Most teenagers dream about saving up for something big like a car, a trip or even college. But, turning those dreams into reality requires one important skill: budgeting.
Learning how to manage money as a teenager is not just a helpful life skill, it’s essential for reaching financial goals and building good habits for the future.
“Whether you’re getting an allowance or working a part-time job, it’s so helpful to start managing your money early,” economics teacher Claude Blanchard said.
Without good money habits, it’s easy to fall into the trap of overspending and struggling to save when it really matters.
For 17-year-old Aberihanna (Abe) Thornton, saving for her first car means putting away $100 at a time in an “unbreakable” drawer. “It’s hard to stay motivated, but my friends remind me of my goal,” Abe said.
Therefore, it’s important to have a support system when saving because staying motivated alone can be tough.
Independent living teacher Brooks Holuka emphasizes the importance of starting early. She recommends budgeting as early as 10 when kids might start earning money through chores or small jobs.
“The faster they’re exposed to budgeting, the more they’ll start paying attention to what’s going on around them,” Holuka said.
One effective method she suggests is the 50/30/20 rule: 50% of income goes to needs, 30% to wants, and 20% to savings.
“Not saving at least 20% of each paycheck is a common mistake,” Holuka said. “Setting up direct deposit to automatically move that 20% into a savings account is an easy way to build a habit of saving without even thinking about it.”
Staying consistent can be challenging. Abe admits that saving money takes discipline, but she remains motivated by focusing on her end goal.
Knowing I’m working toward something I really want helps me stay on track,” Abe said.
Budgeting may not be easy, but the payoff is worth it.
“It may be hard at the beginning,” Abe said. “But reaching your goal at the end is one of the most rewarding feelings.”
