Everyone wants money, even children and teens. But what if you’re a teen & running out of money?! Here are the top 15 money saving tips for you teenagers!
If your age is between 13 and 19 years, then you are a teenager, and that’s how dictionaries commonly define a teenager. Too simple, isn’t it? But this phase of life is full of myriad challenges and new experiences.
One of those challenges is dealing with finances and managing savings. You might be thinking, “I am a kid. My parents/guardians take care of my financial needs, why should I care about saving money?”.
Well, you are no different from other humans who start chasing money in their youth, and they keep doing so for years, yet they fail to fulfil their dreams. Managing finances and saving money are skills, professional skills.
As a teen, you may not save much money to buy an Audi, but you may acquire the skills to plan your savings in such a way that when you start earning, you’ll save enough money to fulfil your dreams.
How To Save Money As a Teen: 15 Money Saving Tips for Teenagers
“How to acquire money saving skills?”. Here, we bring you top 15 money saving tips for teenagers, exclusively brought to you by life experiences. Follow those which suit you best and learn the craft of saving money.
Start with the theoretical part. You should be aware of the primary economic model, that is, how money works? Get a basic understanding of common financial terms such as principal, interest, percentage, discount, profit and loss.
You should also be aware of basic arithmetic related to the terms above. You might have learned most of the vocabulary and mathematics in your school. If you don’t remember your school stuff, then let the internet help you in recollecting the knowledge.
This knowledge will greatly help in the following other tips.
The 10% Law
Suppose, you get Rs. 1000 as your monthly pocket money then save 10% of the received amount (10% of Rs. 1000 is Rs. 100) and assume that you’ve only 90% (Rs. 900, in case of Rs. 1000) for your expenditure for the whole month.
This 10% law can be modified. Instead of saving 10% at the source, you can save 10% amount every time you spend. For example, if you wish to pay Rs. 200 on a meal at some place then add Rs. 20 (10% of Rs. 200) to your savings from the remaining pocket money.
If you’re comfortable enough you can increase the savings share anything above 10%. But don’t make it less than 10% else your savings would be too little.
Home Sweet Home
You can save a significant amount of money by preferring home-made or self-made stuff. For example, you want to dine out with your friends, instead of going out and spending a considerable amount there, invite them to your home. Prepare the meal yourself or with the help of your family.
Apart from saving money, you’ll learn cooking (one more skill), and you’ll eat healthy food.
A meal is one example. You can save more by simple DIY ideas available over the internet for other kinds of stuff that you need.
In this way, you can reuse, recycle and reduce resource usage and contribute to the conservation of the environment (Green Good Deeds).
Where to keep saved money?
Nowadays, most of the banks offer student savings account, and the account opening procedure is hassle-free. You should visit the nearest bank, open a savings account and keep your saved money there.
You can keep the saved money as cash, but cash is more liquid (i.e. you may end up spending it quickly) and has its limitations (can be stolen and wear and tear risks). Whereas banks are more secure than your hidden pockets. Monthly bank statements can provide you expenditure history along with regular interest on your saved money.
Digital transactions also attract discount offers, reward points and cashback from various e-commerce websites.
Extra tip: You may opt out of debit card facility by the bank to restrict yourself from spending your savings.
You have one more option. Lend your savings to your parents or ask them to keep your savings in their bank account on a mutually agreed interest rate. Note: this option makes you less independent.
Money management tools – budgeting
There are a plethora of applications and tools available on the Android Store, the Apple Store and web portals to manage your expenditures and savings.
You can use Monefy, Walnut, Tricount, Mobills etc to track the distribution of your expenditures and savings. These tools are easy to use and provide data through infographics. These may help you in identifying your expenditure habits and plan savings accordingly.
There are some expenditures which are recurring; some are one-time expenditures. Start budgeting your monthly spending. Analyze the information provided by these applications timely and identify spaces where you can save more.
Take some responsibilities
Do you go out with your mother to buy groceries? Do you help your parents in verifying utility bills? No? You should. Now, you must be thinking, “How will it help me in saving more money?”.
Not directly but indirectly, it will help you in saving money.
First, you’ll be able to apply and polish the basic arithmetic you learned in tip number 1.
Second, you’ll get to know about local market prices.
Everything that you witness over e-commerce is not cheap, just because you see some discount offers. You should compare the prices of products available online and offline in the local markets.
Find out the best offers available and help your family in saving more. Perhaps you may get increment in your pocket money or bonus.
Needs v/s Wants
It is essential to restrict unnecessary expenditure to save more money. There is an apparent trade-off between expenses and savings; less spending leads to more savings, and more spending leads to fewer savings.
You should question yourself before spending big on any article – Why do you need it? Is there any alternative? How will it affect your budget?
If you’re spending a big amount and it is also affecting your savings then don’t be impulsive, take your time before spending.
Invest and increase savings
The cooking skills which you learnt in tip number 3 andyour saved money can be utilised to make more money. How? Participate in school fairs or community programs, open food stalls, earn and multiply your savings.
You’ll learn managerial skills, leadership skills and marketing skills through such temporary small-scale businesses.
Lending is another form of investment. If you’re 18 years old or more you may lend your savings through peer to peer lending platforms such as Faircent, iLendetc. Younger people may invest through these platforms with the help of an adult member of the family.
You may talk to elders in your family, communicate with them and ask for advice for shared investment in precious metals too. Remember, ‘Investment is subject to market risk’.
Don’t forget that you are a student
Students get a lot of benefits from the government. There is the concession on entry tickets to students at zoos, monuments, zoological parks and many other state-maintained places. Spend less money and save more.
Students also get concession on travelling through public transports like buses.
You may approach local businesses to sponsor your activities at school fair, events or community events. Consequently, you won’t have to spend much from your side for your stalls.
More earnings, more savings
‘If you are good at something, never do it for free’.
Identify your skill sets and earn more using those skills. Painting, designing, writing, teaching or any activity can be used to help others in their work but for a fee.
They say, ‘Time is money’, well, it is.
Look for an internship during vacations, earn more, save more money and moreover, learn new stuff. You need not go anywhere to search for internships – the internet has got everything, try Twenty19 and Internshala (these are very popular). You can look for internships around you or you may work from home.
There are so many things that you have, but you do not use much frequently. There are more people like you, may be around. Suppose you want to wear a blazer in a party but you don’t have a blazer but you have a friend, and he has a blazer. Why don’t you ask him to share his blazer against something that you can offer him to use?
You can share gadgets, shoes and many more articles and save your money.
You may also ask your friend to pool money to buy expensive stuff and share it with that friend like an external hard disk.
Target Savings and Penalties
Like checkpoints in races, you can create minor or major savings target with or without a deadline. You may make conditions for yourself such as – ‘Before achieving the target you’d not spend a penny from the savings.’
You can also add products to your wishlist that you would want to buy using the savings. Your wishlist may inspire you to be economical.
You can fix a threshold amount that is, a minimum savings amount required to be maintained to prevent yourself from spending the entire savings.
Penalize yourself by cutting down the extravagant expenditures in cases of breaching thresholds or deadlines.
Say ‘NO’ to borrowing
Borrowing means compromising with future savings. Repeated money borrowing may spoil your spending habits and may make you highly depended on credit.
People save money so that they can use the saved money in extreme cases, and they don’t have to borrow. Borrowing money affects your savings and you end up saving less or no money.
Prefer managing your expenditures within the limit of the money you have.
Want to commute? Prefer public transport or pool a cab over a private cab.
Want to read a book? Prefer issuing it from your school library or a state library.
Want to eat out?Prefer local restaurants over multi-national food chain outlets.
Want to go out for shopping? Prefer old city street shops over shopping malls.
The market is full of alternatives, you have to make a choice.
Liquid v/s consolidated money
The tip number 4 said that cash is a more liquid form of money. You might have thought, “I have seen paper currency and metal coins, how is money liquid then?”.
Well, you can use money in the form of cash for almost all kinds of the transactions. Can you buy shoelaces by giving a gold brick to the shopkeeper? (Rationally, you can, but that would be cumbersome for him to pay you the remaining amount.)
So, if you have cash with you, you can efficiently transact and spend. What if you have savings but not in the form of cash? You won’t be able to transact efficiently. That’s why cash is the most liquid form of money.
Now, there is another case. You have your debit card, and you want to eat bhelpuri at a nearby food cart. What are the chances that the vendor will have a POS machine to transact through the debit card?
You should prefer keeping money in consolidated form so that you don’t keep spending your money on minuscule stuff for the sake of little pleasures.
Everyone requires money to sustain in this world. Money doesn’t care if its holder is a teenager or an old age person. There are two faces of the value of money.
One, for the market, which remains the same – that is, the prices of goods are the same for you and all others. Two, for the holder, which depends upon the use – that is, you may not consider Rs. 1 a big amount, but if you have to pay a utility bill and you have a rupee less, you can’t pay the bill.
If you have surplus money you don’t care how you spend, you only realise its importance in shortage. It’s better to learn its significance at an early stage of life than regretting financial decisions later as many people do.
Hope, these money saving tips for teens will help you in some way or other.