Personal Finance For Teenagers – 10 Basic Guide Of Saving Money For Teenagers

Have you been considering how to dive into the financial world to learn and prepare yourself for good financial habits?

Well, if you have been considering that idea, you are in for a reliable means to live well.

If you have not, then you should begin. 
It is essential to know that you do not have to clock a particular age before you start sorting your life. Even as a teenager, you should begin considering picking up your first job no matter high low paying it is.

Getting a job early will not only set you on the right part in life but also help you know what it means to be financially responsible. To earn extra money for yourself or gain independence early in life, you will need to get a job and start working.

Having a job will teach you valuable lessons about picking up responsibilities early in life, give you exposure to the business world, cause you to learn a lot about customer service, and, most importantly, valuable work experience. 

In all, never forget to start to imbibe a culture of saving and investing. The same reason you decided to start working should be the same reason you save. The energy you put into working should be the same energy you put into saving and investing. 

However, you cannot imbibe the culture of saving and investing overnight. As it is a gradual process, you need to lay some necessary foundations and study a personal finance guide to enable you to have a sweet journey towards your saving and investment plans. 

Ready for an eventful lifetime, below are some essential guides you need to follow;

Related:10 Ways to start saving money as a teenager.

10 Basic guide of saving money for teenagers 

1. Get yourself a credit card: As a teenager, learning the ins and outs of personal finance means you have to move from keeping your money inside a jar at home to start saving in a proper bank. It means you need to get a credit card to start building your credit history.

What is a credit card?

A credit card is a device issued by financial companies to pay for goods and services. It allows the card owner to borrow funds that they pay later, either within a month or a year.
You can start to build by requesting interest-free credit cards from any bank of your choice.

Getting credits have a lot of advantages if used the right way. You can conveniently get a mortgage plan with a credit card by playing the financial system. You can start using 10 dollars monthly on your credit card and pay before the end of the month.

The idea is to build your credit history and not start compiling debt as a teenager. Also, familiarize yourself with the advantages and disadvantages of a credit card to avoid using it the wrong way.

Advantages of a credit card
o Financial management
o Better understanding of interest rates
o Early financial track records
o Helps in learning how to manage finances
o Establishing good financial credit rating

Disadvantages of a credit card
o High-interest rate
o Overspending
o Debt possibility
o Can hurt your credit rating
o Discourages you from holding physical cash.

As soon as you turn 18, open a bank account in your name with a sole owner. Check for reports with free interest credit cards. Also, check out online banks that are completely free or a local bank for account opening. Whichever you open, ensure they have no monthly fees that can be harmful to your total credit.

2. Secure a Job: Try to get a job that suits your long-term needs. As a teenager, get to know your kind of person. Discover if you love the idea of working in a business environment or love working as a freelancer.

Determining what is convenient for you will help you secure the right job. Register with some agencies that prepare teenagers for interview tips. You can also learn one or two things from your older siblings or parents that already have working experience.

Having a stable job will help you find it easy to deposit money in your account consistently. Since you cannot rely on your pocket money alone to survive, take advantage of working several hours as soon as you graduate from high school. 

Types of interview questions for teenagers
o Why do you want to work as a teenager?
o What are your hobbies and interest?
o How many hours are you willing to work in a week or a month?

o Why do you want to work in this particular company?
o Why do you think we should hire you for this job?
o How well are you prepared for working after school?

o Can you with a team?
o Can you describe your ability to work with a team?
o Have you ever handled a problematic situation before?
o Can you tell us how you handled the situation?
o Can you summarize in a few words what has been a significant accomplishment in recent?

3. Get Familiar with Budgeting: What is a budget? A budget is the total amount of money spent on personal or organizational projects over time, usually a year or more. A budget consists of things to be done and how much money to be allocated to each.

Types of budget
 Surplus budget – This type of budget occurs when an individual or organization’s income is more than what they are spending for some time, which can be monthly or annually.

 Deficit budget – This type of budget occurs when an individual or organization’s spending is more than what he or she is earning. It’s also a situation whereby an individual has budgeted more than his or her yearly income on specific projects. It means when spending exceeds income.

 Balanced budget – A balanced budget occurs when an individual or organization doesn’t spend more than they earn. You can spend in direct proportionate to how much you are earning. This is an excellent example of not incurring debt that could harm your credit score at the end of the month or year.

4. Analyze your Spending: When you have taken proper account of how your budget looks like on your workbook or spreadsheet, analyzing your spreadsheet will give you a good sense of how you have been spending. You will be able to categories your spending into two types: 

 Essential spending: It involves housing, utilities, food, mortgage
 Non-essential spending: It involves eating out, gym memberships,
subscriptions, taxi, coffee, etc.  

A good example of where you are supposed to be cutting costs is on coffee. If you have been buying one cup of coffee every day on your way to work or school, take out time to calculate how the amount you have spent in years. 

Let’s do these simple mathematics together. 
If a cup of coffee goes for $5 and you go to work Monday to Friday. 
That’s $5*5=$25
 $25*4(4 weeks in a month) =100 
$100*11(11 months in a year) = 1100

That is a whopping 1100 dollar yearly on a coffee that you can probably get in your office for free. If you have been buying coffee for 5years on your way to work every morning, you would have spent $5500, which could have gone into your savings account. If you channel that amount towards your first house down payment, you will be on your way to own your home.

If otherwise, you keep the money in a high yield savings account, it would have grown past $5500 with the power of compounding interest. Just as you cut costs on coffee, you should also reduce costs on other things,
including taxis. 

5. Learn how to Invest: As a teenager, exposure to the knowledge of saving and investing has a lot of advantages in life. Before you can be a master in a skill, you need a lot of time to learn the necessary things. So learn and take time to figure out your financial roadmap. Since you are still young, you have enough time to test various savings and investing techniques. 

Benefits of investing as a teenager
 Investing as a teen position you on top
 Gives you a sense of responsibility
 Higher returns on investment
 Puts your finance under control
 Gives you earning power
 Allows you to compound your interest rates

6. Make Good Use of your Earning Power: A teenager has a lot of earning power than most adults if proper training is put in place for such teenagers. Start exploring different ways to make money as a teen, build your passive income chains, develop your existing skills and learn to turn them into money by registering on freelance sites like Fiverr, Upwork, or freelancer.

Unlike adulthood, which calls for more expenses and responsibilities, earning from your teenage years is the best time to learn, make,
and save more.

7. Get Familiar with the Basics of Finance: As a teenager, lay your hands on personal finance books and courses that can help you a lot in your financial journey. Learning how money works regardless of how much you are earning in a week, monthly, or annually will put an edge in your personal finance life. It will also help in avoiding many money mistakes in life.

Finance consists of investments, liabilities, assets, funds, debt, capital, income, taxes, cash flow, and loans. So take advantage of any of these to become financially responsible. Personal finance is all about making smart decisions on managing the money you’re earning now for your future.

Components of a successful financial plan:
 Access your financial state
 Set money goals
 Write a detailed plan for accomplishing your goals
 Execute your plan 
 Know your money personality

8. Get used to Living Below your Income: Have a standard rule of saving some percentage from your income before spending. Living below your income means accessing what you are earning after bank deductions. More so, it means you are saving for unexpected expenses, but you are also saving for rainy days while learning to be contented.

Identify what you’re spending on. Look out for essential bills rather than non-essential ones. Ensure your expenses are not more than what you’re earning at the end of the month. Live less on your total income and avoid living more than your income.

Living more than your income means you are willing to incur debts that will be difficult to sort. Learn to invest part of your income weekly or monthly to profit from automated interest on both savings and investing.

9. Be Focus Driven: Being focused on the positive drive, motivation, and confidence will help you achieve success in your journey. Keep away from distractions that pose itself as discouragement towards your saving goal. Even in day to day life, a lot of teenagers have found themselves stuck on the inability to carry out simple day to day

They have a deficient attention span and are challenging to handle. This same energy is what most of them pose in their financial goals in life. Some do not save at all, but the few who save find it easy to withdraw their savings to plan a hangout.

If you have your financial goals written, then you need to let go of those things. Make up your mind to choose a favorable part towards acquiring financial freedom.

10. Stay away from Debt: The sad thing about debt is the fact that it will drain you and also drain your finances. No matter how much you try to keep up, it will stay in the shadow until you sort it. So, stay away from debt.

Do not engage in expenses you cannot handle. This is an excellent time to start learning the consequences of sinking into debt and how to manage money effectively. As a teenager, start forming good money habits, which many are not taught in school. Get your hands-on financial literacy books with teachings on how to stay out of debt.


Starting a personal finance journey is an essential step for everyone, especially teens, to build a stable financial status early. Things may not always go as you expect, but the money you save and invest will always come to your rescue 

After reading this, do not hesitate to take action immediately. It’s NOW or Never. Happy Saving!

Leave a Comment

Your email address will not be published. Required fields are marked *