If there is one thing that I wish I could do, it would be to go back in time to my very first job and knock some financial sense into 16 year old me. Like most teenagers, I wasn’t really taught about money, so when I finally started getting a paycheck it didn’t last long. I bought all of the most unnecessary things I can think of, and didn’t once stop to think about my financial future. So I hope that with this post I can help prevent today’s teenagers from making the same mistakes that I did, and hopefully help set them up with a head start on the path to financial success.
Start Investing Now
Chances are you are working a minimum wage job, and possibly not working a large amount of hours. The good thing is, you can start investing with even small sums of money, and you have an advantage because you are young. The more time that you have to invest your money, the more it will grow. This means that starting young gives you a great advantage. So look into some ways that you can invest part of your paycheck, and you could be sitting on a nice chunk of change in a couple of years.
Save Part of Every Paycheck
One of the best things about paychecks when you are a teenager, is that you don’t (usually) have rent or bills to pay. Because of this, you can start to build up a nice savings net for when you do have these expenses to worry about. I’m not telling you to save your whole paycheck and not use any of it to have fun with friends. What I am saying, is that if you saved $50 from every paycheck from age 16-18 (bi-weekly paychecks) you would have $2,600 in savings, which is more than most American adults have. Saving more money each month can seem like a hard thing to do, but once you start to build good habits they will really make a difference.
Start Learning About Money
Sadly, schools don’t do a very good job about teaching kids about how to handle their finances. However, kids nowadays are better at using the internet than ever, so any questions you have, or information you want to learn can be found on the web (a lot of it on this blog so follow it!). YouTube has tons of videos and creators that do a great job of explaining all topics money, so make sure to check them out.
Be Careful With Credit Cards
Credit cards can be an amazing resource, but only if they are used properly. My biggest pet peeve about credit cards is that they send them out when you turn 18, but no one really explains to you how they work. I know plenty of teenagers who got a little too excited about their credit cards and ended up with a lot of debt. Credit cards can be a great way to get started working on your credit score, or help you in an emergency, but the strategy should be to pay off the balance each month. Not only does this help your credit score, but it will show lenders and credit card companies that you can be trusted with higher spending limits.
Learn How to Budget
I firmly believe that budgeting is the key to financial success. Everybody has an income and expenses, and you need to know how to balance those out. Budgets help you to know where your money is being spent, and gives you a good idea of how to manage your income to work best for you now and in the future. The more you know about your own finances, the better off you will be. If you want to get a more detailed look at budgeting check out my post How to Write a Budget.
Don’t Buy Things You Don’t Need
I was 100% guilty of this as a teenager. I ate out for most of my meals, wasted gas driving around, and bought more pairs of shoes than I needed. I’m not saying you can’t buy things that you want, or go to the movies or the mall with your friends, but you need to make a conscious effort to think about if you really need a $200 pair of shoes. I once worked with a kid who complained all day about having no money left from his last paycheck. When I asked him where his money went he excitedly showed me his new Air Pods. If you have the money than feel free to purchase yourself the nicer things that you want, but if he had seriously needed money for something that week he would have been out of luck.
Work/Earn As Much As You Can
I know this sounds like a stupid point, because obviously we want to earn as much money as we can. What I am trying to say is that a couple of shifts a week is not going to earn you a lot of money. I worked 30 hours a week in high school. This is not to brag, it is to say that you can still work a decent amount of hours and still have fun in high school. With how tech savvy teens are nowadays, it might be worth it to see if you can make money online. Things like monetizing your social media, filling out surveys, or starting a YouTube channels are things that you can do to earn more money each month, on top of your regular high school job. I wrote a post, 25 Ways to Earn More Money Each Month, go highlight some of the ways that you can make money on the side.
Ask Your Parents About Money
As a father myself, I want my son to grow up to have a better life than me. As parents, we want to help our kids out as much as possible. Ask your parents about how they manage their money, and there is a pretty good chance that they will answer all of your questions and then some. If your parents don’t want to talk about it then that is fine. There are still other resources that you can rely on.
Figure Out Your Future
College is expensive. If you are going to go to college, make sure that it is something you really want to do, and not something that you think you should do. Pick a major that you are serious about, because changing your major halfway through can cause you to spend even more money and add semesters to your college career. If you decide you don’t want to go to college, or that you want to start your own business, that is perfectly okay. Don’t let anybody tell you otherwise. You can make great money without a college degree, so figure out what you really want to do with your life, and you will be much better off financially.
Thanks for Reading!
Money is not an easy subject to talk or learn about, but our lives revolve around it. Learning as much as you can about money can help you out while you figure out how to make that money. Your financial future starts now, and what you make of it will be solely up to you, how you manage your money, and the effort you put in. Be smart.
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