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 your 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!teen girl putting money into mason jar, text overlay "how to save money as a teen even without a job"

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

We’ll talk about these challenges, and then head into how to actually save money as a teenager. And listen up, because this is a skill set that you definitely want your teen to take with them into their 20s.

But first things first, let’s discuss the difference between saving money, and saving 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 you need to know the difference between each. In fact, knowing that difference will put you FAR ahead of many adults.

#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 then 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 or “saving money” put into your savings account? Zero. Zilch. Nada.

#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 looked 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.

We’re going to make sure your savings account actually grows, so listen up to the next sections!

How to Save Money as 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.

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 simple 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, you need 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, 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

Golden Rule #2: Set Up a Savings Space

You need somewhere to actually put your extra money that you haven’t spent. I call this your Savings Space.

Savings spaces can be a savings account, a mason jar, in a compartment in your 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 you interest just for keeping 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 to an ATM for easy withdrawals

If you’re a minor, then you’ll need to have your guardian help you open a custodial savings account.

Golden Rule #3: Save Towards Something

Here’s my final golden rule for saving more money as a teenager: you want to be saving towards a goal of some sort.

You could choose a short-term savings goal, or a long-term savings goal (and you 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 check out this free printable on how to choose your next savings goal.

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 you 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 you don’t have a job-job. That’s fine – many teens do not.

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

Here are several different ways to do just that:

  • Negotiate an allowance with your parents
  • Find a need around your home, and negotiate pay with your parents after you 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 your 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, you 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 save from their paycheck, 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 has 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.

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

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, you have probably the least amount of money responsibilities you’ll have in your entire life.

Which means…you should take advantage of this situation and save a much higher percentage of your income towards both things you want AND things you’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?

If you’re a teen, then 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.)

Bonus Rule: Find a Way to Get Your Savings Matched

What do I mean by get your savings matched?

In the adult world, sometimes when you save money, someone else matches your contributions up to a certain percent. 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 for the same thing as a teen? It will make your savings grow much faster.

Here are three ways you can get matched contributions as a teenager:

  • Ask your Parents or Grandparents: If your parents know that you have a plan for your money – say, you’re setting aside funds for a car, or for college, or for something really, really important to you – then they are more likely to match some of your own contributions and get you to your savings goal faster.
  • Get a Savings Account: You can think of interest earned as “matched” contributions. You contribute as much savings as you can, and then the bank gives you some money (typically interest is between 0.5% and 2.15% per year).
  • Find a Bank Opening Bonus: If you 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 You Just Can’t Seem to Save Money as a Teen?

Sometimes, you just can’t seem 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 teach you how to diagnose your savings problem so that you can move forward and save more money. And this is a skill that will serve you 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, 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 afterwards.

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 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 situation, once you figure out where your savings is leaking out of, you can start working on a solution.

Resources to help with earning more income:

Resources to help with spending less money:

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 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 you can cut some of your entertainment spending – you know, when you hangout with friends – then you’ll be able to use that towards your savings.

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

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

Let me say that a different way: your social life does not have to suffer just because you are going to be prioritizing saving your money moving forward.

Here are 4 fun and free teen activities to suggest to your buddies the next time you all 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? Set a savings goal, and then talk to your friends about it. Bring them along in the process – meaning, suggest that your entire group works together on their own savings goals.

You guys can hold each other accountable!

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

If you do nothing but make sacrifices now to get towards your savings goal, then you 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 do that to yourself! Create a few mini-milestone rewards you’ll allow yourself along the way. For example, if you’re saving up for a used car, that will take you awhile.

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

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

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

Strategy #5: Make a Strategic Christmas and Birthday List

Instead of buying each and everything that you want throughout the year, keep a wish list.

When you see something that you want, write it down. The next time a relative or Mom and Dad asks you what you would like for your birthday or Christmas or whatever other holiday where you get gifts, you can name off the things you would’ve purchased yourself.

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

I hope I’ve shown you how to save money as a teenager, whether you have a job or don’t. Use some of the strategies above, and you’ll be setting yourself up for a bright future!

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Amanda L. Grossman is a Certified Financial Education Instructor, a 2016 Plutus Foundation Grant Recipient, and founder of Money Prodigy. Amanda's kid money work has been featured on Experian, GoBankingRates, PT Money, CA.gov, Rockstar Finance, the Houston Chronicle, and Colonial Life. Read more here.