So you want to save money as a teenager and wonder how to start. Whether you wish to save for college, prom, or even a new iPhone, learning to save is a life skill that will serve you well into the future. If you can master the art of money management right from a young age, it will benefit you for life.
So how can you learn to save as a teenager? Read on to learn some practical methods you can start.
Identify Your Saving Goals
Before you start saving, you should create a savings goal. Having a savings goal will give you something tangible to work towards. When you are setting goals, make sure they are S.M.A.R.T goals.
Smart goals are:
- Specific – for example, let’s say you want to save up for prom. Write it down as your savings goal.
- Measurable – if you are saving towards prom, you can also write down how much you want to save. Then, when you keep the money in a bank account, you can always track how much you have saved and what more you need to complete the savings goal.
- Attainable – Your savings goal should be possible.
- Realistic – your goal should be tangible, not something you will struggle to save.
- Time-based – Let’s say you want to save up within a few months – give it a timeline.
So what examples of savings goals can a teenager work towards saving? We have listed some examples of things teenagers might want to consider creating a savings goal around.
- College accommodation is expensive – when a plan is in place, it makes achieving this goal much more attainable.
- A holiday with friends – Perhaps you want to save towards a holiday with your friends just before college starts.
- Car – You’ve recently learned how to drive and want to get out and about in your car. Saving towards a vehicle will help you gain your independence.
Create a Budget to Track Your Spending
Once you have a savings goal, you should create a budget. A budget will ensure you have enough money to save towards your goal. Without a budget, you risk using up all your money, and if you do so, you will have nothing left to use to save at the end of the month.
Cut Back on Unnecessary Expenses
As you track your spending, list everything you spend money on. Are there any subscriptions you can get your parents to pay for instead?
For example, perhaps you don’t even need to buy an additional pair of sneakers – you can always ask yourself key questions such as;
- Is this a need or a want?
- Can I get an alternative that is cheaper somewhere else?
Find Creative Ways to Earn Extra Cash
You can find other creative ways to make money if you can’t get a job because of school. For example, you can help the neighbors on the weekend with house chores in exchange for cash. These include mowing the lawn and cleaning the house.
If you have elderly neighbors, you can also offer your services to clean up the house and help them do the chores they struggle to do themselves. Of course, you can also do their grocery shopping in exchange for cash.
Open a Savings Account
When you were a kid, your parents might have set up a savings account for you. As a teenager, you can take more ownership and set up a bank account you can access and save money in. However, before going to college, you need to know how to manage a bank account and use it to save, pay bills, and much more.
Below are some things you can gain from setting up a bank account:
- Ensure your bank account gives you access to online banking – so you can track your spending.
- Ensure your bank account has a reasonable interest rate so your money can grow.
- Ensure your bank account gives you good access so you can retrieve your money once you reach your savings goal.
Develop Good Habits Around Money Management
As you save money, you can start developing good habits around money management, which will serve you for life.
Some examples of good habits about money:
- You will learn to prioritize paying for things that are a necessity rather than things you don’t need.
- You will pay bills on time and not get into trouble for missing a payment deadline.
- You will learn to save for long-term goals and be able to save towards owning your own home.
Resist Peer Pressure and Impulse Buying
Do all your friends go to the mall after school? Perhaps this is a ritual that you are used to. However, with your savings goal in mind, you will need to find other ways to hang out with your friends that don’t involve impulse buying things at the mall that aren’t a necessity.
Consider Investing Your Money
Did you know that teenage investors can save for their long-term goals and build generational wealth over many years? You can speak to your parents to help you set up your teenage investment account– they might need to set it up in your name and manage it on your behalf. Investing as a teenager is an excellent way to learn to save towards a long-term goal.
Seek Advice and Guidance from Trusted Adults
As you save towards your goals, you can always learn from the adults around you how they also learned to save. In addition, some things you discover can also help you improve your saving efforts. For example, if your parents say they were able to save money by doing their house chores and getting money from their parents, then they can also help you do the same. Then you can earn money right from home by doing chores.
In closing, if you can master the art of money management as a teenager, this will help you become a responsible adult. You can start saving towards your goals in many ways, and you don’t even need a fancy job to start – you can save by doing creative things at home and helping others in exchange for pocket money.
