How to Save Money As a Teenager
You probably already know how important saving cash as a teen is, because you’re reading this article! But there are always some special financial challenges that can arise when teenagers actually attempt to save their own money.
Specifically, we’re going to talk about those challenges through which teenagers are often faced in their quest to save money, and then go into how to really save money as a teen.
After reading this article, you should have a better idea of how to approach your efforts towards saving cash for your own future.
Keep in mind that the only way to get started is by adopting an adult perspective on how to save money, which is quite different than the way most kids think.
Most people think that the only way to accumulate long-term wealth as an adult is to work hard, earn a high income and save their money for their retirement.
However, as a young person, it is very difficult to do this. The reason for this is very simple – unlike olden days, there are no “earnings streams” in which you can regularly pay taxes on.
This means that you earn what you spend. And since the costs of living is so high, it’s very easy to spend more money than you earn.
So the key to how to save money as a teenager lies in understanding all these things.
You basically have two options if you are looking to put aside money for the long term: either a savings account or a money market account.
Each of these carries its own disadvantages and advantages. Let’s take a look at these two alternatives and see how to best approach them.
Savings accounts, as the name suggests, are designed to save money for the future. In other words, it is meant to replace your current income in case you lose your job or fall ill.
While this may seem like a good idea on the face of it, you should know that most savings accounts today come with very high commissions and fees and you may find yourself paying thousands of dollars before you even start earning anything.
With a money-market account, on the other hand, you don’t need to worry about commissions because they are almost non-existent.
Because you get to buy products from the money market, you will earn a certain percentage instead of the commissions which means that your savings will be substantially higher.
One important aspect of money management as a teenager is setting aside a portion of your salary to cover for your educational expenses.
While this may sound quite difficult, you can do this by making use of the money management software available in the market.
Since most banks provide some kind of financial-management software to their customers, you can easily get one for free and use it to set up your savings or money management accounts.
You may also want to consider enrolling your child in an educational program so that he or she is familiar with saving, and budgeting as well as how to save money as a teenager in particular.
As a student, you will be required to pay for your own supplies especially if you have a part-time job.
One of the ways how to save money as a teenager without hurting your pocket is by carrying items such as books, notebooks, lunch boxes, pens, and other school supplies within your wallet.
If you need to buy something outside, then you can have it delivered to your home in exchange for a small fee.
You can also start using cash to buy these things since credit cards usually have very high interest rates.
Another important aspect of how to save money as a teenager, aside from having a tight budget, is to know how to save money on some occasional purchases.
These purchases may include a new pair of jeans, a dress, or even a new cell phone. When looking for how to save money as a teenager, you should never let yourself be pressured into making a purchase that you may not feel comfortable with.
In fact, if a certain item makes you feel uncomfortable, then you can always opt for another item that is more suitable to your personality.
Finally, you should also create an emergency savings account just in case you will need it one day. Your emergency savings will allow you to cover your basic living expenses until your paycheck comes in.
You may also want to get a credit card in case you plan to visit a particular location during the weekend or in times when your paycheck is not really sufficient.
However, you must remember that the purpose of having a credit card is so you can purchase things using credit and not pay full price for it.