How to save money as a teenager: 9 ways to start saving money as a teen. Learn to make money, save, and invest it to earn compound interest.
If I was educated about money when I was a teenager, I would’ve already been retired by now. There’s no way I would have worked past the age of 30.
Unfortunately, though, I didn’t start learning about money until I was 25.
I had to educate myself about it because they don’t teach you about money in school. In fact, they charged me over $23,000 for my education, and then they made me pay interest on it.
Furthermore, the education system thinks learning things that will never be applied in real life is more important than learning about money. I don’t get it.
The good news is that the internet changed the game. It made it possible to self educate.
Because of the internet and a few great books, I was able to teach myself about saving money and investing.
Additionally, smartphones made banking and investing accessible to everyone. So, now it’s possible to start managing your money at a much younger age.
In this post, I will show you how to save money as a teenager.
If you take these tips seriously and start saving and investing money now, it’s possible that you will be financially independent by 30.
Let’s get started.
How To Save Money As A Teenager
How To Save Money As A Teenager
1. Offer To Work Or Do Chores For Family
The main problem for most teenagers is that they are either too young or too inexperienced to work.
If that’s the case, one option to consider is offering to do chores in exchange for money.
Of course, not every parent is willing or able to pay an allowance for chores.
If that is not available to you, another option to consider is trying to work for someone you know that owns their own business.
When I was a teenager, I was fortunate to have a father that owned a small business. It was a painting and decorating business. During the summers, I was able to work for him to make some extra money. This was before I was old enough to get my own part-time job at 15.
Unfortunately, I didn’t know how to save money as a teenager so I saved nothing. But it was still a good way to make a little money here and there for spending.
2. Get a Part-Time Job
The best way to save money as a teenager is to get a part-time job.
It will help you build experience for your resume early, and it will provide cash flow to save.
Even as a teenager, I desperately wanted my independence.
Frankly, I valued money more than school even back then.
So, I got a part-time job as soon as I possibly could so I wouldn’t have to rely on anyone.
I had to work some evenings after school and on weekends. But I had endless energy back then so it didn’t bother me.
To be more specific, my first job was working as a dishwasher at a restaurant. I made $6.85 per hour—can you believe that?
My bi-weekly pay checks were approximately $140… I was basically working for spending money.
But I used this experience and started applying for better jobs right away. Within three months, I resigned because I got a job working for a large retail chain. I jumped from minimum wage to $8 an hour in a short period of time.
Although it doesn’t seem like much, I was earning a lot at the time for my age. The only problem was that I didn’t know how to save it.
3. Pay Yourself First (Don’t Spend It All)
The absolute key to saving money as a teen is to not spend it all.
To save money as a teenager, you should pay yourself first a percent of all your earnings. Never spend it! Put it in a savings or investment account.
This was my main problem as a teenager—I spent every dollar I made.
Because I had no idea that I could invest money and it would make more money, I wasted most of it on clothes, restaurants, and on outings with friends.
If I could go back, I would have paid myself a portion of all my earnings first.
Even if you only save a small amount, it’s still worth it because you have so much time before retirement.
At the very least, I would recommend saving 10 to 15% from every pay check. This is my best advice for how to save money as a teenager.
4. Don’t Waste Money On Being Cool
In the grand scheme, you will only be a teenager for a short time of your life.
To put it bluntly, most of what you care about right now won’t matter when you are 30.
Things like having the latest fashions, smoking cigarettes, or being associated with the “cool kids” won’t matter.
Matter of fact, the people that you think are cool now will probably grow up to be the least successful people you know in the future.
I’m not saying to avoid being a teenager completely. It’s the perfect time to make mistakes and figure yourself out.
Just don’t prioritize spending money to be cool. It will get you nowhere.
If you must buy the latest fashions to fit in, try to do it within reason.
5. Open A Chequing And Savings Account
Believe it or not, many full-grown adults don’t know how to bank properly.
Many adults don’t realize that chequing accounts are for spending, and savings accounts are for saving money.
It seems pretty obvious, right? It probably seems obvious to most teenagers because they are smarter than previous generations, since they have access to more information via the internet.
Anyways, to save money as a teenager, open a chequing and savings account to separate your money.
This way, you can put the money aside that you pay yourself first. Keep it there and never spend it. As soon as you are old enough, you can put your savings into investments that will grow your money.
By opening separate accounts for spending and savings, you will learn how to bank properly, and you will get in the habit of saving a portion of your earnings.
6. Educate Yourself On Investing And Start Investing ASAP
To get your money growing for you, you should educate yourself on investing and start investing as soon as you are legally able to.
The greatest advantage of all for teens is time.
If you start investing at the age of 18, you will have a tremendous advantage in life. You will likely end up very wealthy. Furthermore, you will probably be able to retire by 30 to 40 years old if you want.
As such, you should start educating yourself on the different types of investors and investment options available.
As soon as you are legally able to, move the funds in your savings account into investments that will grow your wealth.
7. Find Ways To Motivate Yourself To Save
Of course, not everyone is motivated by saving money and investing.
I am lucky that my hobbies, blogging and investing, make me money.
But if you are motivated by other things, you should find other ways to motivate you to save.
For example, save money to start a business if you have an entrepreneurial mind.
If you love school, save for school to avoid student loan debt.
Alternatively, if you are interested in the latest technology, make it ok to reward yourself.
Just remember to pay yourself first and keep your savings separate from your spending money.
8. Blog Or Find Ways To Make Money Online
If I was a teenager in school, I wouldn’t even be thinking about school nowadays.
I would do the bare minimum to pass and graduate, but I would put all my free time towards blogging and side hustling.
It is totally realistic to turn blogging into a lucrative career in 2021.
If you have the skillset, and you probably do because you are a technology-savvy teenager, you should blog, vlog, or find other ways to make money online.
Take advantage of the greatest era for side hustling in human history.
If you study history and consider how hard it was to start a business in 1800 compared to 2021, we have it remarkably good.
Start building your platform now. You never know, it might lead to extra money, or it could end up being your full-time career in the future.
Related article: How To Blog Successfully (in 2021) 8 Blog Tasks With The Highest ROI
9. Learn About Compound Interest
Need some extra motivation to save?
Do you really want to know how to save money as a teenager?
If you do, then play around with a compound interest calculator to see how rich you can be if you start saving and investing early.
Since you are a teenager and you have so much time before retirement, even a small amount of savings will turn into a lot in 40 years.
For example, in 40 years (based on historical performance).
Check out this compound interest calculator to find out how wealthy you can become.
How To Save Money As A Teenager – Final Thoughts
Although teens are young and inexperienced, they have time on their side.
They might not be able to get the job they want, but any senior person would trade all the money they have to go back to being a teenager.
If you learn how to save money as a teenager, you will have a tremendous advantage over your peers.
By the time you are 30 years old, you will be well on your way to affording the house of your dreams, having your dream car, or becoming financially independent.
So, don’t make the same mistake I did. Don’t spend all your money as a teen. Learn how to save money as a teenager and set yourself up for an amazing life.
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Pay Yourself First – How To Pay Yourself First
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