How to Help Teenagers Build Sound Savings Habits

If you are like most parents, teachers, or adults, you may remember the days of being a teenager and thinking that the illustrious money tree really was out there somewhere, and your parents were just hiding it from you. This was a time before you had to worry about financial obligations, like paying bills to keep a roof over your head or even simply making a trip to the grocery store. Like most, you may often find yourself thinking, “If I knew then what I know now, I would’ve been way ahead of the game.” I believe it is because of this saying that we all owe it to the younger generations to do our best to educate and prepare them for life after the “bottomless pockets of mommy and daddy”.

Like teenagers of today, you may have worked part time jobs for minimum wage to afford little things you wanted – that new CD that just came out, or a trip to the beach with friends, or maybe it was something as simple as snacks from the local store. Whatever your goal was, you worked at that part time job to put some cash in your pocket, to be able to buy those items you wanted in the moment. But, how good were you at saving that money? You may have had a parental figure teaching you how to put a portion of it into a savings account, however, not everyone had this kind of guidance.


Try to picture the amount of money you would be able to put away if you didn’t have bills to pay. No rent, no cell phone bill, no car payments, nothing but filling up your gas tank to get you back and forth to work each day. This is the kind of life many teenagers live. With so little financial responsibility, saving is likely easier for them, which is why it’s important to teach teenagers how to save money early on.

So, how exactly can you help the teens in your life build sound saving habits?

  • Explain to them the difference between a need and a want, and make sure it is something they can relate to. For example, gas for their car is a need. Their sixth pair of Nike sneakers is not.
  • Teach them how to budget. What exactly are their expenses and what is their income? How can they use their budget to make sure they are saving exactly what they need to accomplish their goals?
  • Speaking of goals. Help them set goals they want to achieve, like purchasing a car, buying the perfect outfit for prom, going on a summer trip with friends, or taking a gap year after graduation. Starting teenagers off as goal-oriented as possible is a great way to help them make saving money a priority.
  • Tell them about the different features of savings accounts, like mobile banking for convenient money management, mobile check deposit, and receiving free money (interest) just by having money in a savings account. Compound interest is a fantastic tool to help anyone get a boost on their savings.
  • Teach them how to put a specific amount of money in their savings account each week, even if it’s a small amount. It adds up quickly.
  • If they are employed, encourage them to set up direct deposit so their regular paycheck gets deposited right into their account. They can even have their paycheck split so a pre-determined amount will go into their savings and the rest can go into a checking account.
  • Help them understand how they can reduce unnecessary spending, which will enable them to save more. I spend a lot of time doing an activity with students called “My Disappearing Dollars”. In this activity, the students track exactly where their money went for a week or two. Then, we show them just how quickly a daily stop at Dunkin Donuts, buying clothes just because and trips to the vending machine adds up. By doing this simple activity, we demonstrate how much “extra money” they would have if they just cut out some of the little things.

By following these steps, teenagers can start making their money grow and can develop a habit for long-term success. This will help them be ready to take on future financial obligations such as living on their own, paying off student debt, purchasing a home, starting a family and even preparing for retirement.

Let’s take that one single thought process of “If I knew then, what I know now…” and share our knowledge with the younger generations of today, in hopes of a better tomorrow, by making saving a priority.

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