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Resources > Financial Literacy > How To Save Money as a Teenager and What To Save Up For

How To Save Money as a Teenager and What To Save Up For

There are numerous reasons to save money as a teenager—maybe you want to travel, buy a car, or save up for college. If you’re a teenager without a job, saving a substantial amount may seem especially challenging, but it doesn’t have to be. In this comprehensive guide, we’ll show you how to save money as a teenager by providing simple yet effective tips and tricks. We’ll also recommend what you can save for both in the short term and in the long run.

How Much Money Should a 14-Year-Old Have Saved?

There isn’t an exact amount of money a 14-year-old should have in their savings as this varies based on your financial abilities and spending habits. However, you should generally aim to save 10% of your income, whether it’s your earnings from a part-time job, money from your allowance, or a combination of both.

If you’re a 14-year-old living at home, basic living expenses like housing and taxes will likely be covered by your family. The same refers to any major emergencies, such as health scares. Still, it’s good to have money saved for personal emergencies like a broken laptop or a lost phone. You should also try to save three months’ worth of personal living expenses—this may include outings with your friends, clothes, phone bills, college savings, or car maintenance once you get a car.

Ways To Save Money as a Teenager

If you’re wondering how to stop spending money as a teenager and save it for something you really want or need instead, there are several tips and tricks you can try:

  1. Set a savings goal
  2. Try budgeting
  3. Do chores for money
  4. Earn your income

Set a Savings Goal

Deciding on a specific goal/purchase when saving money as a teenager can help you stay focused and motivated. To resist the temptation of unnecessary purchases, try writing down your goal and placing it somewhere you can always see it, such as your phone wallpaper or a bedroom wall.

If you’re currently not saving for anything in particular, you may try setting a milestone to hit each month or year. For example, you can aim to save $100 over three months, and after you succeed, you can increase your target to $150 over the same period, and so on.

Try Budgeting

Budgeting can help you track your income or pocket money and expenses to see where you should cut back to save more. To figure this out, you should try: 

  • Tracking your spending habits to see where your money is wasted most
  • Thinking twice before making purchases
  • Keeping track of ATM withdrawals

The amount you decide to save each month is totally up to you, but here are three popular savings rules you can follow:

  1. 80-20—Allocate 80% of your income to necessary expenses like bus fare and lunch money and set 20% aside for savings
  2. 50-30-20—Allocate 50% of your income to essential items, use 30% for what you want (food, clothes, video games, etc.), and set 20% aside for savings
  3. 50-50—Allocate your money evenly between essential expenses and savings

Do Chores for Money

If you want to make your own money but are too young or busy with school to find a real job, you can ask your parents to do house chores for money. For example, you can do the shopping, wash dishes, or tutor your siblings for a weekly or monthly allowance. It’s a win-win situation—you earn money that you can put towards your savings and help your parents in the process.

Earn Your Income

Another way to save money as a teenager is to earn it by doing what you enjoy. If you like baking, making jewelry, or playing video games, try turning your hobby into a small business. You can sell your handiwork online or live-stream gameplay to potentially earn money that you can save.

If the idea of a small business sounds intimidating, you can also find a part-time job. Whether it’s a summer gig or an after-school job, it can help you reach your savings goals faster as you’ll have a more substantial amount to set aside each month. Plus, you’ll get some work experience along the way.

What To Save Money for as a Teenager

A recent study revealed that teenagers in the U.S. spend the most money on clothing (20%), food (19%), and video games (10%). This means they tend to save and spend money on items that bring them immediate joy—but are these good things to save up for as a teenager?

The best approach when saving money as a teenager is to create a balance between needs and wants and always put needs first. For example, if you drive a car, you need to have car insurance and gas money. While you may want to buy a new car, you shouldn’t spend money on it unless necessary.

Still, this doesn’t mean you shouldn’t save money for current needs. Rather, you should save for both long-term and short-term goals so that your current needs and wants don’t suffer due to saving for the future.

Here’s a list of some popular things to save for as a teenager in the short and long term:

Short-Term SavingsLong-Term Savings
Video games and gaming accessories
Streaming services
School trips
Prom expenses
Birthday presents for friends
College application fees
Car and car expenses
College expenses
Traveling abroad
Security deposit for an apartment
Furniture for an apartment or a dorm

Start Building Credit Early

If you want to save money for larger purchases like a house or car, chances are you’ll still have to rely on credit cards or loans to be able to afford it. Unfortunately, teenagers can’t obtain a credit card due to the CARD Act of 2009, which prohibits banks from issuing credit cards to anyone younger than 21 unless they prove they have enough personal income to repay the debt or have a co-signer who can do so.

Another obstacle in obtaining loans, even if you meet the age requirements, is your credit profile—if you have a bad credit score, you may not be eligible for a loan you need. Building strong credit from an early age can help you avoid these issues and assist you with:

  • Securing loans with favorable terms and interest rates
  • Obtaining rental housing or financing for a vehicle, home, or credit card
  • Ensuring you get better job opportunities

A great way to establish a strong credit profile early is to use a credit building service like FreeKick. This platform allows you to start building credit with your parents’ help as early as the age of 13.

FreeKick—The Best Solution for Credit Building and ID Protection

Provided by Austin Capital Bank, FreeKick is an FDIC-insured deposit account designed to help minors and young adults aged 13 to 25 build a good credit profile through parent-sponsored credit building. The platform also provides identity monitoring and protection services for the whole family, covering up to two adult parents and six children.

Start Building Credit Early With FreeKick

If you establish a strong credit profile as a teenager, you can potentially save more than $200,000 during your adulthood as you’ll be able to qualify for various financial services with useful perks. FreeKick assists you in building good credit with your parents’ help, starting from the age of 13. To activate the service, your parents must open an account for you. Here’s how to get started:

  1. Create an Account—Go to FreeKick.bank and choose a plan that best fits your needs and budget
  2. Set It and Forget It—When the account is activated, your credit will automatically start building over the next 12 months
  3. Keep Growing—After the first 12-month period passes, you can either close the account and get your full deposit back or renew it and keep building credit to ensure a solid financial future

Keep Your Identity Protected With FreeKick

In addition to establishing a good credit history, you need to make sure your credit profile is secure and protected from identity theft. Alarming statistics show that a child’s identity is stolen every 30 seconds, while students are one of the groups most frequently targeted by identity thieves.

To keep your personal and financial data safe, FreeKick offers comprehensive security features for minors and adults that help monitor and protect the identity of your whole family.

Services for Adult Children and ParentsServices for Minor Children
Credit profile monitoring
SSN monitoring
Dark web monitoring for personal information
Up to $1 million identity theft insurance
Full-service white-glove concierge credit restoration
Lost wallet protection
Court records monitoring
Change of address monitoring
Non-credit (Payday) loan monitoring
Free FICO® Score monthly
FICO® Score factors
Experian credit report monthly
Credit profile monitoring
SSN monitoring
Dark web monitoring for children’s personal information
Up to $1 million identity theft insurance
Full-service white-glove concierge credit restoration
Sex offender monitoring—based on sponsor parent’s address

FreeKick Pricing

FreeKick offers affordable plans regardless of your needs and budget. There are two pricing options to choose from, and the deposits on both plans are FDIC-insured up to $250,000. Find the details in the table below:

FDIC-Insured Deposit AmountPlan Fee
$3,000$0 (Free)
No deposit$149/year

Build a strong credit profile early and protect yourself from the risk of identity theft—sign up for FreeKick today.