According to our Youth Economy Report, kids and teens who are encouraged to save are far more likely to continue saving as adults. Our data shows that US children saved over $2.8 billion in 2020, which equates to 10% of their total income.
From your teen's point of view, there are plenty of reasons to save. Whether they are looking to save up for their first car, a trip away with friends, or a new pair of trainers, getting started is the most important step. The good news is, you can help them with financial education and information on how to save.
How to save money as a teenager:
- Open a savings account
- Separate spending and savings money
- Keep track of purchases
- Think twice before buying
- Start budgeting
- Do chores to earn more allowance money
- Getting a summer or part-time job
- Use student ID
- Get a GoHenry prepaid debit card
Open a savings account
Parents or guardians can open a savings account and manage the account on your kid's behalf. Your teens can take control of the account when they are 18, at which point they can also withdraw the money, so this is a great way to teach them about long-term saving, different types of savings accounts, investing, and finances.
Separate spending and savings money
There is a fine art to saving. Firstly, it's a lot harder to save when you don't have a goal in mind. To make saving easier for teens, help them create a specific and measurable goal that allows them to separate their spending money from the money they want to save.
Once they have this, it can help to use a savings calculator. This will help your teen determine how long it'll take to save for a specific goal. For example, they might want to save $150 by the end of summer. If there are 8 weeks of summer vacation, they could save $18.75 per week to reach their goal.
From their allowance and other income, they can now work out how much they can spend each week and how much they have to add to their savings pot to reach their goal.
Keep track of purchases
One of the best ways to save money is to keep track of your teen’s spending. Ideally, you'll show them to do this themselves through the GoHenry app. This way, they can see if they are overspending or have extra cash that could go into savings. Helping your kids see that tracking their spending not only helps them to spend and save more wisely, but also helps them maintain control of their finances. This will be the cornerstone of their lifelong financial habits.
Think twice before buying
Being conscious of how much is spent means helping your teen to think twice before buying. Conversations around needs versus wants are important. With a bit of thought, your teen might realize that missing out on impulse buys is a smart decision in the long run.
Remind your teen to start by budgeting by giving themselves a weekly spending limit. At the same time, they should think about why they spend money impulsively. Is it peer pressure? Is it boredom? Are they spending because they are subscribed to too many stores and services, and these stores send a constant stream of marketing emails and discounts? If so, unsubscribe!
There are two ways your teen can save money. One is by earning more, and the other is by spending less thanks to careful budgeting. Budgeting means:
- Not spending without thinking
- Keeping track of their purchases and ATM withdrawals
- Thinking twice before buying items
- Figuring out where they waste money daily, weekly or monthly
- Watching how much they spend online
- Making sure they get the lowest price with discounts and vouchers when they do spend money
Encourage them to understand that small purchases can really add up. For example, if they buy one small bottle of cola five times a week.
One bottle of cola costs an average of $1.60.
$1.60 x 5 = $8 a week
$8 x 4 = $32 a month
Do chores to earn more allowance money
If your teen needs to top up their savings, they will want to earn more money in general. According to our Youth Economy report, more than seven out of ten kids (71%) say that it's important to them that they make their own money. Even children who are too young to get a job legally are earning an allowance by helping out around the house. In 2021, GoHenry kids earned $3.1 billion from completing paid tasks set in their GoHenry app.
Getting a summer or part-time job
Nothing will improve their income faster than getting a summer or part time job. The findings from our latest Youth Economy report indicate that teens are already taking an entrepreneurial approach to earning. Aside from classic teenage jobs, your teen could try dog walking or even putting the clothes they don't wear anymore up for sale. A quarter of kids and teens are now earning money by selling things on online marketplaces such as Etsy, eBay, Depop, and Vinted, with an average monthly 'wage' of $14.67.
Use student ID
If your teen is a student, they can get some discounts using their student ID. They can also sign up for a lot of student discount cards such as Unidays, the Student Advantage Card, and more. The sign-up process is very easy and if they qualify they’ll get an amazing array of discounts from 10 to 25% across a range of shops and restaurants and services.
Get a GoHenry prepaid debit card
GoHenry gives your teen access to a broad range of financial education tools with the in-app Money Missions. Here teens can watch videos and take quizzes to learn about investing, saving, compound interest, spending, and more. This means when the time comes for teens to go off to university and get access to their savings account funds, they will already have the money skills they need to manage their savings wisely.
Learning how to save up money as a teenager is easy with GoHenry. Your kids can track spending with the help of their GoHenry card. These prepaid debit cards allow teens to save and spend wisely. With parental controls and the ability to set paid tasks in the app, you can assign your kids chores and pay them directly for the tasks they complete.