6 Practical Tips for Teens to Save and Spend Wisely

*This is a collaborative post on practical tips for teens to save and spend wisely

Teens, have you ever stopped to wonder if you’re really being wise with your money? 

It’s normal for a lot of teens to go about their young lives without having a pence to their name. From college tuition to new gadgets, money is a resource that comes and goes, more so the latter.

Many people (yes, even adults) have a less-than-stellar relationship with money, with this resource controlling them instead of the other way around.

However, if you want to live an easy life where money is a tool under your reins, then you’ll have to practise good saving and spending habits as early as you can.

This will entail a bit of a lifestyle shift, but if you’re ready to go through it, read on. This article will lay down some tips for teens to use money the best they can, given their circumstances.

Let’s have a look at six of these strategies in more detail.

1. Motivate Yourself With a Goal

Goal-setting is key for every teenager if they want to work towards a desirable objective. Without a goal, all the money you’re saving up for will be for nothing.

Goals can be categorised into different durations: short-term goals, medium-term goals, and long-term goals. 

Short-term goals are goals you want to achieve in a short amount of time, typically under a year. An example would be saving up for Mum’s present for her upcoming birthday in the next few months, or buying a new-gen console the day it gets launched to the public.

Medium-term goals are goals you’d like to achieve in one to three years, like saving up for a dress for senior prom night as a sophomore. Long-term goals are for goals beyond five years, like buying a nice lakeside house or getting a car once you become an adult.

While the goals above are effective, the best framework for structuring goals is by following the SMART goal structure. SMART is an acronym that stands for specific, measurable, achievable, relevant, and time-bound. 

An example of a SMART goal is saving up enough money to rent a studio close to a university in the closest city for the first semester of freshman year.

Following SMART principles makes tackling goals a more realistic endeavour. It also breaks down big, audacious goals into smaller micro-goals. This, in turn, helps you stay motivated and committed to staying on course with your goals.

2. Create a Budget

It doesn’t matter whether you have a part-time job, are a full-time student, or are knee-deep in debt. You need a budget.

A budget is an income and expense tracker that allows you to visualise your net worth. It’s a personalised record keeper that can be as simple or as complex as you’d like it to be. 

The way it works is that you’ll have to list your income streams and expenses as they happen. Be sure to track it alongside the date of the activity. The budget needs to be updated in real time for it to accurately portray your net worth.

Once you’ve listed your expenses and income, find the difference. The resulting amount will be your net worth for the period. 

If you want to make your budget more thorough, you can categorise your expenses into different branches like food, transportation, school supplies, and so on. This allows you to see which cost source is the highest, giving you the information to adjust your spending accordingly.

You can find budget templates through digital resources, such as blogs and spreadsheets. You can also use online apps as a budget tracker thanks to their built-in features.

In either case, having a budget can help you gain an overview of your financial situation, making it easier for you to adjust your spending and saving habits to align with your goals. 

3. Open a Savings Account

If you want to develop a keener sense of discipline and keep your funds safe simultaneously, consider opening a bank account for your savings.

A savings account not only provides you with a secure place to store your money, but it also helps you grow your savings over time through a small but steady interest rate.

Try to find bank providers that allow teens to open and set up an account. Find favourable terms too, like a lack of monthly fees or an easy-to-access mobile app.

Having a dedicated savings account also helps you separate your savings from your spending money, reducing the temptation to dip into your savings for everyday expenses.

By distinguishing the two, you can more easily work towards achieving your savings goals. This can help boost your financial discipline and financial status in the long run.

Want to know more? Click this link to learn more ways to help teens be smarter with their finances.

4. Avoid Impulse Buying

Has it happened again—have you fallen prey to the temptations of impulse buying?

If so, it’s not uncommon. But it’s not healthy either. Whether it’s a new shirt, a cheat meal, or a shiny, new gadget, making these impulsive and sudden purchases can derail your savings goals and set your financial progress back extensively.

To combat this, all you have to do is reframe your mindset. Ask yourself before every purchase whether buying that particular item can improve your quality of life in the long term. 

Furthermore, give yourself some time and space to tame your emotions before making the purchasing decision—about 24 hours would suffice. Doing this allows you some time to really consider whether an item is necessary or a fleeting desire.

Another way to control spending is by making a shopping list for whenever you go out and sticking to it. Refrain from deviating from the shopping list as much as possible. 

By being disciplined in this regard, you can avoid unnecessary expenses and keep your finances on track for adulthood and beyond.

5. Find Ways to Earn

If you love to buy things and experiences too much (we totally understand!), then you should consider finding ways to earn money for yourself to fund these things.

As a teenager, you can apply for casual and part-time work at various companies, like retail and fast food joints. This can be an excellent way to earn some quick cash to help you buy the things you want and need.

You can also explore freelance opportunities online, such as tutoring, graphic design, or content writing. If you’d rather be active, babysitting, dog walking, or lawn mowing are other great ways to earn a quick buck. 

If you can’t commit to a job, you can consider selling items you no longer need, such as clothes, books, or electronics, through hosted garage sales and online marketplaces.

By increasing your cash inflow, you can have more money to save and spend. This, in turn, allows you to achieve your financial goals at a much quicker pace than if you’re just solely relying on allowances.

6. Be Smart About Finding Deals

Lastly, you should also try to apply money-saving strategies as much as you can when buying things online or in the store. 

While not paying full price isn’t always a guarantee, there are ways you can increase your odds of finding great deals and saving a few bucks.

Here are some ways you can capitalise on deals:

• Use coupons and discount codes: Find coupons from a business’s social media page, email newsletter, or other sources to score deals on select products.
• Shop during the sale season: Take advantage of seasonal sales, holiday promotions, and clearance events.
• Compare prices: If you can find your product across multiple stores, buy from the one that offers the cheapest rate.
• Join loyalty programs: You can earn points and rewards from making purchases in stores that offer loyalty programs. You can redeem these rewards for special new items.
• Bulk buy: For groceries and the like, consider buying in bulk to lower your total spend.
• Check for student discounts: Many retailers and services like museums offer special discounts for students with a valid ID.

By being proactive with deal-hunting, you can save money by buying virtually the same item. It will entail a bit of research and digging on your end, but the payoff can be massive if you time it right.

Good luck with your financial journey!