther out. But, it helps to have a good idea of what you want to achieve. If you’re a teen, your medium-term goals are likely to be near high school graduation or college.
  • Long-term goals are those that are 5 years or beyond from now. These are a bit harder to think of because a lot can change in 5 years. But, there are a few things like getting a certain type of job, for example in fashion or getting into a cooking school that may already be in your sights. Similarly, you may prefer to start your own business. Whichever is the case may be, it’s important to begin laying the foundation for these goals by obtaining the right skill set, knowledge base and saving enough to afford them. For example, going to culinary school or moving to NY to learn fashion both require savings. Thus, it is a good idea to start early since education has become very expensive.

Always Ask If You Don’t Know About Something

Always ask!

More importantly, don’t be afraid to ask anyone.

I remember being ashamed to ask adults before about things that I was curious about or wanted to know more about.

That was not productive. And, it didn’t help me any. Thinking back, I can tell you that the only person who lost out was me.

So, don’t do what I did.

One of the best things about being a teen is that adults are more responsive to you. The younger you are, the more likely they’ll take time to answer your questions and explain things, as long as you ask nicely.

One thing you’ll learn as you grow up is that the older you get the more people are less likely to give you their time of day without getting anything in return. So, take advantage of it now while you’re young.

Always remember, it’s better to ask someone in the know rather than to try and guess the right answer. That’s because if your guess is wrong, you’ll end up wasting hours or even years doing something incorrectly.

As Michael Jordan, who’s considered the greatest basketball player in history, puts it, “You can practice shooting eight hours a day, but if your technique is wrong, then all you become is very good at shooting the wrong way. Get the fundamentals down and the level of everything you do will rise.”

Bottom line is, don’t be afraid to ask people who’ve already been there and know how to do it. This way, you learn quicker and have the proper foundations for growth.

Ways to Save Money for Teens

Now that you have a better grasp of what the right money mindset is, it’s time to look at home you can save extra cash while you’re young.

Here are some quick ways to save money as a teenager.

  • Use Your Student ID. Always ask stores or food establishments if they offer student discounts. Many do. So, don’t be afraid to ask because you don’t lose anything by doing so. The savings here goes a long way when you add things up.
  • Skip the Mall. Find other places other than the mall or some eatery to hang out with friends. Both places are likely to make you spend when you’re there.
  • Know How Much You Can Spend Before Going Shopping. Being responsible means knowing how much free cash you have. Free cash isn’t the money in your wallet or bank account. It’s how much you should be spending without eradicating the months you’ve spent saving up the cash.
  • Save Loose Change in the Piggy Bank. Don’t throw loose change around or discard them. Pennies, nickels, dimes and quarters can add up. Change from stuff you buy can almost amount to a couple of dollars here and here. Save that cash. And, when your shoebox or jar gets filled, you can go to the bank and change it for larger bills. Bank tellers may frown on adults giving them a sack of coins to change or deposit. But, they’ll happily do it for kids and teens.
  • Bring Water with You When You Go Out. Skip bottled water and bring your own water bottle filled with tap instead. It’s free and it keeps you from having to buy anything to drink. Plus, having your own water makes you skip the soda.
  • Share Meals with Friends. In some instances, ordering bigger food items and sharing them is much cheaper than single dishes. This is why pizza is very affordable.
  • Know When the Sales Are. One of the best things about the internet is that you can keep track of when all your favorite brands are going on sale. Keep a calendar in your phone and mark each date when a brand or store you like holds a sale. This is when you buy the stuff you want, not during Christmas.
  • Save at Least 15% of Your Gifts and Allowance. The first rule in saving money as a teen is not to spend all your allowance. Depending on how much you need and what your savings goal is, you can save anywhere from 10% to 30 or 40% of your allowance.
  • Get a Summer Job. The second rule in saving money as a teen is get a job. Sure, jobs for teens are often low paying. But, it helps you save money. And, you’ll be able to do it on a flexible schedule. Most importantly, you learn about responsibility, showing up and how much work it takes to earn money. Those lessons will help you value money better as a grown up.

Learning to Grow Up

One of the things I did as a teen was to enjoy it too much. By that, I mean that I didn’t think much about the future and growing up. While I did want to get there, I really didn’t know what I’d do when I did, other than have the freedom to make my own decisions as an adult.

That’s NOT a good plan!

Needless to say, DON’T DO WHAT I DID.

Instead, it’s important to start learning to grow up and be responsible financially. That means:

  • Don’t expect your parents to pay for college
  • If you want a car, figure out how to buy one for yourself even if it’s a used one
  • Learn about your interests and what you may want to do after college. Don’t worry about getting it right for now. You’ll have a lot of time to change your mind. The key is to keep it in mind and be aware of it.

The reason things like this are important is that:

  • Time flies very fast. I bet you can still vividly remember what you were doing 3 years ago. And just like that, the next 3 years will pass by as quickly.
  • It takes a lot of time to learn what you want to do in life. And, just as importantly, how to do it. Odds are you’ll need to try and fail a few times before getting it right. So, you might as well start now.

Here are a few things that will help you be a grown up and understand responsibility and accountability.

Open your own savings account

This will let you know where you put the money you saved. It also gives you a hands-on experience on how bank accounts work. Finally, you get to see a running total of how well you’re saving.

Ask your parents for a credit card or debit card

No, this is not a license to spend. But, a lesson in responsibility and accountability. You won’t be able to get own credit card until you’re 21. So, it’s a good idea to ask your parents to make you a dependent.

In my experience, it’s easier to ask mom rather than dad. But, your circumstance may be different.

In any case, having a credit card quickly teaches you self-control especially when it comes to needs and wants. Since you “have” cash to spend, you technically can just charge anything.

But, you shouldn’t, at least not for items you don’t really need.

That’s where mom (or dad) comes in.

She’ll see everything you buy in her (his) credit card statement. This means you’ll be held accountable. One of the lessons about responsibility and accountability I got early on from my mom was me going on a spending spree with her credit card.

When she got the bill, she highlighted the stuff I bought and told me she’ll take those costs out of my allowance over the next few months. And, that I can work to earn extra cash to pay them off too.

That lesson wasn’t just humbling, it was memorable since it took me months to pay off the stuff I bought in a day or two.

But, it’s a lesson I know I’ll always remember.

Pay Your Parents Back for Your Expenses

The credit card lesson is just one way of learning to pull your own weight.

As a kid, you have your parents to fall back on.

Guess what, because you’re a teenager, you’re only going to have a few more years of that left.

The moment you leave for college, you’ll be on your own. You’ll need to know how to make whatever money you have last as long as you can.

And, when that’s used up. It’s time to figure out how to make extra cash to pay for your bills.

For this reason, I really believe that starting out early is a good idea. At least at home, your parents have your back. This lets you make your mistakes without much consequence. Thus, allowing you to learn faster.

One quick and simple way to learn this is paying your parents for things they spend on you.

Don’t worry if you start small, because the true lesson here is to understand the value of money.

It gives you a glimpse of what it’s like to live like a grown up. That is, you’ll have to pay for every item and service that you use.

Track Your Expenses

One way or another, the previous point will lead you to this one.

As you understand more about how much it costs to buy the things you use, eat or enjoy, you’ll start to learn about saving money.

One of the first steps is to limit your expenses.

And, in order to do that, you’ll need to be able to track:

  • What you’re buying
  • How much you’re spending for these things

Tracking your expenses is the first step into truly understanding how much it costs to live as a grown up.

One of the simplest ways to start is to write down everything you spend on. Or, keep the receipts of everything so you can enter them into a spreadsheet. This makes it easier to group them by day, week or month.

In doing so, you’ll have a better grasp of your spending habits. And more importantly, which ones are unhealthy for you financially.

Learn to Create and Maintain a Budget

One of the last steps to learning to be financially responsible is being able to create a budget.

A budget basically compares how much money you’re making or money that’s coming in and how much you’re spending.

Typically, you’ll have a budget for each month.

And, the goal is to make sure that the money coming in as at least as much or more than the money you’re spending. Otherwise, you’ll need to dip into your saving sooner or later. And, when your savings are gone, you’ll have to borrow money to support yourself.

That’s never a good thing!

Start Thinking About College

Planning for college early is important because there are a lot of things to get ready for.

In addition to your SATs and Advanced Placement exams, you’ll also need to shore up your extracurriculars and get ready for writing essays and getting recommendation letters.

Then there’s paying for college.

In an ideal world, you can get scholarships or grants to cover your college expenses.

Then, there’s also your parents.

There’s also the decision between choosing a better but more expensive college over one that’s more affordable, but less known. And, whether you plan on studying out of state which typically costs more than remaining home for college.

As your last resort, and I really stress the part about being the “last resort”, is student loans. Try as much as possible to find ways to avoid racking up a lot of student loans. That’s because they’re hard to pay off. And, they’ll never go away, even after you declare bankruptcy.

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