coverSUBSCRIBE
Close

LIFE

Get Inspired

5 tips about money that every teen should know

You prob hear your parents talking about money *all* the time. They might even talk about it more frequently than they talk about how phones are the reason for all of your life's problems... and that says a lot! So, why does money matter, anyway? And what do you need to know about it? Here are 5 money tips to help you understand just that. Trust me, your future self will thank me later! 

1. Time is your greatest superpower

You might not be able to travel in time, but that doesn't mean that time is not still your greatest superpower. Just hear me out. 

Imagine it just snowed and you're standing on top of a huuuge hill. You're having a snowball fight with your BFFs and let's be honest—the snowballs that you're making are looking pretty lame! So you decide to push your snowball down the hill. As the snowball gets bigger and bigger with time, the snowball can pick up more and more snow. By the time the snowball reaches the bottom of the hill, you can win the snowball fight with ease! This is because the snowball is compounding. 

What does this have to do with money? First thing's first: the more time, the better. If you make a small investment at a young age, you'll earn interest on your money... and that interest will earn more interest... and then that interest will earn even more interest! This phenomenon is called compound interest, and it's the reason why investing early is key. 

If you thought that time wasn't your greatest superpower, think again—time is a moneymaker, and this "snowball effect" is the reason why!

2. Wants vs. needs

Every time I walk into a store, I find that there is at least one thing that I am *dying* to buy, whether it be a trendy accessory or a cute summer dress! I bet you've experienced something similar. Here's some advice that will help you (and your wallet) in this situation. 

Each time you find something that you want to buy in a store, ask yourself the following questions: 'Do I need this? Or do I just want it? Is this something that I will use for a long time? Or will I only use it for a short while? What other item might I be able to buy with this amount of money instead? Would I prefer this other item?' 

Set a monthly budget for yourself and ask yourself if you are willing to spend your money for the month on that particular "want." While it is okay to occasionally indulge in trendy items that you want and don't need, you should set a limit to this kind of spending. Otherwise, you won't be able to save, which brings me to my next point. 

3. Save, save, save

Save, save, save! I think that's the name of Taylor Swift's song on Red... right? Because "I think that it's best if we both save"! Save, save, save-ing is *super* important—here's how you do it. 

First, separate your spending money and your savings money. Though it may be tempting to spend your savings money, your future self will be "mad, mad, mad" if you do it. 

Next, keep track of what you're spending. *Always* look at the price before you buy something! You can also keep your receipts and write down all of your purchases in a book. You can then cut down on other costs if you find that you're spending too much money. 

Finally, save *before* you spend! That way, you will always be one step ahead and you won't risk ending up in a super stressful money situation. 

Pro tip: if you're earning money, make sure that you spend less than you earn. Then, save the difference between the two!

4. Student status is the best status

On the topic of saving, let's talk about student discounts! If time is your greatest superpower, then your student ID is your magic wand because student discounts are real-life magic. In fact, I would argue that "The Most Magical Place on Earth" is not just limited to Disney World—it's any place that offers a student discount!

The list is endless: clothing stores, movie theaters, concerts, restaurants, museums, hotels, groceries, streaming platforms, transit, electronics, sporting events and so much more. Moral of the story: *always* carry your student ID because you never know when you'll find a taste of magic. 

5. Educate yourself

School isn't very helpful when it comes to personal finance—most school curriculums don't even cover basic financial concepts. As a result, students often have to educate themselves on their own time. Lucky for you, you have made it this far into the article so you're already on the right track! 

This one might be kind of uncomfortable, but talk about money with your family! Don't be afraid to ask your parents anything you have questions about. At the same time, know that money is a tricky subject so your parents might not be quite ready to have family conversations about it.  

My *fave* podcast is Popcorn FinanceI recommend the episode "Saying No to the Engagement Ring"!! I *promise* it's not boring. You can also hit the books (or magazines or information online) to read more about topics that particularly interest you. Of course, money is a super complex topic so you might still want to do more research after clicking out of this article! 

Which money tip is your fave? Let us know on Instagram and Twitter @girlslifemag!

All GIFs via Giphy

POSTED IN , ,

by Tori Feinstein | 8/23/2021
share