Teaching Teens How to Save Money

How to save money as a teenager.

Whether you're working a part time job after school, doing random odd jobs in your neighborhood, or getting a stipend from your family, we can all agree on one thing. Having spending money as a teenager is a beautiful thing. Our years as teenagers are about expression of self and expansion into the world around us. One way we, the youth of the world, express ourselves is through the spending of massive amounts of money. Various reports over the last five years have claimed that parents are shelling out hundreds of dollars a month to fuel their teenager's spending habits.

According to CQ Press, in the year 2005, teenagers forked over more than 159 billion dollars in retail spending. Yes, BILLION. That puts a great deal of economic power into the hands of consumers who aren't allowed to do things like vote, smoke or drink legally.

So what does this mean to a teenager who actually wants to hoard their cash for bigger things? More temptation, for one. Peer pressure, impulse spending, large sums of cash just waiting to be spent, and the mall is a prime target for after school casual meetings. You're going to go out and spend time with your friends, you're going to want to spend money.

Let me first tell you, young saver, spending a little money is okay. Just like those who start a new diet, you're about to begin depriving yourself of all the naughty things you think you want, but really don't need, and just like a new dieter, you're going to want to set aside one day every so often when you can treat yourself. There is a pretty simple method to this:

1. Clearly define your goal amount, the dollar figure you're saving toward. By clearly marking your goal and keeping it fresh in your mind, you're creating a boundary for your spending. It's a rickety old fence right now, but a boundary nonetheless.
2. Identify your current expenses in two categories, Needs and Wants. Your needs list should include things like a moderate amount for food, gasoline if you drive a car, and twenty bucks or so for "fun money." Your wants list should include pretty much everything else. You're building a mature goal here, so be brutally honest with yourself. You may be surprised how much lands on your Want side.
3. Talk to your parents at length about your goals. Alright, I'll give you a second to groan about this. Done? Good, then listen closely. Your parents have had to save money at some point in their lives. Believe me, it's true. If you sit down and have a logical, mature discussion with them regarding taking responsible control of your finances, you may find yourself earning a bit of respect and admiration from your folks. You will definitely get more specific and localized advice.
4. Eat more meals at home with your family. It may sound a little wacky, but your parents are already buying food with you in mind. They've been doing it for years and you've been eating at home all this time, why not keep up the trend? Instead of spending $8-$12 having dinner and dessert out with your friends every night of the week, why not spend a few nights at home? Clear it with your parents for your friends to come over for dinner one night every other week and you'll develop a balance between skipping out on a pizza dinner in town and entertaining your friends on your home turf.
5. Figure out where the money you're saving is being kept secure. Whether you're investing in a fire-safe lockbox, a piggy bank, or you've got mom and dad opening a savings account in your name, you need to figure out something. In the case of a lockbox or a piggy bank, leave those things in your parent's control. Afraid your mom and dad may take advantage of your cache of cash? Have them take you to the bank with them when they go, and while they're at the counter ask the nice bank teller to draw you up a cashier's check payable to you. This means that only you can retrieve the cash, and a cashier's check is vastly more portable than a pickle jar of pennies.
6. Don't deny yourself TOO much fun. Remember that you are still young. You should be enjoying yourself, having a good time and exploring who you are shaping up to be.

In the end, how much you save will truly be defined by how resolved you are at holding on to what you have. You can save however much you can tolerate not spending.