8 Smart Ideas to Save Money as a Teenager
Teenagers are natural spendthrifts but finding one who wishes to learn how to save money as a teenager is commendable. To this effect, we will be highlighting a few steps needed for youths to successfully manage money.
Most parents are usually proud of their children whenever they find out they wish to become great investors and managers by saving very little amounts.
We also appreciate this and would want to help these intelligent teens grow financially. To this effect, we have ideas on how best we can help them save from very little amounts.
How to Save Money as a Teenager
As a young adult who wants to save money for more profitable purposes, you should understand the best way to start is to remain disciplined and determined. However, here are some other tips and ideas that would help you meet up:
1. Establish Clear Goals
Set achievable saving targets when planning for long-term or short-term goals and don’t be unrealistic or exaggerate things. Also, have more short-term goals than long-term which could encourage you as you achieve them.
2. Separate Spending From Savings
Clearly separate between money for immediate expenses and savings accounts purpose to prevent unnecessary purchases. Most times, you are moved to buy things just like your colleagues, for you to have your 2 wishes, separate spending from savings, and maintain it.
3. Open a Savings Account
By opening and using a savings account to manage your finances and save money often, you are sure to gradually save up a huge sum of money in a very short time. If possible, set it such that you can’t withdraw except in critical situations or set a time frame.
4. Monitor Spending
It isn’t as technical as it sounds but tracking expenses is a must to identify areas that can be saved. You can use apps or jotters and books to write them down and manage finances effectively.
5. Start Budgeting
You should also specify a certain amount of profit or allowance you will save each time you get the money to enable you to grow your account faster. Depending on your needs and wants, you can plan as low as 30% of your allowances every month.
6. Avoid Frivolous Buying
Think several times before buying something being sure that what you buy is a necessity or has great value to you rather than just buying or spending money on something that won’t give you value.
7. Explore Online Banking
Use online banking features such as higher interest rates, get nice offers, and use their saving plan options to increase your chances of making good money while saving.
8. Learn More About Savings
Learn how to budget, invest wisely, and plan on your own with the variety of online resources, books, or courses that will help you have exceptional money management skills. There are a lot of free course materials and lessons on Coursera and other online educational platforms.
Why Should I Save Money as a Teenager?
Most young adults usually leverage their parents’ wealth and see no need to save money or try to become independent. But, there are needs to save personally as an individual. For teens here are a few ideas why you should get involved in early savings.
1. Financial Freedom and Stability
No one loves being a burden to another even though it might be your parents’ duty to assist you financially. Through this, you can become financially independent and assist or take care of yourself without waiting for your parents or guardian.
2. It Helps You Become Economically Alert
The fact that most children don’t understand the cost of items or how expensive things are makes them abuse things. But for you who save money, you consciously value everything you own or have and understand the financial consequences of losing it.
3. You Become Cautious of Unplanned Expenses
You should save because you won’t want unforeseen expenses to become a problem for you. This often happens when an urgent need for cash arises, through your savings you can pay the bills without assistance or going broke.
4. Help Reduce College Costs
Everyone knows how college expenses can affect and distort most students’ academic years. But, if you can save up and these college bills come, you will have a backup to push you through the tough wind.
How to Build Healthy Money Habits
Starting to save money, setting goals, and regularly putting money aside, all require effort and consistency. That being said, other ideas will help you push further and stronger.
1. Start small
2. Avoid perfectionism when you make mistakes
3. Be accountable
Parents and guardians can also promote saving and relay valuable money lessons to their teens. They also have some part to play and help these youngsters dreams become realistic. These starts by:
1. Start a savings account with your teen
2. Encourage them to work
3. Teach them how to set money goals
4. Help them learn where to spend their money
You could assist your teen in monitoring expenses by showing them the amount that he takes home after taxes, and the monthly expenses that he has to pay. So you will jointly work out your budget.
A twenty-year-old should save at least 20% of their money from a paycheck. Open a savings account and transfer to it a reasonable amount of money each time he gets paid.
The remaining amount of your money needs to be in a checking account that he can withdraw whenever he needs it. You need this to set aside a portion of your income for your basic needs. These costs depend on your age.
13-Year-Old – 80%
14-Year-Old – 70%
15-Year-Old – 70%
16-Year-Old – 50%
17-Year-Old – 50%
18-Year-Old – 30%
19-Year-Old – 20%
Teenagers should match their monthly checks and expenditures, organize spending by categories, and decide on a monthly credit percentage.
Budgeting is a great tool for monitoring your outgoings and savings target, which in turn means financial accountability and also good money management practices.