Saving money can be difficult, especially when you’re a teenager. But with a little bit of effort and some creative thinking, it is possible to save money even if you don’t have a job.
Today, we’ll outline several of the best ways to save money as a teenager.
Why Do Teenagers Need to Save Money?
Teens need to save money for a variety of reasons. Maybe they need to make the down payment on a car. Maybe they want to save up for college. Or maybe they just want to travel.
The needs could be more immediate. Maybe they need to pay for things like a cell phone bill or car insurance, or their parents might ask them to pay for some entertainment costs such as dates or after-school snacks.
And hey: Some teens might be saving up money in case of an emergency. That’s just good teenage money management.
When Can Teenagers Start Saving Money?
Many teenagers begin thinking about saving money in the bank when they get their first jobs. However, saving money as a teenager is typically a good idea even if the teen doesn’t have a job.
Here are some of the best times for teenagers to start saving money:
- When they get their first paycheck
- Before they get their driver’s license and need to buy a car
- Before they go away to college and need to pay for room and board
- Whenever they come across extra money that isn’t needed right away
How to Save Money for a Teenager
No one is born with money management knowhow. It takes teaching, practice, trial, and error.
We can help you with the first part by providing you with a few tips about saving money as a teenager. And we’ll file these tips away into three categories:
- Establishing an account to save money
- Earning money (can’t save what you don’t have, after all)
- Habits and mindsets that will help you save money
Accounts That Help You Save Money
It’s possible that the most disciplined teens could stack their cash in a desk drawer and not touch it until they needed it. But opening an account of some time helps fight off temptation, offers more safety, and offers other benefits, such as helping you grow your money too.
So, let’s look at several accounts you might consider:
1. Savings Account
One of the best ways to start saving money as a teenager is to open up a savings account. When you put your money in a savings account, the bank holds and protects your money, and allows you to withdraw it from branches.
Many banks also offer incentives such as special interest rates (so, your money earns more money just by sitting there) or bonus gifts when you sign up for a savings account.
2. Checking Account/Debit Card
You and your parents might decide that a checking account (which typically is linked to a debit card) might be a better option for you.
A teen checking account typically won’t offer you as high an interest rate as a savings account. On the other hand, checking accounts are a more convenient way of spending the money you do save; you can withdraw cash at ATMs and branches, write checks to pay for things, or use your debit card to pay.
Related: The Best Debit Cards for Kids + Teens
3. Prepaid Debit Card
A prepaid debit card is a great way to save and spend if most of their money is going to come directly from their parents. Prepaid debit cards, rather than going through a bank or credit union, are instead run through stores and online apps. A parent loads the card with however much money they want, and the teenager can only spend that much; they can’t overdraft or otherwise spend more than they have.
Related: The Best Free Debit Cards for Kids + Teens
4. Investment Account
Teens who are interested in not just saving their money, but potentially growing some or all of it more aggressively than they can in a bank account, might consider an investment account. Teens don’t have many options, as most investment accounts require a person to be 18 to sign up, but they can participate in a few accounts, such as a joint brokerage account with their parent.
Teens can invest with a Fidelity® Youth Account
- Available: Sign up here
- Price: No account fees, no account minimum, no trading commissions
- Promotion: Teens get $50 on Fidelity® when they open an account; parents get $100 when they fund a new account
Is your teen interested in jumpstarting their financial future? Do you want them to build smart money habits along the way?
Of course you do! Learning early about saving, spending and investing can pay off big when you start on the right foot. And one tool that can help your teen get that jump is the Fidelity® Youth Account—a brokerage account owned by teens 13 to 17 that’s designed to help them start their investing journey. They can use their own brokerage account to start their investing journey by trading most U.S. stocks, exchange-traded funds (ETFs), and Fidelity mutual funds.
Your teen will also get a free debit card with no subscription fees, no account fees, no minimum balances, and no domestic ATM fees. And they can use this free debit card for teens4 to manage their cash and spend it whenever they need.
And as for building smart money habits? You and your teen can access Fidelity’s Dedicated Youth Learning Center, which is packed with materials developed specifically to help teens develop good financial habits.
Controls parents want and need
A parent or guardian must have or open a brokerage account with Fidelity® to open a Fidelity® Youth Account. For new Fidelity® customers, opening an account is easy, and there are no minimums and no account fees.
Parents and guardians have plenty of tools they can use to monitor their teen’s activity: They have online account access, can follow monthly statements and trade confirmations, and can view debit card transactions made in the account.
To make it even easier, you can set up alerts to notify you of trades, transactions, and cash management activity, keeping you firmly in the loop on actions your teen takes across the Fidelity® Youth Account’s suite of products.
If your teen has an interest in learning about investing and taking their first steps toward building their financial journey, you should consider opening a Fidelity® Youth Account. The account comes custom-built for their needs, which will help them become financially independent and start investing for their future.
Read more in our Fidelity Youth Account review.
- Your teen will get a $50 reward once they download the Fidelity mobile app and activate their Youth Account².
- No monthly fees or account minimums³.
- They can invest in stocks for as little as $1 with fractional shares.
- Your teen can learn to save and spend smarter with their own debit card with no domestic ATM fees⁴.
- Teens can link their account to mobile payment apps like Venmo and PayPal⁵.
- Parents can set up alerts and monitor their teen's account activity online, and through statements, trade confirmations and debit card transactions.
- Dedicated Youth Learning Center to help jumpstart your teen’s financial learning and build better money habits.
- No monthly account fees
- Signup offer available to new users
- Comprehensive financial suite for teens
- Parent must be a Fidelity account holder
- Account balance doesn't accumulate interest
- No chore or allowance system
Related: Best Banking Apps for Kids & Teens
5. Custodial Account
A custodial account is another way for teens to save, invest, earn compound interest on their accounts, and simply learn more about how the stock market works.
That said, they work a little differently. Unlike a joint account, where you can make investment decisions, parents open a custodial account for you in your name, and they make the investments within the account. But all funds must go toward you and your needs.
Typically, you receive full ownership of a custodial account when you reach age 18 or 21, depending on the state. You can use it to go to school, buy a house, supplement your income, or reach a big savings goal.
Open a custodial account through EarlyBird
- Available: Sign up here
- Price: $2.95/mo. for one child, $4.95/mo. for families with 2+ children
EarlyBird is a mobile app that allows parents and guardians to set up a Uniform Gift to Minors Act (UGMA) account—a type of custodial account—where they can quickly start investing for their children. It also allows friends and family to easily gift money to a child.
EarlyBird allows you to choose from five strategic portfolios made up entirely of exchange-traded funds (ETFs), with investing goals ranging from conservative to aggressive, based on your stated risk tolerance and overall investor profile.
If family and friends want to provide the teen with a gift but think money is too impersonal, EarlyBird allows them to record a video that’s sent along with their financial contribution, personalizing these moments for a lifetime. And if you’d like to give but the recipient doesn’t have an EarlyBird account, you can text them a link from the app to the recipient’s phone number. EarlyBird also has a “Moments” feature that allows parents to begin to save and share special milestones and memories alongside their investments.
An EarlyBird investment account costs $2.95 per month for one child, or $4.95 per month for multiple children. When parents or guardians set up a new custodial investment account through EarlyBird, they must start with a $15/month recurring contribution minimum. However, you can change that recurring contribution amount higher or lower as your budget allows or necessitates.
Consider opening an EarlyBird account today and receive $15 to get you started after opening your account.
- EarlyBird empowers parents, family and friends to invest in the next generation through custodial accounts.
- Send and receive financial gifts to invest in children.
- Offers managed and auto-rebalanced portfolios of ETF-based investments based on the child's age, investment goals, time horizon, risk tolerance, and other factors.
- Receive $15 to invest by opening an account today.
Related: How Old Do You Have to Be to Buy Stocks?
6. Educational Fund (529)
A 529 college savings plan, casually known as an educational fund, is a very specific type of savings account. These accounts, which vary from state to state, allow parents and children to save together and grow their money so it can be withdrawn (tax-free!) for college tuition and other education-related expenses.
529 plans with Backer
Backer, a hassle-free 529 Savings Plan where your family and friends can play a role, has helped families save over $20 million towards college in just minutes. 529 plans help teens afford college and other educational expenses by allowing parents and children alike to save and grow their money over time. That could keep your teen from having to take on costly student loans.
Backer allows you to invest in a portfolio of low-cost index funds, which include exposure to large-company stocks, small-cap stocks, international companies and U.S. government bonds.
- Backer allows you to invest your educational savings tax-free in a 529 plan and also allows for family and friends to help you to save more.
- Use low-cost index funds to invest in different asset classes, including stocks and bonds.
7. Money App
Even your phone can help you save money.
App stores are ripe with money apps for teenagers that can teach lessons about personal finance, keep teens’ money organized, and help control spending.
These apps typically allow teens to track expenses, set financial goals, and even find ways to save money on the things they buy most often.
Related: The 16 Best Money Apps for Kids
How to Earn Money
Of course, you can’t save what you don’t have. So here are some of the most common (and a few unconventional) ways for teens to make money that they can then put away.
8. Perform Chores and Earn an Allowance
Ask your family if they’d be open to giving you an allowance every week or month for chores you complete.
If they agree, take advantage by saving as much as possible toward specific goals you have. The more chores you complete, the more savings you’ll pile up.
Automate your allowance with Step
- Available: Sign up here
- Price: Free
The free Step Visa Card is a unique “hybrid” secured credit card that’s tailor-made for kids and teens. It has the safety of a debit card, but it functions like a Visa credit card—including the ability for children to build a credit history.
Parents, who sponsor the Step card for their child, add money to this FDIC-insured account and can determine how their child can spend. So they can add money for allowance on a per-chore basis, or put allowance on autopilot with regular, automated contributions to the account.
The Step Card is protected by Visa’s Fraud Protection and Zero Liability guarantee. That means if a teen’s card gets lost or stolen, or misplaced and fraudulent charges crop up, parents can dispute the charges within a certain time frame to avoid liability for paying.
The Step Card also boasts a great savings tool for kids. With Savings Roundup, small purchases are rounded up to the nearest dollar figure; that extra money is put toward a savings goal. (Example: Your child buys a cup of coffee for $2.75; Step rounds up to $3.00 and puts 25 cents toward a goal.)
One of the most unique and powerful features of the Step card is its ability to build your child’s credit history. With this optional feature, Step will report the past two years’ worth of information—transactions, payment history, and more—to the credit bureaus when your child turns 18. That can greatly improve their chances of starting adult life with a better credit score, which can help lower the cost of things like student loans and auto insurance.
- Step offers a no-fee FDIC insured bank account through Evolve Bank & Trust, Member FDIC
- Step helps to build your credit history with everyday purchases made on your debit card, even before you turn 18
- Buy and sell Bitcoin for as low as $1 (and soon stocks)
- Earn cash and crypto rewards when you use your Step Visa at participating merchants
- Send and receive money instantly, spend with Apple and Google Pay
- Pay allowance weekly, bi-weekly or monthly
- Track your card balance from the Step App
- Free secured card for kids, teens and young adults
- Helps build credit
- Buy and sell Bitcoin for as low as $1
- Free investment account for stocks
- No interest on deposits
For Step disclaimer, please see the fine print at the bottom of this article.
Related: Best Allowance and Chore Apps for Kids
9. Get a Part-Time Job
Working a part-time job, whether it’s after school or just during the summer, can help you save money fast because you’ll have a substantial income to put toward your goals. Plus, it gives you some experience in the workforce.
If you’re considering an after-school job, make sure you can balance the responsibility along with your studies. It’s nice to earn money as a teen, but you don’t want to sacrifice your grades to do it.
A summer job is an ideal situation for most teens. They usually provide enough hours to make some decent money, but not enough that you can’t enjoy your summer vacation.
Related: Online Jobs for Teens to Make Extra Money
10. Start a Small Business
Do you love washing cars or baking cupcakes for your friends and family? Do you spend hours playing a video game and live streaming to all your fans? If so, you might have what you need to start a small business, make your own money, and begin accumulating monthly savings.
You’ll need to consider a few things, such as whether you’ll have upfront costs (like buying equipment or software), how much you’ll charge, and how you’ll receive payments (cash, check, Stripe). You’ll also need to research business accounts and the best savings account for you.
This all might sound overwhelming, but if you succeed, you could get a massive head start on your financial future that will literally change how you live the rest of your life.
Related: How to Invest in Small Business Opportunities
11. Have a Garage Sale
A garage sale can be both fun, and a profitable one-time influx of cash, if you do it right.
First, make sure that you organize everything into categories so buyers know exactly where they are looking at when browsing. Keep things neatly arranged alphabetically or by price range.
Next, set up signs all over your neighborhood and advertise your sale on sites like Facebook and Nextdoor.
Lastly, be willing to negotiate. You’ll be surprised at how much even a few dollars here and there adds up!
12. Save Gift Money in a Bank Account
When you receive money as a gift from family members or friends, don’t rush to go spend it. Put it in a savings account (or in whatever account you’re using to save money). This will help you stay focused on saving goals instead of spending the money.
Developing Good Money Habits + A Healthy Mindset
The last thing you’ll need to do involves how you think and act. That is, you’ll need to start adopting a few good habits that generally help people save and spend wisely. You’ll also need to think about your money in a new way that prioritizes your savings goals over shorter-term impulses.
13. Set Financial Goals for Yourself
Whether it’s for college, buying a phone, or buying your first car, setting clear financial goals can help focus your saving efforts.
When you know what you’re saving up for, you know how much you need to save. From there, you can break down your large saving goals into smaller savings goals. Let’s say you want to save up $1,000 for a down payment for a car. Well, it’s hard to save $1,000 all at once. So set a goal of saving up $50 per week, and you’ll reach your goal in 20 weeks.
14. Make a Budget
Next, you need to make a budget—and stick to it.
Figure out how much money you bring in via jobs, allowance, etc. Then calculate how much you need to spend each month. Whatever’s left over is what you can allocate toward your savings goals.
After that, monitor how much money is actually coming in and how much you’re spending, and compare it to your budget. That will help you understand how long it will take you to reach your goal—and what you can change to reach that goal more quickly.
15. Don’t Let the Little Spends Add Up
A soda here and a pack of Pokemon cards here might not cost all that much each time you buy one. But little spends add up over time and can slow you down as you try to reach your savings goals. Do your best not to withdraw money for impulse buys; instead, remind yourself of what you’re saving toward.
16. Don’t Overspend on Expensive Items
If you do want to buy the occasional expensive item while still saving for another goal, be savvy about it. Many expensive items, such as phones and computers, go on sale occasionally, allowing you to spend less money and put more toward your goals. Track the price of the thing you want, and if it comes down significantly in price, consider buying it then. This takes patience, but it can keep your savings plan on track.
17. Buy Used Instead of New When Possible
One great thing about being a teenager is having access to student discounts and all sorts of secondhand goods at more affordable prices than brand-new ones.
So, whether you shop online or visit thrift stores, remember: Buying used can save you a lot of money in the long run.
18. Talk to Your Parents About What You’re Saving For
One great way to get motivated about saving money as a teenager is by letting others know what your goals are. We know you might not want to talk to your parents about it, but you should tell them what you’re trying to save for and why it’s important to you. Not only can they keep you accountable, but they can provide support along the way.
For example, many parents will offer to match the money you save for big goals. So, if you save $3,000 for a car, they might match it with $3,000, so you can buy a $6,000 car. That’s a lot better than raising $6,00 on your own!
19. Start Small
Don’t worry if you can’t do all of these things at once. That’s OK! Just start with a few of them and see how far they’ll take you.
Eventually, some of these habits will become easy for you, allowing you to focus on adding even more good habits. And the more you pick up, the better you’ll be at saving.
Related FAQs on Saving Money for Teenagers
How can a teenager save money without a job?
If you don’t have a job, there are still plenty of ways to save money. For example, you can collect change, ask for an allowance, and sell old possessions you don’t use anymore.
How much money should I save each month?
If you’re just trying to develop a savings habit, there’s no wrong answer; you can save as much money each month as you’d like.
If you’re saving with a specific financial goal in mind, you might want to use a savings calculator to figure out how much money to save each month.
What are some good savings goals for teenagers?
Some good goals for teenagers include buying a new phone or computer, saving up for college tuition, and putting away money for a car down payment.
Talk to your parents about what might be realistic and how you can contribute.
How can a 13-year-old save money?
If you’re 13 years old, some good ways to save money include collecting spare change, or doing odd jobs in your neighborhood, and putting that cash away in an extra savings account or an investment account with your parents.
How can a teenager save money fast?
There are many ways for a teenager to start saving money fast.
For example, some teenagers are better about saving when they open up a savings account at their local bank.
Earning more money means you can save more money, so some teenagers earn extra cash by doing chores around the house or running errands for family friends. Some teenagers get really creative, like starting a small yard work business or offering dog walking services.
And some teenagers also sell items they no longer need, such as old clothes, furniture, or electronics.
What should I do with my first paycheck as a teen?
You should open a savings or checking account when you get your first paycheck. It’s not easy to manage money, and when people simply cash their first paycheck, that money often gets spent really quickly.
Savings accounts are better for people who just want to save, while checking accounts are better for people who need to frequently spend the money they earn.
Related:
- How to Invest as a Teenager [Start Investing as a Minor Under 18]
- Should You Open a Child Bank Account with a Debit Card?
- 7 Best Investments for Kids [Investing for Children]
Terms and Conditions for Fidelity® Youth Account
The Fidelity® Youth Account can only be opened by a parent/guardian. Account eligibility limited to teens aged 13-17.
1 Limited Time Offer. Terms Apply. This offer is valid for new or existing Fidelity Brokerage Services LLC (“Fidelity’) customers who open through the following link https://www.fidelity.com/go/starter-pack and fund a new, eligible Fidelity account with a minimum of $50 on or after 07/20/2022 and have not otherwise previously taken advantage of Fidelity’s $50 for $100 cash offer. Offer is limited to one bonus award per individual.
2 Limited Time Offer. Terms Apply. Before opening a Fidelity® Youth Account, you should carefully read the account agreement and ensure that you fully understand your responsibilities to monitor and supervise your teen’s activity in the account.
3 Zero account minimums and zero account fees apply to retail brokerage accounts only. Expenses charged by investments (e.g., funds, managed accounts, and certain HSAs) and commissions, interest charges, or other expenses for transactions may still apply. See Fidelity.com/commissions for further details.
4 Your Youth Account will automatically be reimbursed for all ATM fees charged by other institutions while using the Fidelity® Debit Card at any ATM displaying the Visa®, Plus®, or Star® logos. The reimbursement will be credited to the account the same day the ATM fee is debited. Please note, for foreign transactions, there may be a 1% fee included in the amount charged to your account.
5 Venmo is a service of PayPal, Inc. Fidelity Investments and PayPal are independent entities and are not legally affiliated. Use a Venmo or PayPal account may be subject to their terms and conditions, including age requirements.
Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917
Terms and Conditions for Step
