Top 5 money management tips for teens

Money management is boring. That never changes. But spending smart means having more to spend on the things that are really important to you.

Fewer coffees equals more driving lessons. One less festival means more travelling money.

Get into the habit now, when it’s relatively easy, and you won’t struggle with it later in life - which many people do. And you’ll have more money for the big things; like buying your own house or getting married.

With all that in mind, here are our top 5 money management tips for teens.

1. Have a plan

You’re more likely to fritter your money away if you don’t have a plan for it. And that just means you’ll have to work harder and longer when you do have to something to save for.

Ask yourself what the big things are that you want. Divide them into short-term, medium-term and long-term goals.

Do you want to go travelling before uni? Learn to drive? Get on the housing ladder as soon as possible?

Figure out how much you need for each and work backwards from there.

2. Have a realistic budget

Now you’ve got your goals, you need a budget.

A budget is basically setting your income against outgoings – which includes your savings goals.

The idea is to make sure you’ve got enough to cover immediate costs like food and rent (if you’re already living away from home), putting aside enough for your goals, and leaving yourself enough to live a good life in the meantime. (Yes, you’re allowed to have fun!)

It’s important to be realistic. If you make £400 a month from your part-time job, it would be great to save £300 a month towards a house deposit but you probably won’t stick to it.

3. Track your spending

Keeping to a budget is harder than it sounds, for anyone.

The old advice was to only use cash, so you could limit your spending. But in these days of contactless cards and mobile payments, it’s pretty unrealistic.

Instead, get yourself a finance app. Depending on the app, they’ll not only track everything you spend your money on but give you AI assisted advice and easy to understand data visuals so you can see what you’re overspending on.

Spending £2 here and there on chips is easy, seeing it add up over a month might be enough to shock you into changing your habits.

4. Start saving now

The earlier you start saving, the less you have to save.

Firstly, because if you get into the habit of thinking the money you have is [your income] minus [outgoings] minus [savings] now, you’re more likely to stick to it in the future.

Secondly, because money grows over time – if you’re smart with it.

Make sure you’re at least putting your savings into an account that pays interest. If your goals are more long-term, you might want to look at savings bonds and even investment.

The younger you start, the longer compound interest has to work its magic, and the less you have to put aside. That means more freedom when you’re older.

5. Use your student discount

The other big advantage of being young is your student discount.

Retailers, restaurants and rail operators fall over themselves to give you money off their products and services. Take full advantage.

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