Ten Simple Tips for Teens Managing Money

When I was 15 years old, I got my first job filing documents at my dad’s office. Eventually, I  graduated from that position and got various jobs working as a pharmacy clerk, retail associate at a video game store, and burger cook—all by the time I was 18. Despite all the time I spent earning money as a teenager, I never really understood how important it was to manage my finances. All I knew was that the more I worked, the more I could buy. And while I certainly had fun, my attitude towards managing money wasn’t the best for my future.

One of the most important parts of being a teen is learning about money and budgeting. As you take your first steps towards adulthood, it’s vital to know how your financial decisions will affect your future and how you can best prepare for financial independence. Learning how to manage your money early is also an effective way of avoiding financial stress.

Without further ado, here are Troomi’s top ten tips for teens managing money:

1. Track Your Spending

The first step in learning to manage money is knowing where your money goes. Get to know your spending habits a little better by keeping a record of what and where you spend. Every time you make a purchase, whether you’re buying a gallon of gas or an in-game feature on that cool new video game, write it down. At the end of the week, total everything up. You’ll be surprised at how much you spend on little things and how quickly those expenses build up. 

2. Create a Budget Plan

Once you know how much you’re spending and where, start making a budget plan. Review your earnings and spendings with a parent or trusted adult, and create a plan that works for you and your habits. If you don’t know where to start, try setting some short-term and long-term financial goals. Knowing your financial priorities is a great way to determine what type of budget you should create. 

Your phone is an amazing tool when it comes to budgeting. Apps like Greenlight make it easy for kids and teens alike to learn how to spend, invest, save, and give. Greenlight is available as a KidSmart® App on Troomi smartphones with the Discover plan. Click here to learn more about what other cool apps your kid-friendly Troomi phone can use!

3. Practice Self-Control

When it comes to managing money, self-control is the name of the game. The hardest part of budgeting is sticking to the original plan, so use this as an opportunity to practice your self-discipline. It might be tempting to buy that new album on special-edition vinyl (speaking from experience, here), but if it doesn’t fit into your budget, don’t do it! 

Take time to sit with financial decisions before you make them, and remember that life is long. While the instant gratification of spending money might feel good at the moment, it might not feel as good further down the road.

4. Ask Someone to Keep You Responsible

It’s important to develop self-control, but it’s also beneficial to have a parent or guardian hold you responsible for your financial decisions. Be open to discussing your finances with your parents. It might come as a shock, but they were young once and had to learn about managing money, too! Don’t hesitate to ask any questions you have. With someone supporting you and holding you responsible for your budget, you’ll be surprised how much smarter with your money you can be. 

5. Don’t Spend Money You Don’t Have

When you have a credit card, it’s easy to fall into the trap of spending money you don’t have. You might be thinking, “Oh, it’s no big deal. I’ll be able to pay it back later.” Well, that “later” will come sooner than you think.

Make sure that you can afford big purchases before you make them. If you don’t pay credit card bills back on time, the interest rate goes up and your credit score goes down. Your credit score may not be important now, but if it gets too low, your future self will experience higher insurance rates, have a harder time renting an apartment, and have more difficulty getting approved for loans.

6. Use Your Student ID for Discounts

Your student ID gets you into football games and lets you check out books from the school library—but did you know that it also gets you some pretty sweet deals? Many local stores and venues, like museums, offer a small discount to students, which can range anywhere from 10% to 50% off the regular price. If the place you’re at doesn’t have a student price listed, try asking for a discount anyway; it might surprise you how many places offer one!

7. Start Building an Emergency Fund

The world is always changing, and it’s impossible to predict when a sudden emergency could strike. When you’re faced with sudden medical expenses or a natural disaster, it’s good to have some money saved up to help you through the situation. Start saving and building your emergency fund now!

If you can afford to, start by putting 20% of every paycheck into a savings account. This way, you’ll have a large nest-egg saved up in case you have sudden medical bills or unplanned expenses that need covering.

8. Prune Your Unused Subscription Services

Our modern world is built on technology and entertainment. Between all the music and movie streaming services out there, a huge chunk of your change likely goes towards entertainment. 

Consider how much you actually use the streaming platforms you’re subscribed to. Do you really need Netflix, HBO Max, Hulu, Amazon Video, and Paramount Plus? If you use any of these services less than you think you should, don’t be afraid to cut them out completely. You can always reevaluate and resubscribe later, but you can’t get back that money that you’ve spent on something you never use.

9. Learn How Taxes Work

Whether you’re a citizen of the United States or a resident from another country (hello to our international readers!), if you make money, you have to pay taxes. Tax is money that people pay to the government. The amount of tax you pay is a percentage based on your income and the amount of property you own. The tax you pay is used to finance government jobs and services like schools, libraries, and national parks. 

If you have a job, part of your paycheck will go towards your income tax. Ask your parents or guardians about the different types of tax you will pay (parents: click here for a kid-friendly tax explanation from Parents magazine). Don’t let yourself get too overwhelmed, though; online services like TurboTax make it easy to get your taxes done on time. 

10. Treat Yourself Every Now and Then

One of the most important parts of managing money is knowing how to spend it. Once you’ve learned more about your spending habits and created a functional budget, set aside some money to buy yourself something nice. After all, you’ve worked hard for the money you have, and you deserve to treat yourself to a gift or cool experience every now and then! 
Of course, the keywords here are every now and then. Remember to stick to your budget and be mindful with your money—I suspect you’ll thank me later.