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How Much Money Should a Teenager Save?

Teenager and saving in the same sentence? Perhaps it’s a bit too early to expect you to put aside some of your money in savings, or is it? How much money should a teenager save

Maybe you feel that you should be enjoying some carefree times at the mall with your friends, or at the newest spot, and keeping up with the latest iPhone.

With fun can also come some responsibility, meaning you can enjoy your life now while also building a better life for yourself in the future. You can start with saving.

Cultivating the discipline to put aside money for your future can go hand in hand with fun, it just means you have to develop responsible habits.

Regardless of how much money you earn, there’s always some that can be set aside for saving if you create the mindset for success.

As a teenager you’re starting to learn what being an adult will be all about, and money will be a big part of being a grown-up.

When you start saving while you’re young, you’ll be setting yourself up for attaining financial freedom early in life

Now the big question is, how much money should a teenager save?

How Much Should You Put Aside in Savings as a Teenager?

Any amount of money you save, no matter how small, is still a win on your financial journey.

That being said, it’s recommended that we all save at least 10% of our gross earnings.

To get a real head start on saving, why not try to save 10% of your net income (take-home pay) and consider that you may not have as many bills to pay right now, so you could even bump that percentage up to as high as 80% if you want to.

That would mean if you received gifts or a paycheque for $100, you should keep at least $10 of that money in a savings account somewhere, and consider saving up to $80 of it.

Consider how much money you need for your expenses, and what kind of lifestyle you like to live.

Try not to save only the bare minimum, but save the most that you can. If your lifestyle requires 100% percent of your income, it may be time to reconsider what you’re doing and an even better time to learn some money management skills.

Be aggressive in saving and follow that by being aggressive in growing your money.

How Can You Make Your Savings Grow?

There’s minimal benefit for letting your savings sit in a basic account.

Put your savings in an account that will grow your money. Consider opening an investment account if you’re of age, or talk to your parent/guardian about doing it with you.

It’s great to start learning how these accounts work while you’re still young, as compound interest will accumulate over the course of your investment. The longer the time period, the better it is for you.

As a word of caution, before investing in anything always do your research. Understand your investment properly, and know that get-rich-quick schemes are usually not a wise investment, somebody is profiting from that.

Good investments are those that grow steadily over time.

It’s Never too Early to Start Saving

It’s never too early to begin saving. The earlier you start, the easier it will be to build your wealth.

Not only will your money start growing early, but you’ll have developed the habit of saving money that will easily carry into adulthood.

So how much money should a teenager save? Let’s start with 10% of whatever you have coming your way and increase from there. If you don’t have money coming in, this is a good opportunity to start thinking about a side hustle.

By: Robert Puharich | September 25, 2021 |