Knowing how to save money as a teenager seems complicated at such an impulsive stage, but it's a trend that's starting to grow around the world. Did you know that more than 6,000 children and teenagers are investing in the stock market through guardian accounts?
That's what a The National News survey says, making it clear that young people are increasingly thinking about the future and their financial planning.
Another survey by a financial institution shows that young people who receive pocket money on fixed dates save five times more than those who receive money sporadically.
In other words, adolescence is an important time to learn how to save and invest your money.
Read on and find out how to develop financial education at this stage of your life to make your dreams come true.
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How to save money as a teenager?
Saving money as a teenager may seem like a challenge, but it's an excellent way to have a balanced financial life in the future and achieve your goals.
Here are some tips to get you started right away.
1. Define your dreams
The first step in learning how to save money as a teenager is to define the dreams you want to achieve and the financial resources you will need.
After all, it's our goals that motivate us to move forward and maintain the discipline to organize our financial lives.
Without these goals, no teenager (or even adult) can save money, because immediate desires always speak louder than the need to save.
With this in mind, set yourself short-, medium- and long-term goals, such as:
- Buying a new cell phone next year;
- Changing my computer in two years;
- Going on an international vacation;
- Doing an exchange program in three years;
- Buying a car when you turn 18;
- Living alone for five years;
- Buying a house in 10 years.
Don't be afraid to set ambitious goals, because anything is possible when you plan and save regularly.
2. Save part of what you earn
An essential rule for a healthy financial life is to always save part of everything you earn.
This means, of course, that you should spend less than the money you have available – a lesson you should take with you for life.
Ideally, you should save at least 20% of your pocket money and other income every month.
Only then will you be able to save enough money to achieve your goals and avoid the dreaded debts in the future?
3. Controlling consumerism
Adolescence is a period of life when we feel a great need to consume, whether it's to satisfy personal desires, demonstrate status, or be accepted in a group, for example.
However, excessive consumerism is the number one enemy of financial health. That's why you need to avoid pitfalls such as impulse purchases, irresistible offers, and trendy products that exceed your budget.
The key is to think about how today's wrong choice can affect your objectives, making your goals increasingly distant.
In this way, you can control yourself and also build a more autonomous personality, avoiding dependence on the opinions of others.
4. Save creatively
Teenagers don't lack creativity. So when it comes to saving money, make the most of this ability and look for alternatives to spend as little as possible on your leisure time and hobbies.
It's worth “splitting” the purchase of food and drinks with friends, preferring to have parties at home, taking advantage of half-price student tickets, looking for free events in the city, keeping an eye out for promotions in your favorite stores, etc.
5. Having a friend and an economic partner
Adolescence is also a time when we want to be together with our friends on all of life's missions. So why not bring the subject of finances into the friendship?
The tip is to have a trusted friend to share your financial goals, share experiences, and talk about money.
This person can also become a “guardian” of your money, warning you when you're about to make an impulse purchase and jeopardize your goals.
As a peer, it's easier to achieve your savings goals.
6. Start investing money
Once you've learned how to save money as a teenager, you need to take the next step: start investing it.
Instead of letting your money sit idle, you can multiply that amount in the long term and make it work towards your goals. This is fundamental to increasing your financial reserve, protecting your purchasing power, and thinking about goals for the coming years.
As children under 18 can't take out banking services, it's important to talk to your parents about opening an account for you and starting your investments.
This also helps the family to talk about money without taboos and to work on financial education at home.
How to save money every month?
Did it become difficult to save money every month when you were a teenager?
Check out our tips for never failing.
Start by building up an emergency reserve
The first step in financial planning is to save money for unforeseen circ*mstances, the so-called “emergency reserve”.
In adulthood, this is used to cover fixed expenses in the event of emergencies, such as losing your job or a medical emergency that makes it impossible to work, for example. In adolescence, it can be a symbolic amount that should be your first savings goal.
For example, you could set yourself the goal of saving US$100 and put that money aside for unforeseen circ*mstances.
This is a way of saving money every month and having the satisfaction of achieving your first financial goal, which will be a great motivation to continue on the right path.
Gradually increase the percentage of savings
If it's too difficult to save 20% of your salary every month, you can start slowly and gradually increase the percentage.
Try starting with 5% and, as the months go by, increase it to 10%, or 15%, until you reach the desired 20%.
The important thing is to have this percentage as a goal and make it a standard in your financial organization.
You can also start a challenge to save money regularly, such as the 52-Week Challenge.
Use a spreadsheet
You'll hardly be able to organize yourself to save if you do all the math in your head.
Everything is simple, graphic, and easy to use so that you can control your finances and have more and more power over your money.
Why save money as a teenager?
Saving money as a teenager is essential for having a healthy, balanced, and prosperous financial life as an adult.
After all, it's at this stage that we can acquire more knowledge about finances and, at the same time, count on family support to organize our budget and achieve our goals.
It's like a preparation for adult life when we'll have our source of income to manage and much more responsibility over our financial choices.
What's more, from an investment point of view, the sooner we start investing, the better. After all, time is an ally of profitability and, in addition, we need to mature our knowledge and strategies of the financial market to increase our earnings.
And how do you earn money as a teenager?
Likely, pocket money won't be enough to achieve your goals when saving money as a teenager.
That's why it's worth following some tips on how to earn extra income:
- Work for a company as a young apprentice (allowed from the age of 14);
- Work as a freelancer on the Internet in areas such as design, marketing, IT, and writing;
- Work as a dog walker, babysitter, gardener, tutor, etc;
- Making something to sell at school, such as sweets, snacks and coffee;
- Producing and monetizing online content, whether through a blog or social media – is one of my favorite ways of earning money as a teenager;
- Selling second-hand items, such as clothes, shoes, accessories, electronics, etc.
You may be interested in the articles below on how to make money as a teenager:
- How to make money on the Internet? 48 ways to earn extra income
- How to make money with live streams and make the most of your time online
Do you have questions or suggestions? You can leave them in the comments!
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