August 10, 2020

How to save money as a teenager

This post may contain affiliate links which means we may receive compensation when you click on links to those products. For an explanation of how we make money, visit this page. This just helps fund the site and is no cost to you. 

If you want a real advantage later in life, then learning to save will definitely give you that. Take it from someone who wishes they knew what they know now as a teenager. I want you to learn from mine and so many other’s mistakes in this article. I will take you through simple steps that you can do right now to help you benefit massively later on. This is How to save money as a teenager!

Lesson 1: The art of compound interest

Ah Compound interest, a phrase I had never heard of until about 5 years ago. A lesson I believe should be taught in school rather than the likes of other boring maths that I have never applied. I can count on 1 finger how many times I have used my protractor since leaving school! Learning compound interest is key to how to save money as a teenager.

Now, why should you be interested in compound interest you ask? Well pretty simple the biggest factor of compound interest is time. Time being, the longer you leave your money the higher it will grow over time. 

So what is compound interest, well Investopedia defines compound interest as: 

Compound interest (or compounding interest) is interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods on a deposit or loan. Thought to have originated in 17th century Italy, compound interest can be thought of as “interest on interest,” and will make a sum grow at a faster rate than simple interest, which is calculated only on the principal amount.’

If you think compound interest is a myth then try out the compound interest calculator here

compound interest
compound interest calculator from

Key takeaways from this lesson

  • Start saving early
  • Leave the money alone for as long as possible
  • Even the most modest contributions will help

Imagine starting now and locking money away for 10 years, it could help you buy your first house whilst your friends are complaining that everything is too expensive.

Lesson 2: Earn free gift cards

For sure the easiest way to earn some spending money as a teenager is Swagbucks. You literally have to watch videos and take surveys and they give you gift cards to spend at over 100 different major retailers like Amazon. The age requirement is 13 so you don’t need parental consent to apply, simply fill in your details and you can start earning through the Swagbucks app on your phone!

If you want to learn more you can check out Swagbucks here.


Lesson 3: Start a savings account

When you’re not earning much you might think what’s the point of putting money into a savings account. Let me tell you even if its $10 a month it will make a difference in the long term!

  1. It will help you build habits that will save you well later in life when you do start earning more money.
  2. It adds up – trusts me it really does.

So moral here is open a savings account, one where you can just add to it and forget about it. it will give you the tool of how to save money as a teenager.

Set some goals for your savings, it could be to reach $100. A goal is a goal then keep at it and use keep using the compound interest calculator to keep your appetite strong. Think long term; be the first of your friends to buy a house.

If you’re not sure where to start with a savings account have no fear Nerdwallet produced a great article in which they compare the top savings account you can find it here or click on the image below:

kids savings account
Taken from

Lesson 4: Keep your everyday spending separate

Starling teenager account

I would personally recommend separate savings and everyday spending account. Trust me it can be too tempting to just spend it if you are looking at it every day.

You can use an account like Starling to use for your everyday spending. And within the app, you can set up savings pots to keep track of your savings goals! Pretty cool.

The savings pots keep your savings cash completely separate from your everyday money, you set your own goals and can even a custom picture to your savings pot! This makes your goals personal to you.

It’s really useful for everyday spending too as you can see what you’re spending your cash on using the app (useful for the next lesson).

To sign up to Starling you just need to be based in the UK and 16 or over. If you are under 16 don’t worry you can still benefit from an account with Starling to use for everyday spending but you will need a parent to sign up too and request a Starling Kite card.

Want to find out more about what Starling has to offer? Check out this definitive guide to Starling bank accounts.

Lesson 5: learn what you are spending your money on

Try to pay by card whether possible, this means you will keep a record of what you are spending your cash on. Once you have this information review your spending. Are there any savings that could be made?

Go through what you have bought and review it, either by writing a review or literally ask yourself was it worth it? Would you buy it again?

kids spending money

So why should you take the time? Well, the more invested you are in your money the more you will learn to work with it. If you don’t understand what you are spending your money on then you are more likely to spend more.

Again it is about building habits that will give you an advantage later on in life. If you take advantage of a service like Revolut (there are others this is just an example) then this process becomes very easy, after all, we are in the 21st century now!

Other apps that are worth checking out include Mint and Tip yourself which allows you to tip (put money into savings). Explore all 3 and decide which is write for you.

If you are not a fan of apps then a old fashioned pen and paper will help! Just write your expenses down and review each month or week.

Lesson 6: Involve your parents, you might be surprised

So hopefully you have decided to set some goals and learn more about your spending. This is the point where it’s a good idea to involve your parents. They will probably want to help you out if they can. 

teenager money goals

You could for instance suggest:

  • They contribute if you hit your saving goals, for instance, they could match your contributions. This will help you on your journey to reaping the rewards of compound interest.
  • They offer you chores in exchange for more money for savings.

It’s not a shame to ask them for help, trust me they will be impressed that you are taking steps to look after yourself long term.

Lesson 7: Spend where you can use your Student ID

I wish I had access to a student ID card now, you can save loads. Please milk it while you can but of course, only spend on what you need.

A lot of retailers offer a least a 10% discount, so you could for instance budget for the full cost of the product and put whatever you save into your savings account.

student discount

Spend some time to research your favourite retailers and if they offer student deals. If your favourites don’t offer any deals then are there any similar retailers who you could get a comparable product for less?

You could also save your parents money by using your Student ID on services like Spotify and Amazon, agree to use it and ask if they will split the savings with you – everyone wins!

Lesson 8: Get a job

If you are old enough get a summer job, if not ask your parents to do chores or ask neighbours if they need any services doing like car washing, mowing the lawn. 

Untitled design 9

This will help you live a little whilst also saving. It will also give you an advantage later on as you will have what many others don’t which is work experience. Top tip: get a written reference when you have completed any summer work, it will be a nice addition to your resume and help your employability in the future.

Just make sure you don’t over-commit yourself and miss out on your studies, a job isn’t your most important objective right now so only do hours that won’t affect your study time.

Lesson 9 – pay yourself first

pay yourself first

According to Investopedia:

‘Paying, yourself first is one of the pillars of personal finance and considered the golden rule by many financial planners.’ 

Paying yourself first means that before you do anything you put some money aside for savings. Whether it’s $10 or $50 include this as part of your goals and get into the habit of paying yourself first.

Use a % of your earnings is paid to yourself i.e. 15% this way as your earnings increase so does the amount you put away! Simple.

Lesson 10 – Split expenses

Have Netflix or any other subscription services like Spotify where its possible to split the bill? Then do it! How to save money as a teenager is also about being thrifty…

This means you could get more with less i.e. one family member pays for Amazon Prime while you might pay for Netflix but you get access to both. 

Don’t be afraid to do this on nights out either, rather than buying rounds of drinks suggest a ‘kitty’ where everyone puts in and that money is used for the drinks. It means no one loses out.

And Finally- Don’t give up

Dont give up 1

Money management is hard because it is so easy to forget about and lose track. This is exactly why its great to start early and get into good habits, I wish I knew back when I was a teen what I know now. 

So my final lesson is to give yourself a break, we all make bad decisions from time to time don’t let it derail you. 

Use the lessons in this guide and keep going back to the basics.

Are you a parent? Check out Tips for Parenting Teens


Saving money as a teenager is hard there’s no doubt about it. Hopefully by now you know how to save money as a teenager.

It might seem pointless and you would rather be spending what your friends are, but remember the compound calculator and think long term.

By thinking long term and starting out with great habits now you will set yourself up for a better future. Ever heard the phrase short term pain, long term gain? This could be you.

Which tips will you utilise? Let me know in the comments below & don’t forget to share if you have found this article useful 🙂

Want more money saving articles? Check out some of the below:

Save for later

Use the share buttons to send yourself a link to read later or Pin the image below to Pinterest.

how to save money as a teenager

About the author 

Mary Elizabeth

Mary Elizabeth is a passionate advocate for financial freedom. She is the founder of MeMoreMoney, and a featured Personal Finance expert in GO Banking Rates and Yahoo! Finance. Mary loves to make money simple and understandable for everyone. Her goal is to help people make simple changes so that they have more money to live the way they want.

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}