Money Management for Teens: How to Save Up Fast
Saving money may feel like something reserved for adults that have incomes and established budgets, but teenagers are in a unique position to benefit from savings as well. Not only does it allow you to take advantage of the power of long-term savings over an even longer period of time than usual, but it also helps you establish good financial habits early on in your life.
Whether you’re stashing away some extra cash as the beginnings of a long-term nest egg or working towards purchasing a brand new pair of Nikes, understanding how to save money quickly is a powerful financial tool to have at your disposal. Here are a handful of the best tips to learn how to save money as a teenager quickly and effectively.
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1. Make a Savings Goal
Good money management for teens doesn’t have to start with a retirement plan or even a car. It can start small and close to home. Whatever the specific item in question, one of the first things you’ll want to practice is setting a savings goal. Choose something you specifically want to purchase and then figure out how you can get there. If you’re looking at getting a new game console, for instance, you probably need a few hundred dollars. There’s your first savings goal.
You can also apply this formula to larger things that may not have specific price tags on them. For instance, if you decide to start saving for college, you probably have no idea what your college expenses will actually end up looking like. Instead, simply set a savings goal like $20 per week or $100 per month in order to help you stay focused and on track.
2. Set a Budget
Setting a budget may sound like something for a person with a full-time job and large expenses like a house or car, but learning how to budget can be useful for all sorts of other situations, too.
Take the time to set up a budget that tracks all of your income and expenses. If there’s no rhyme or reason to your finances yet, that’s okay. It’s still very beneficial to start getting used to monitoring your money and seeing both where your cash is coming from and what it’s being spent on.
3. Open a Savings Account
While you can always bust out that old piggy bank or get an envelope system going, one of the best ways to truly start saving money is by opening a savings account. This will allow you to set aside money that can be safely kept out of sight and out of mind, far away from the temptation to spend it on frivolous things. In addition, you’ll have the added benefit of accruing interest on your account over time.
For instance, if you were to start with $1,000 in a new bank account at a 1% interest rate compounded daily, and then you were to dutifully add just $100 per month to this account for ten years, not only would have set aside $13,000 on your own, but that money would have earned you another $732.09 in interest during that time.
4. Choose Cheap or Free Activities
It’s tempting to live it up during your teen years, but always remember that spending money does not automatically equate to a good time. In fact, there are plenty of ways to spend little or no money and still enjoy yourself.
Instead of going to the movies, spend a tenth of the money at a Redbox. Rather than hitting up your local mall, shop at thrift stores. If you’re feeling an itch for adventure go for a walk, check out a local park, or look for other free ways to spend your time. Then, make a point of adding the money that you would have spent on other activities into your savings account.
5. Get Help From Your Parent or Guardian
If you’re serious about figuring out how to save money fast as a teenager, there’s a good chance that your parent or guardian will be interested in helping you out. Ask if they’re willing to pay you for chores or even match your savings.
Remember, we’re not talking about your overall earnings here but your savings, in particular. They’re much more likely to reward wise financial behavior with their own monetary support.
6. Bring Lunch to School
Just because buying lunch at school is convenient doesn’t mean it’s the best option. Look for ways to make healthy, affordable lunches at home and then ask if you can redirect the money that is saved into your savings account.
7. Get a Part-Time Job
If you’re struggling to come up with cash to save, consider picking up a part-time job. For instance, you can apply for a traditional teenager job in an industry like retail or food service.
Another modern option is to look for freelance work. The gig economy is exploding these days. The job opportunities it presents are both flexible and offer experience in a variety of different fields that can help your resume as well as your savings account.
8. Enter a Contest
Often contests geared towards highschoolers and teenagers, in general, offer a monetary reward. Look for competitions on a local, national, and even international scale in an area that you’re skilled in. Here are a few suggestions to get you started:
- Write an essay. There are many different essay writing contests with prizes in the range of hundreds and even thousands of dollars.
- Compete in the Paradigm Challenge. The Paradigm Challenge has very large cash prizes for the winner of each age level.
- Join an art competition. The National YoungArts Foundation’s National Arts Competition has contenders compete for up to $10,000 in cash awards.
9. Participate in Savings Challenges
Finally, if you’re struggling to come up with creative ways to save, consider setting a series of savings challenges for yourself. This can be anything from not eating out for a month to selling unwanted items, cutting out Starbucks for a while, or even committing to no spending at all for a week or two. Whatever money you don’t spend should go right into your savings account.
Learning to Save
However you go about it, taking the time to learn to save money is one of the greatest financial skills you can develop as a teenager. It teaches you monetary discipline and forces you to consider both your income and expenses.
Not only that, but each penny you save as a teenager will be busy at work earning interest and will ultimately be there ready and waiting when you need it further down the road.
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