Last Updated on May 29, 2022
Contents
A Guide to Saving Money as a Teenager
Teenagers long for many things. They also have lots of different needs. From clothes to gadgets, to travel and school supplies, the list is long. Teenagers have hobbies and need to socialize with friends. Everything costs money.
With prices constantly rising, you might ask yourself how to save money as a teenager. Getting a part-time job is one solution, but time management would be essential to keeping your school-life balance.
Another idea is to start budgeting. Try to put a little bit aside from everything you get. You might afford that new laptop or expensive bike at the end of the year. This article explores a few methods about how to save money as a teen.
How to Save Money as a Teenager Fast
The key to saving money fast is the same for teens and grown-ups. You can do this by increasing your earnings. Another avenue is to cut down on expenses. You might think these solutions are unsuitable for your age. You don’t have an income yet as you don’t work.
You also don’t have actual expenses such as food or gas because your parents pay for everything. Re-tailor the solutions above to fit your needs. Considering your current situation, here is how you can think about them:
Earnings | The money you get from your family |
Expenses | The money you use for your hobbies |
In this new perspective, the equation starts making sense. Your earning or income is what you get. The money you spend is your expenses. These are the two significant parts that make up any budgeting strategy. Now, let’s delve into two leading solutions to saving money, increasing your earnings and cutting expenses.
Increase Your Earnings
To increase your earnings, you can ask for more money. If your parents offer more, start putting something aside from your new budget each month. The second, more realistic option is earning money. Here are three ways to go about it:
- Get a part-time job
- Do more house chores
- Find a casual gig
Get a Part-time Job
A part-time job is the best solution to earn good money. You could work full-time during the summer holiday and then go back to part-time shifts when school starts.
How do you get a part-time job as a teenager? The same way you will a few years from now. It all starts with research and looking for job opportunities. Start by asking those you know, and expand your search from there. You can do this online or look for help-wanted signs. The options are plentiful. Some of the most common include:
- Waiter or barista
- Shop assistant
- Newspaper delivery man
- Hostess at a restaurant
- Housekeeper in a hotel
Besides money, a job brings many other benefits. A job, even a part-time one, adds substance to your resume. It helps you become more responsible and understanding of the demands of working. It can also help you build relationships and improve your social skills.
Do More Chores at Home
Convince your parents to pay you to do chores around the house. These chores can help you save money faster and give your parents more time to relax. Plus, parents usually like to see their offspring at work. It gives them a sense of pride, and most are more than willing to pay their kids to do house chores.
See if this works out well for you. In the end, there’s no better and more accessible place to work than at home. Hopefully, your parents won’t put pressure on you or fire you!
Another advantage is that your house will be cleaner. Your garage will be more organized. Your fridge will always be full. These are all things you can take care of in exchange for a fee. The bottom line is that you’ll make money and contribute to your family’s well-being.
Of course, how much you charge is debatable. Try to negotiate a minimum hourly fee with your parents. This way, you can plan and budget for what you want to buy.
Find a Side Hustle
A side hustle might be the best solution for a diligent teenager because even a part-time or weekend job can cause disruptions if you’re committed to studying. Compromising your studies and good grades for money is not worth it.
Any regular, contract-based job comes with a set of rules. One of them is the schedule. This schedule might stand in the way of your studies. Part-time jobs such as working in a restaurant or shop can be overwhelming. They might drain your energy and prevent you from focusing on your studies.
A side hustle can be a more convenient solution. Side hustles don’t have to be regular jobs with fixed schedules. For example, you can work as a pet sitter. Dog walking can also be fun and profitable. If you’re up to it, you can also babysit. Here are the main steps to finding a side hustle:
- Think about what you want to do.
- Start researching for those job opportunities in your area (online and offline).
- Apply to the options you find, and ask around if someone is interested in those services.
There are all sorts of services you can offer in your community. Think about something you feel comfortable doing. Then, ask around to find something that works for you. It is also how you find more clients once you start providing services. Word of mouth is evergreen. If you do your job right, your earning potential is great. Make sure you add something to your savings account at the end of the month.
Babysitting, tutoring kids, or taking care of pets are options. These jobs offer different advantages.
- They are flexible.
- There is no contract.
- You choose when and for whom to work.
- They are less stressful compared to regular jobs.
Cut Down on Expenses
By cutting down on your expenses, we refer to buying less stuff. If you usually spend every penny your parents give you, it’s time to analyze and limit your spending. Of course, you need certain things, like school supplies or shoes, but try to save money when buying non-essentials. For example, you might not need a jacket that costs $100. Instead, buy a $60 jacket and place the remaining $40 into your savings account.
Giving up on some pleasures to save money is not easy, but you’ll get used to it as you grow up. It will help you enjoy financial stability. If you wonder why you can’t save money, start with a spending analysis. Figure out where most of your money goes.
If you use a card, this is easier. You can check out your bank statements. Internet banking tools now help you do this online. If you only use cash, write down things. Every time you spend on something, take notes. You can do this by using apps such as Notepad. You can also do it on paper. Make a simple table like this.
Date | Purchased item | Price |
01.04. 2022 | A mouse | $20 |
07.04. 2022 | A USB drive | $35 |
Track your spending for a whole month to make an analysis. First, see where you’ve spent the most. Next, figure out if this belongs in the wants or needs category. Wants are things you enjoy buying, while needs refer to something you must buy.
You could also use one of many budgeting apps to help you keep track of your spending and reach your financial goals. Some apps to check out in our expert reviews include EveryDollar, Mint, and YNAB.
After you realize where most of your money goes:
- Make adjustments.
- Try to spend less on those items the following month.
- Try to avoid spending all your money by the end of the month.
Otherwise, you’ll never put anything aside. A good rule is to save at least 20% of your pocket money or earnings every month.
To cut down on your expenses, use the 30-day rule. According to this, you’ll wait for 30 days before making any significant purchase. For example, if you want to buy a new pair of sneakers, remember the brand and price. You can also save the link to the product. Then, after 30 days, open it again. Do you still want and need that item? In many cases, people change their minds after these 30 days. As a result, they end up saving instead of spending money.
How to Save Money as a Teenager by Budgeting
There are other strategies to save money. You’ll probably explore many as an adult, such as the half-payment method. Teenagers can start a healthy financial life by budgeting. Here are a few budgeting strategies to help you out.
The 60% Solution
With the 60% solution, you only allocate this amount to your necessities. For example, school supplies or clothes you need. The remaining 40% is your savings and entertainment budget. This strategy’s recipe is only to use 10% for entertainment. That leaves you with 30% for savings, which is a significant share.
The 50-30-20 Budgeting Strategy
The 50-30-20 budgeting strategy involves three budgeting categories: wants, needs, and savings. Allocate 50% of your budget to your needs, 30% toward your wants, and 20% for savings. This method is one of the most popular budgeting strategies out there.
The Envelope System
The envelope system is another well-known budgeting strategy. It involves using real or digital envelopes for your expenses. You start by splitting your budget into several categories for different expenses. You can have as many categories and envelopes as you need. Here is an example:
Envelope 1 | Going out with friends | $150/month |
Envelope 2 | Buying clothes | $400/3 months |
Envelope 3 | Buying gadgets | $500/year |
What matters is to stick to the budget and the timeline. If you’ve used all the money in Envelope 1 in 25 days, you shouldn’t dip into Envelope 3. Only do this if necessary and always put the money back.
This budgeting strategy helps you be more aware of your spending. It also enables you to limit impulse buying and stick to a plan. To save money, you also have to create an envelope for savings. Put something inside each month.
How to Save Money as a Teenager in a Savings Account
A savings account is the best place to store your savings. You’re more likely to spend the cash if you don’t deposit it. You can open this type of account at any bank.
You can also enjoy different perks. For example, some banks offer higher interest rates than others. Study the options and choose the best one. Also, try to avoid high service fees. You can find these details online. You can also ask for this information by calling the bank or going there.
Another aspect to consider is how often you can withdraw your money. It might not be wise to have easy access because it can lead to temptation. A credit union or local bank can be a good option because they make it harder to withdraw money from your savings account.
FAQ
How Much Money Should I Save as a Teenager?
Strive to save at least 20% of what you earn or receive. If you can push further, go for 30%. Make sure you keep this money in a separate account. This way, you won’t mix it with the budget you’re allowed to spend.
How Can I Start Earning Money as a Teenager?
To start making money, you need a job. You can start with a part-time job. A casual gig like pet sitting can also be an excellent choice. Your parents can also pay you for doing house chores.
How Can I Start Saving Money for College?
College fees are hefty. Saving money as a teen can prove very useful. It will help your parents cope with the tuition fee or fix their credit faster. To start saving for college, create a savings account. Try to put 20-30% of what you earn or get from your parents each month.