“What’s the move” for this school year, you ask? Money moves. Living allowance to allowance isn’t fun. If you think you’re too young to earn some income or you’re the type to spend your birthday money the next day, keep reading.
Don’t worry, we’re not adding another class to your schedule – maybe just some homework:
Explore part-time opportunities: If you’re under 16 years old, earning income though a traditional part-time job may be off the table. However, there’s still several ways to make some cash all around you. Consider what you’re 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 you’re 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 you’re 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 – even when you don’t realize it. By having an awareness of this, you can be cognizant of the money wasted on fast fashion and “hype” products. Instead, focus on spending your money on items that will have a longer lifecycle.
Avoid debt: Now, we know it’s 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 don’t pay that back in a reasonable about of time, you’re in debt. It’s important to learn early on that going into debt is almost too easy if you aren’t financially responsible.
Track your spending: The word “budgeting” doesn’t have to be as involved or complex as you may think. You don’t need spreadsheets and calculators and you definitely don’t 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 “entertainment,” “dining out,” and “shopping.” Be sure to devote a specific amount or percentage of each paycheck to savings.
Create a savings routine: So you have some income, you’re able to do your own spending… now what? It’s time to create a solid savings routine that you can stick to. As a teen, you may be wondering, “what do I have to save for right now?” Sure, you don’t have to save for a house or retirement just yet, but there’s plenty of life goals you can get ahead on – like college or your first car, for example. No amount is too small to save. If you’re 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 you’re ready to take on some financial responsibility, tell mom and dad you’re 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 – 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 isn’t 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 you’re 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 – so you can borrow less – you’re already ahead of the rest. It may seem far away, but when it comes time to pay back that loan, you’ll 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
