How to save money as a teenager

Saving money when you're a teenager is hard, especially when you have places to be and movies to see. But it's not impossible. Here's how to save money as a teen.

Whether it’s a new iPhone, that trip you’ve had your heart set on, or bigger goals like buying your first car, you have big dreams as a teenager. But even if you have help from parents or guardians along the way, now is the time to start thinking about saving money for the future.

Saving your own money toward your goals makes meeting them more rewarding and helps you learn important life skills like money management and budgeting. Here are some tips to help any teenager save money now.

What’s Ahead:

9 ways to save money

Start a savings account
Separate spending money from saving money
Keep track of your purchases
Ask your parents
Do housework and odd jobs
Use your student ID
Spend smart
Get a summer job
Set goals

1. Start a savings account

In your teen years, you might feel conflicted or unmotivated to put money in your savings account if you’re not making much. This is completely understandable. But any amount you can save, whether that’s $10 or $100, is better than nothing.

Try to set a daily, weekly, or monthly savings target and stick to it. This is something some people struggle with their whole lives, but the earlier you can start saving and setting good money habits, the easier it will be to keep doing it.

Our savings calculator can help you find out how long it would take you to reach your savings goals depending on how much you save.

Once you’ve established targets, put the money you plan to save for that period in an account. This will help reduce any temptation to spend. If you’re working part-time at your local supermarket or merely getting an allowance, put some of it aside.

Contributing to your account on a regular basis and following your targets establishes sound financial management and encourages better spending habits.

Choose high-yield savings accounts

The average savings account at a bank or credit union will pay you almost nothing in interest (a “bonus” paid by a financial institution, calculated as a percentage of your balance or savings total). But some savings accounts pay great interest rates to help you save money faster.

A high-yield savings account is a savings account with a much higher interest rate than the average savings account at your local bank. We can’t recommend these enough, especially for young savers. And in addition to better rates, these often come with perks like fewer fees.

And compound interest can be a teenager’s best friend too. When you open a savings account that earns interest and leave that interest in your account, you start to earn interest on your interest — this is called compound interest. This means the longer you save money and the less you touch it, the more it grows.

2. Separate spending money from savings

When you save money in a savings account, you might be tempted to just dip into this bank account when you want to spend. But DON’T touch it! Let your savings be savings and your spending be spending.

Savings are for “needs” like emergencies and expenses, not for “wants” like food and fun things. The smart thing to do is to have a checking account with a debit card you use for everyday spending. Start a student checking account or free checking account and put some of your money in this and withdraw as needed. This is a lot safer than carrying cash everywhere. Put extra money that’s okay to spend into your checking account, because this is where you’ll withdraw money from when you use your debit card.

Then, have a separate bank account for your savings, like a dedicated high-yield account. Try to get into a habit of only putting extra cash into this account, not taking it out.

This way, you won’t mess up your own savings goals. Savings accounts are created for the long haul while checking accounts are for daily spending. Always keep that in mind.

3. Keep track of your purchases

Although it might not seem like it, saving money as a teenager is a lot easier when you know what you’re spending. There are a couple of different ways to track your spending. As we go over these, think about which one might work better for you.

Paper and pencil tracking

The first way is an “old school” method that your parents or grandparents probably used at some point (or still do). It involves keeping your receipts and manually writing down your spending in a journal or notebook. With this method, it’s smart to write dates next to each entry so you know when money comes in and when it goes out.

Dividing your purchases into categories can help you better understand your spending habits and make changes as needed if you feel like you’re overspending in any areas.

If there’s cash you can’t track for one reason or another, make a note of it and even write small reviews of the things you bought. Once you see some of your purchases laid out like this, you might want to change the way you spend. Whether it’s a bad movie you watched or a party that bored you to death, you’re more likely to be watchful and selective in your spending.

Apps

If you’re not into the old-school method of writing stuff down, there are many money management apps that can do the tracking for you. They’ll link to your bank account and give you a detailed summary of your spending, even categorizing all of your transactions so you can quickly see what percentage of your money goes to what kinds of purchases.

Apps take most of the work out of tracking expenses, which is great for beginners. But because this is not as hands-on as manual recording, it won’t have quite the same effect of forcing you to think about your spending.

If you do choose to track your money with apps, be sure to check your spending at least weekly to stay on top of it.

Why?

The more you pay attention to the money leaving your account and really think about your purchases, the more motivated you’ll feel to keep more of your cash. You’ll think twice about buying things you don’t really need or splurging when you really should be saving.

And before long, you’ll likely find yourself with more money saved — and fewer things you don’t need.

4. Ask your parents

Yes, that groan you’re making while looking at this suggestion can be heard all around. But, it’s not a bad thing to ask your parents for help when trying to save a few bucks.

This can take many forms. You might ask them to match your weekly or monthly savings by contributing something to your account. If you put aside $25 a week for the month and show your parents you’ve stuck to that target, you can ask them to contribute $100 at the end of the month. Alternatively, if you get paid for chores or anything like that, just request that they put this money automatically into your savings.

You can also just ask your parents or guardians to help show you what works for them and give you tips for managing your money if asking for cash isn’t an option. And if you’re not able to open bank accounts on your own, see if they’d be willing to open a joint account with you. There are other ways they can help that don’t involve giving you money.

Other family members might want to chip in too if you tell them you’re trying to save money for a goal. Asking for cash as a gift instead of items is a good place to start, and your family members would likely be happy to contribute to your future in this way.

5. Do housework and odd jobs

Teenage girl mowing lawn

If just asking for money doesn’t work, offer to do chores around the house for more money. Fold laundry, do dishes, scrub the bathroom — all those things you’re not too fond of doing, your parents aren’t either. You can also offer to watch your little sibling at an hourly rate if they ever want a night out.

Turn to your neighbors and other family too. Getting the groceries for the person next door, washing cars for a friend’s parent down the street, or shoveling snow and mowing for your grandparents are all good options. People are usually more than willing to pay a teen for tedious odd jobs, and chances are at least one of your neighbors has a chore for you.

You can make serious money on chores and favors if you stick to it, and you can earn other skills like time management and negotiation while you do it. You just have to ask.

6. Use your student ID

Another idea you maybe didn’t think about much: your student ID can be so much more than a card with a less-than-flattering picture of yourself. Many of your favorite stores and restaurants offer a student discount, often for anywhere from 5% to 20% off your order or purchase.

Getting all the discounts you can makes saving a whole lot easier when you do want to spend and ensures you can put more of what you make in a safe place until you need it. Ask about student discounts and deals everywhere you go. Some businesses may not openly advertise their student discounts but would be more than happy to provide them if you ask.

7. Spend smart

Nobody says you have to stop spending altogether in order to save. There are a lot of ways to save when you’re out spending, like splitting costs, shopping secondhand, using coupons, and more.

Split

When you spend, think about sharing costs with your friends or siblings where you can, whether you’re going out to eat, buying a video game, or going on a trip. Capitalize on any interests you share with people by splitting the things you each want to spend a more reasonable amount.

Thrift

And when you do need to replace something or there’s a type of clothing you want, check thrift stores first. Buying used is not only a smart way to save money but it’s eco-friendly and sustainable.

Take surveys

Also, try and collect as many coupons and gift cards as you can. Sometimes you can earn gift cards for doing things like taking surveys or writing reviews, even for your favorite stores and Amazon. That way, when there’s something you have your eye on, you have a gift card on hand so you don’t have to dip into your savings.

Wait

When you do make more money, do your best not to blow it right away. You don’t have to save every penny you make but try to avoid impulse buys and unnecessary spending the minute more money hits your bank account or pockets.

Get into a habit of waiting at least a few days to buy things you want to buy. If you still want it after a few days or a week, decide if it’s worth buying and record the purchase.

8. Get a summer job or part-time job

If you’re old enough, getting a summer job will help you save some extra cash when necessary.

If you don’t have any significant plans during your summer vacation, why not make money? It keeps you from making regrettable decisions with whatever allowance or little money you may have. Plus, it allows you to keep replenishing your account(s) until it’s time to hit the books again.

Summer jobs are also an excellent opportunity to gain experience. They can help you get better jobs in the future that offer higher pay. You can also look for a part-time job during the school year if you think you could spare a few hours a couple of nights a week. This can be tough to juggle with a demanding schedule of extracurriculars and academics, but having a regular income is worth it.

9. Set goals

You probably already have savings goals in the back of your mind for things you want to be able to buy or do. Defining these goals more clearly, and setting target dates for reaching them, can help you stay motivated to save money — even when you’d rather not.

If there’s a big purchase or activity you know you’re going to want to make, make a plan as early as possible for saving enough money for it. How long would it realistically take you to reach that goal if you start saving now? How much will you need to save each week or month to get there? Is there anything you’ll need to give up in order to reach your goal?

Whether it’s your first car, college expenses, or just a hoodie you really really want, there’s no such thing as a bad savings goal.

Summary

Saving money as a teenager is hard, especially if you haven’t yet developed the skills to make it in the working world. It’s also tough when so many social activities revolve around spending. But you can do this.

Opening separate accounts, tracking your spending, and cutting costs when you do spend are just a few ways to save more and spend less. There are also benefits as a student that you can use to your advantage, apps to help you access your accounts, and opportunities to make more cash helping out your family and neighbors.

Click the links below to learn more about how to save money as a teenager.