Our top 5 ways for how to save money as a teenager
You’re young, you know you should start planning your future, but it seems scary, far too time-consuming and far too soon. It’s way down the list of priorities.
Don’t hate us, but while we’ve got your attention, maybe you could consider the following money saving tips (it’ll only take a minute – plus they’ll help you save and show what’s possible with your money):
1: The ‘B’ word
This word sends shivers down the spines of most fully grown adults, never mind those in their teens or early twenties. But a budget doesn’t have to be limiting, or mean you never go out and see your friends. A good budget should just give you some parameters to live inside, a bit like bowling when they put the barriers up stopping the ball constantly ending up in the gutters. You can still have fun, but you’re less likely to mess up… and more likely to get a strike! Start small, £10 a week, £20 a month. It all adds up, and before you know it (if you don’t spend it) you could surprise yourself with how much you’ve squirrelled away.
2: Workin’ 9 to 5
The absolute best way to kick start your savings pot is to get a job. Having a means of income massively helps your chances of succeeding in your goals. But we know that studying may mean you can’t devote time or brain power to something else.
3: Use your discount
If you’re a student it’s more than likely you’ll get a student discount. You’ve got a card that gets you a pretty much universal 10% off EVERYTHING. DON’T go buying things you don’t need just because you can, but DO use it to your advantage. After all it’s like having a superhero power!
4: Spend no money days
A few quid here, a few quid there, what’s it matter? Well, that coffee you’re buying to treat yourself each day could be adding up to £100s every year. It’s the same for those little impulse purchases; those items you don’t need but really, really want in the moment.
5: Plan ahead
Christmas, birthdays, holidays, car insurance – these are consistent. They aren’t ever going to go away and they happen on the same date every year. See them as a gift – yes they are annoying and expensive, but you already know they’ll happen, so they’re easy to plan for. Saving for these over the course of the year doesn’t hurt quite so much. Yes, this takes more restraint than not buying the coffee from point 4, but believe us when we say it’ll change your world.
“Great, I’m saving and not spending as much; but what am I supposed to do with this money?”
Brilliant question! Maybe you should consider an ISA (Individual Savings Account). There are many benefits including:
- Long term gains: If you’re looking to invest for at least five years, or longer, there’s a chance of growing your money faster than if you put savings into a regular savings account.
- Tax benefits: You won’t pay tax on any profits you make.
- Flexible: You can invest in the right opportunities for you.
- High investment opportunities: you can invest up to £20,000 each tax year.
- Child Trust Fund: These are children’s savings accounts made available to children born between 1st September 2002 and 2nd January 2011. You may have one that’s about to mature or has just matured. Moving this money to an ISA and adding to that fund could give you a great start in life.
It is worth noting however, that investing comes with risk
The value of your investments and any income from them can go down as well as up and you may not get back the original amount invested. Tax allowances and the benefits of tax-efficient accounts are subject to change and tax treatment depends upon your individual circumstances.
If you do have a Child Trust Fund and you’re interested in making your savings work harder, maybe we can point you in this direction.