Top 5 money management tips for teens

Creating good money habits from a young age could help you build the future you want. And it doesn't have to be complicated.

From saving to budgeting, our guide runs through some of the best ways to get a handle on your finances - while still enjoying your life.

Money tips for teens

Whether your goal is to buy a house, start a business, go travelling or simply have some money put away for the future, our money saving tips could help you get started.

1. Make a plan

It's very easy to spend your money here and there without realising. We've all been there.

This is where creating a plan can help. Think about your big life goals - university, learning to drive, buying your first home.

Divide these into short-term, medium-term and long-term goals, and figure out how much you need for each.

These goals will help you stay motivated, so don't skip this one!

Planning to buy your first home one day?

Owning your first place might seem a way off. But let's face it - it's a huge financial commitment. So the earlier you start putting your money away the better.

Our Lifetime ISA could help you build your deposit fund quicker, thanks to the generous government bonus which gives you 25% on top of what you put in.

Putting in the maximum £4,000 each year will get you an extra £1,000 each year towards your first home!

Just be aware that if you don't use your lifetime ISA towards buying your first home then you'll have to pay a 25% government withdrawal charge (unless you take the money out after the age of 60). This could leave you with less than you put in.

Open a OneFamily Lifetime ISA

2. Set a realistic budget

Making a budget could help you save towards your goals.

Budgeting sounds boring, but it's basically planning how you'll spend your money each month - including putting money away for your future goals.

It's good to start with your immediate costs. These include rent, travel and food. If you can, put some money aside as soon as you get paid so you know these costs are covered.

Next take a look at the non-essential things you'll need to spend money on each month. This could be birthday presents, clothes or travelling to a gig.

Once you've budgeted for these expenses, if you have any money left then decide how much you want to put away for the future.

At the end of the month, look at how you did against your budget.

If you ended up spending more than you budgeted for, don't be too hard on yourself. You might just need to tweak your budget to make it more realistic for you.

3. Track your spending

Sticking to a budget is hard, even when you're motivated by exciting future goals!

This is where taking a good look at your spending habits is important. You might want to use a money app to track what you're spending your money on.

Those 'little and often' purchases can add up fast - you might be surprised!

4. Choose whether you want to save or invest your money

Broadly speaking, there are two ways to potentially grow your money: saving or investing.

Saving means putting your money into an account where it'll build interest, like some current accounts do. The amount you put in can't go down but how much it grows by depends on interest rates, which can vary.

Investing, on the other hand, typically means paying your money into an investment fund along with other investors' money. The investment fund is used to buy various different types of investments: things like shares in companies, property and corporate and government bonds.

Your money increases or decreases as the value of those assets changes. When you want to withdraw your money, you'll "sell" your shares at their current price.

The main factor to consider when choosing between saving and investing is how much risk you're comfortable taking and how long you'll be putting your money away for.

Investing your money is best for longer-term saving (five years or more). This is because over time any fluctuations in the stock market tend to level out, like when you zoom out on a graph.

Our Lifetime ISA and Stocks and Shares ISA invest in stocks and shares because we believe this gives your money the best chance of out-growing inflation. This is compared to cash ISAs, which grow your money with interest rates.

As with all investing, the value can go up and down and you could get back less than you’ve paid in.

5. Look for discounts

If you're still in education, flash your student card every time you spend money. You might be surprised how many shops and services will knock 10% off and those discounts add up!

Make use of discount codes and loyalty cards wherever you can - even the smallest saving can make a difference over time.

Don't lose hope if your budget doesn't always add up

Managing your money isn't always easy and there will be times when your budget gets away from you.

The trick is to calmly go back to the beginning and rework it until the numbers add up, even if that means putting off that hair cut for a month or bringing lunch to college this week.

Sticking with building those good financial habits could help you avoid debt and afford the things you really want. Keep going!

Invest in your future goals with OneFamily

Lifetime ISA

Our Lifetime ISA could help you buy your first home quicker. Get a 25% boost from the government on top of your savings, as well as any potential stocks and shares returns.

Stocks and Shares ISA

For other future goals, like starting a business, travelling the world or simply building your future fund, our Stocks and Shares ISA could be a good option.

Our Lifetime ISA and Stocks and Shares ISA invest in stocks and shares. This means they have good long-term growth potential, but the value of your investments could go down as well as up so you could end up with less money than you've put in.