โWhatโs the moveโ for this school year, you ask? Money moves. Living allowance to allowance isnโt fun. If you think youโre too young to earn some income or youโre the type to spend your birthday money the next day, keep reading.
Donโt worry, weโre not adding another class to your schedule โ maybe just some homework:
Explore part-time opportunities: If youโre under 16 years old, earning income though a traditional part-time job may be off the table. However, thereโs still several ways to make some cash all around you. Consider what youโre capable of, from babysitting to lawn mowing, and dive into it. Before you know it, you could be the owner of your own little business! If youโre over 16 years old, what are you waiting for? Earning your own money and having some autonomy over your spending and savings is incredibly rewarding and a great way to gain independence from mom and dad.
Be wary of peer pressure: At this age, peer pressure is all around you, even if youโre unaware of it. From a classmate having the hottest shoes on the market to your favorite influencer posting a haul, products are essentially being sold to you 24/7 โ even when you donโt realize it. By having an awareness of this, you can be cognizant of the money wasted on fast fashion and โhypeโ products. Instead, focus on spending your money on items that will have a longer lifecycle.
Avoid debt: Now, we know itโs nearly impossible to be in credit card debt as a teenager. But, borrowing money and not being able to pay it back is real. That 20 bucks you borrowed from mom to grab lunch with a friend? Or that $5 a friend spotted you? Well, if you donโt pay that back in a reasonable about of time, youโre in debt. Itโs important to learn early on that going into debt is almost too easy if you arenโt financially responsible.
Track your spending: The word โbudgetingโ doesnโt have to be as involved or complex as you may think. You donโt need spreadsheets and calculators and you definitely donโt need to devote more than an hour a week to it. Luckily, easy-to-use budgeting apps are an excellent resource for teens to track their earning, spending, and saving. Since bills may not be on your radar right now, you can keep it super simple. Start with expense categories like โentertainment,โ โdining out,โ and โshopping.โ Be sure to devote a specific amount or percentage of each paycheck to savings.
Create a savings routine: So you have some income, youโre able to do your own spendingโฆ now what? Itโs time to create a solid savings routine that you can stick to. As a teen, you may be wondering, โwhat do I have to save for right now?โ Sure, you donโt have to save for a house or retirement just yet, but thereโs plenty of life goals you can get ahead on โ like college or your first car, for example. No amount is too small to save. If youโre not earning too much right now, start with just $10 or 10% of each paycheck.
Open a checking and savings account: Goodbye piggy back, hello debit card! Once you feel like youโre ready to take on some financial responsibility, tell mom and dad youโre ready to head to the bank and open a checking and/or savings account. Be sure to ask your banker any questions you may have, like account minimums, overdraft fees, and how to understand your monthly statement.
Financial literacy: Now, this may be the only one that feels a bit like a homework assignment. At this age, there is so many opportunities around you to learn about financial literacy. Most high schools over some type of class like this โ accounting, personal finance, introduction to business. Take these classes not only to fulfill an elective requirement but to gain some valuable life guidance, too. If taking a class at your high school isnโt an option, check out your local library, schools, or community centers for similar sessions.
Anticipate college expenses: Whether your parents are able to help you out or youโre planning to take out a large loan, college tuition and expenses can get, well, expensive. Even if you set enough cash aside to cover some books or dorm essentials โ so you can borrow less โ youโre already ahead of the rest. It may seem far away, but when it comes time to pay back that loan, youโll thank your past self for taking initiative and being financially responsible.
Have a wonderful school year! For more information on checking and savings accounts, please visit www.PennCommunityBank.com
