Hearing “money management” can be intimidating when you’re a teen, especially if you are one who doesn’t have a job or way of income (allowance, etc.). Money management is essentially the way you control your money and decide how and where to spend it. Below is a small list that can help you get on the right track early.
Time is on your side.
It’s OK if you are only earning $7.25/hr or picking up babysitting hours here and there. What’s important is that you have many years ahead of you to build on what you’re earning right now. If you are helping contribute to family expenses, have a conversation with your parents and develop a plan so that you can still keep a portion of what you’re earning for yourself. On the flip side, don’t overwork yourself and juggle 2-3 part time jobs while also trying to keep up with school work. There are community resources that can help with financial assistance and help with past due bills. You’re still a kid! (even if you don’t want to be)
Make saving a habit.
Since you are young and have time on your side, start working on developing saving as a habit. A habit is something you do automatically- without even thinking about it (like checking social media or unread texts as soon as you wake up). If you are earning money, start putting a portion aside each time you get paid before you spend it on anything else. By doing this first every time you get paid, it will develop into a habit. By the time you’re 25 or 30 years old you won’t even think twice about it.
Budget and Track your spending.
Another important habit to develop is budgeting your money so you know how you’ll be spending your paychecks. Budgeting your money allows you to save, pay bills and still have something left over so you don’t experience FOMO with your friends. You can develop your own excel spreadsheet or look into budgeting apps on your phone. Whichever is easy and convenient for you to keep track of your earnings and decide how much you’re going to spend in different areas (savings, bills, entertainment, gas, etc.). By starting this now you’ll know exactly how to manage your money as you get older to keep from overdraft fees or piling up debt.
Separate your money.
If you have a job or your parents are willing to help you out, get yourself a checking account and a savings account. A checking account allows you to deposit and withdraw money whenever you need to. A savings account allows you to deposit money you don’t intend to spend (unless for emergencies) and it accrues interest over time. Do your research and make sure the bank you choose doesn’t have any hidden fees or charges every month for the accounts you have with them. Separating your money into checking and savings will help prevent you from spending the money you intend to save and give you a better idea of how much you have to spend.
Be realistic about your future.
As a teen you might feel a lot of pressure from your parents or other adults about your plans after high school and what career you want to go into. Again, DO YOUR RESEARCH. It’s easier said than done, but don’t give in to the pressure or make a decision because you feel like you have to. It’s OK if you don’t think college is for you or if you would rather attend a community college before going to a bigger university. You have options. There’s also many trade school options out there for you to look into. Whatever you decide, be realistic about whether or not you can afford it. It’s easy to take out huge loans and not worry about it until you get hit with your student loan payment six months after graduating from college. If college is what you want, start looking into scholarships and grants to help cover costs. Apply for as many as you can because you don’t have to pay back the scholarships and grants you receive. Also look into financial aid options at the school you want to go to and see if you qualify for a work study program- or even get a part time job to help cover tuition and bills while you’re in school.
These tips are just a list to get you started in the right direction. There are many resources out there for you to utilize and help you decide the best way to manage your money. If you’re a teen and read this article entirely, that’s a great start! Keep reading and doing your research so when you’re on your own, you can be successful and not have to worry about your finances. And most importantly, enjoy being a teen!
Resources:
Budgeting apps-
Pocketguard https://pocketguard.com/
EveryDollar
Books & Tools
Dave Ramsey Recommendations https://www.daveramsey.com/store/youth-teens
7 Finance Books Every Teenager Should Read
