How to Save Money as a Teen (With or WITHOUT a Job)

I share my savings tips for how to save money as a teenager with or without a job. We also discuss how much should a teenager save from paycheck.

How to save money as a teen? Especially when their income might change week-to-week, or even be non-existent.

You likely know how important saving money as a teenager is – that’s why you’re reading this post!

But there are some special challenges that can come up when teens try to consistently save their money.

We’ll talk about these challenges throughout, and then head into how to actually save money as a teenager.

How to Save Money as a Teen

Before we get into the nuts and bolts of how to save money as a teenager, let’s talk about how to save money, period.

Whether you're a teen, a kid, or an adult.

The way you save money is very simple:

You spend less than you earn. And then you “bank it”, by putting that extra money into a savings space (like a savings account).

Don’t you love how simple that is?

Well…simple in definition, but not always easy in execution – I get that.

So, let’s break it down into my 3 Golden Rules for saving money.

Golden Rule #1: Spend Less than You Earn

For starters, your teen needs to actually have an income source.

Teenagers can have any of the following income sources:

• Allowance
• Chore commissions
• Job (after school, online jobs for teens, weekends, job apps for teens, summer positions, seasonal work, etc.)
• Paid internships
• Gig income (like a job, but you only work as you pick up things to do here and there, so less consistent)
• Birthday/Christmas/Easter/holiday money/graduation money (here are smart ways to spend graduation money)

Want a job but don't want one? Here's a 3-week job search plan for how to get a job as a teenager.

Golden Rule #2: Set Up a Savings Space

Your teenager will need somewhere to actually put the extra money that they haven’t spent. I call this your Savings Space. And it's a great way to encourage saving in kids and teens.

Savings spaces can be a savings account, a mason jar, a compartment in their wallet, etc.

However, a GOOD Savings Space meets the following:

• Earns you money on your money, from compound interest
• Protects your money, both from theft and from other issues
• Makes it a bit harder for you to actually spend it

Taking all three of these into consideration, I would say that a savings account is the best Savings Space. That’s because a Savings Account at an FDIC-insured bank (most are – but you definitely want to check) can:

• Pay your interest just to keep your money there (learn about compound interest)
• Protect your savings from theft, as well as from banks going bankrupt (that’s partly why you want the FDIC stamp of approval)
• Takes a few days for you to be able to transfer the money to a checking account, and is not set up as an ATM for easy withdrawals

Since your teenager is a minor, you or a guardian will need to help them open a custodial savings account. Also, here are banking worksheets (PDFs) and banking activities for kids and teens to learn more about this.

Golden Rule #3: Save Towards Something

Here’s my final golden rule for saving more money as a teenager: you'll want to guide your teen to save money toward a goal of some sort.

They can choose a short-term savings goal or a long-term savings goal (and they might want to choose both at the same time, seeing how college or a used car might be on the horizon).

Here’s my article on things to save up for as a teenager – lots of ideas there.

Also, you’ll definitely want to help your teen choose their next savings goal by printing out this freebie below:

Now that we’ve discussed how to save money as a teenager, I want to address something else that many teens face – trying to save money when they don’t have a job.

How to Save Money as a Teenager Without a Job

Saving money without a job gets kind of dicey, for anyone.  I mean, if you’ve got no income source, then how can you save any of that?

Let’s say your teen doesn’t have a job-job. That’s fine – many teens do not.

How can they source money to set aside in savings then?

Here are several different ways to do just that:

• Negotiate an allowance with their parents
• Find a need around their home, and negotiate pay with their parents to fill that need (such as cleaning out the garage, setting up a family command center, or being the laundry czar)
• Selling something either in-person or online
• Getting an online job (here’s my list of 25 online teenager jobs that pay)
• Picking up gigs (again, take a look at those 25 online teen jobs)
• Providing a service for someone, such as babysitting (Mom-and-Dad Date Night Out service), or washing cars
• Saving from any birthday, Christmas, graduation, or other special money you receive
• Entering a youth entrepreneur competition and winning prize money
• Asking to be in charge of their clothing budget for the upcoming school year, then finding ways to cut costs (such as sales, coupons, and using last year’s backpack) and saving the rest of the money

And, of course, they could also get a job. If your parents are cool with it, that is.

Here’s my guide on a teen’s first job, as well as a parent’s guide on conversations to have with your teenager when they get their first paycheck.

How Much Money Should a Teenager Save?

“Should” is an interesting word because it’s conditional, meaning you need to know all the conditions and variables involved in a situation before being able to answer a question with it.

When thinking about how much money a teenager should start saving from their paycheck or other sources, there are all kinds of variables to take into consideration.

Like…

• Does the teenager have a job? Are they allowed to get a job?
• How much does the teenager make?
• What money responsibilities have the parent given their teenager to pay for themselves?
• What future, large, expenses are coming up that the teen will need to contribute towards or pay for fully?

Even so, I want to give you some guidelines to go by so that you can see what might fit your own teen’s situation.

Psst: definitely check out my teenage money management tips article for more info on how to manage your money as a teen. This article on 3 sample budgets for 18-year-olds will help, too.

Teen Savings Guidelines – How Much Should a Teenager Save from Paycheck?

Read through this section for some teen-saving guidelines.

And if you need help convincing your teen to save money? Here are my 9 reasons for a teen to save money, written from the perspective of a teenager.

Rule #1: Save More than 10%

In the adult world, we’re told that we should at least set aside 10% of each of our paychecks. BUT, that amount is so low because when you’re an adult, you have lots of other money obligations and responsibilities to pay for – like rent/mortgage, car insurance, family data plans, health insurance premiums, etc.

As a teenager, your child will probably have the least amount of money responsibilities they’ll have in their entire life.

Which means…they should take advantage of this situation and save a much higher percentage of their income towards both things they want AND things they’ll need to pay for in the coming future!

Rule #2: Save Towards the Next Big Purchase on the Horizon

This sounds vague, but hear me out.

What is the next big purchase you have on the horizon?

For teens, that likely could be:

• Used Car
• First month’s rent/last month’s rent/security deposit for a first apartment
• College (things like textbooks, tuition, living costs, etc.)
• Your first iPhone (how to save up for an iPhone as a kid)

Bonus Rule: Find a Way to Match their savings

What do I mean by matching your teen's savings?

In the adult world, sometimes when you save money, someone else matches your contributions up to a certain percentage. For example, in some retirement plans (called 401(k)s), an employer may match your own contributions up to 3%. So, you contribute 3% of your own money towards retirement, and then your employer kicks in another 3%.

Well, why not try the same thing for your teen? It will make their savings grow much faster.

Here are three ways you can match contributions for your teenager:

• Parent or Grandparent Match: If your teen has a plan for their money – say, they’re setting aside funds for a car, or for college, or for something really, really important to them – then you might want to help them out by matching their contributions so that they can get to their savings goal faster.
• Get a Savings Account: Think of interest earned as “matched” contributions. Your teen can contribute as many savings as possible, and then the bank gives them some money (typically interest is between 0.5% and 2.15% per year).
• Find a Bank Opening Bonus: If you help your teen open up a custodial savings account, then see if you can find not only a great interest rate (hint: this will likely be an online bank, as interest rates from online banks are higher) but an opening bonus for depositing $XXX amount of dollars.

What if Your Teen Just Can’t Seem to Save Money?

Sometimes, your teen is just not going to figure out a way to save money, and you might not be able to figure out why.

It’s okay – it’s a good thing you’re reading this.

I want to help teach you how to diagnose your teen's savings problem so that they can save more money.

This is a skill that will serve them quite well as an adult.

There are three reasons why you aren’t saving any money or enough money (here’s where I break down nitty-gritty reasons why teens and kids aren’t saving money, in case you’re curious):

Reason #1: You Don’t Earn Enough Income

You don’t earn enough money to save money. Meaning, that you earn just enough to cover your true expenses (not “want” expenses).

Reason #2: You Spend Too Much

You spend too much of the money that you do earn on wants, and there’s nothing left to save afterward. Here's how to spend less money as a teen.

Reason #3: You Both Don’t Earn Enough AND You Spend Too Much

You have some mixture of both of these issues – both not earning enough income to cover your needs, AND, spending too much of that income on both needs and wants.  

Since the minimum wage is currently $7.25/hour, and since teens spend an average of $2,600/year on clothing and food…I think it’s safe to say that many teenagers can’t save enough money because of Reason #3 – both not earning enough AND spending too much, at the same time.

Whatever your teen's situation, once you both figure out where their savings are leaking out of, then they can start working on a solution.

Resources to help with earning more income:

• 25+ Online Jobs for Teenagers that Pay
• 9 Strategies for Teenagers to Get a Job (WITHOUT a Driver’s License)
• Guide to Teen’s First Job
• How to Consult Around Your Home for More Allowance Money (see Entrepreneurial Project #2)
• 13 Kid and Teen Entrepreneur Books

Resources to help with spending less money:

• 47 Cheap Date Ideas for Teenage Couples
• Free Teen Budget Worksheets
• How to Manage Your Money as a Teenager
• How to Spend Less Money as a Teen

Alright…I want to leave you with one more thing: lots of great savings strategies specifically for teens.

5 Strategies for How to Save Money as a Teenager

Ready to take your teen's money-saving abilities up a few notches?

Let me give you 5 strategies for saving money as a teenager.

Strategy #1: Learn how to hang out with friends doing free things

If your teen can cut some of their entertainment spending – you know, when they hang out with friends – then they’ll be able to use that towards savings.

Notice how I didn’t say to cut out their hangout TIME with friends, only the money they’re spending?

There are LOADS of activities that teenagers can do together that are virtually free.

Let me say that a different way: your teen's social life does not have to suffer just because they're going to be prioritizing saving money moving forward.

Here are 4 fun and free teen activities to suggest to your teen and their friends the next time they want to hang out:

• Play Pudding Pictionary: This is actually quite hilarious. Print out free Pictionary cards here, make a batch of chocolate pudding, and have your friends over for some fun.
• Take an Online Yoga or Workout Class Together: There are tons of free workout videos on YouTube. You can invite your friends over (or suggest you do this at their house), and get in a yoga session, a Zumba session, or even some belly dancing.
• Set Up an Outdoor Movie: Does one of your friends’ parents own a movie projector? Ask if they can host an outdoor movie.
• Host an Escape Room at Your Home: There are several free Escape Room printables you can use to host your own event.

Strategy #2: Bring Your Friends Along with You

Friends are critically important to a teenager’s life. I get that.

So, why not use that to your advantage? Have your teen set a savings goal, and then talk to their friends about it. Bring them along in the process – meaning, have your teen suggest that their entire group work together on their own savings goals.

They can hold each other accountable!

Strategy #3: Don’t Forget to Reward Themselves Along the Way

If your teen does nothing but make sacrifices now to get towards their savings goal, then they might either:

1. Get resentful at not being able to spend anything, and quit
2. Decide to never save up for anything again

Don’t let them do that to themselves! Create a few mini-milestone rewards they’ll allow themselves along the way. For example, if they’re saving up for a used car, that will take a while.

Fuel motivation by giving themselves a mini treat (here’s how to reward yourself for $5 or less) for every $500 they save up.

Strategy #4: Do a “$5-More” Savings Challenge

Each paycheck or allowance that they receive, is to save $5 more than they did from the last paycheck or allowance payday. See how far they can take this!

Strategy #5: Make a Strategic Christmas and Birthday List

Instead of your teen buying each and everything that they want throughout the year, suggest that they keep a wish list.

When they see something they want, write it down. The next time a relative or Mom and Dad asks them what they'd like for a birthday or Christmas, etc., they can name off the things they would’ve purchased themselves.

This will free up more of their money to put into savings (while still getting some of the things they want to buy).

Finally, I need to talk about one more thing with you:

the difference between “saving money” (like at the bottom of a receipt, or on a sale), and saving actual money in a bank account.

Trust me – it’s something a lot of people don’t realize!

Knowing the Difference Between Saving Money, And Saving Money

Weird thing to say, right? I mean, why is there a difference between saving money and saving money?

The fact is, we are bombarded daily with marketing and advertising messages that tell us how much money we’re saving.

Just look at the bottom of your last receipt – it says you “saved” something like $4.52, or $14.56.

But…did you actually SAVE that money? Meaning, did that money magically appear in your savings account, to be used at some future date?

No. Not unless you did something I like to call “bank it”.

So, there are two types of “saving money”, and your teen needs to know the difference between each. In fact, knowing that difference will put them FAR ahead of many adults.

The #1 Way to Save Money

You can “save money” by using store coupons, manufacturer coupons, discounts, sales, and shopping the clearance rack. This means you’ll spend less than you were going to spend (though, not all the time – how many times have you walked out of a clearance situation with 5-6 bags you hadn’t planned on?), and so you “saved” money from the original amount you had budgeted.

How much extra does this type of “saving money” put into your savings account? Zero. Zilch. Nada.

The #2 Way to Save Money

This is by far my favorite way – and certainly the subject of this article. You can save money by actually depositing money into your savings account.

Do you see the difference between the two?

It’s not something most people talk about, but it’s so important. Because you can go through life and think that you’re saving tons of money if you look at all of the bottom of your receipts.

But at the end of the day, you didn’t increase your net worth at all (i.e., you didn’t grow your savings account) using this method.

I hope I’ve shown you how to save money as a teenager, whether your teen has a job or not. Use some of the strategies above, and you'll be helping your teen set themselves up for a bright future!