To achieve your financial goals, you need to build good habits, such as budgeting, saving, and investing. Starting to develop good financial habits as a teenager will give you a considerable head start when you’re an adult. Hopefully, as a teenager myself, I can provide a unique perspective on financial habits and their importance!  

Why it’s important

Building good financial habits is necessary to achieve any major financial goals like paying for college, buying a car, buying a house, or retiring, and the earlier you start, the better. Learning to save, invest, and budget as a teenager will get you way ahead of the game and help prevent you from making major mistakes as an adult. Even though saving and investing might not be as fun as spending all your money, you’ll thank yourself for being financially disciplined when you look back on your teenage self in the future.

Making money 

To achieve your financial goals, you need to have a source of income. Whether by working a traditional job, starting a business, or freelancing, having a stream of income as a teenager is necessary so that you can save, invest, and growing your net worth. Here are some examples of ways to make money as a teenager:

1. Freelancing on sites like Fiverr can be a good way for teenagers with skills like writing, video and photo editing, and graphic design to sell their talents. What’s great about this approach is that it’s flexible and probably more fun than a regular job!

2. Selling things on eBay can also be a great source of income. Listing things like clothing, old or broken electronics, books is a much less wasteful alternative to throwing away your old stuff that can also make you a lot of money. I’ve made over $2500 on eBay in the past two years, primarily by selling books and electronics. Additionally, it’s fun and doesn’t take that much time!

3. Perhaps the most straightforward approach to making money as a teenager is getting a generic, minimum wage job at a place like a grocery store or fast-food restaurant. While this isn’t the most glamorous approach, it’s also simple and much more consistent than other making money methods. 

Spending and Budgeting

One of the most important financial skills is budgeting how much you spend and on what. Although teenagers usually don’t have to pay for stuff like housing, utilities, food, and transportation, it’s still important to track and limit how much you’re sending. 

Start by tracking and categorizing every purchase you make on a spreadsheet. After a few months, look at the categories where you spend the most money and create a budget to help you cut back on spending. Your budget should also include a portion of your money that you set aside to save/invest. 

Saving

Although it’s tempting to send all the money you make, it’s crucial to consistently save a portion of the money you earn. Having savings will allow you to make big purchases like a car or a house and will eventually allow you to retire. 

Decide on a percentage of your income to save every month and keep your savings in a separate place or account. Having separation between your saving and spending money separate will make it much easier to prevent yourself from spending your savings. 

Investing 

Investing is another crucial financial skill to learn because investing in stocks and other assets is one of the best ways to grow your wealth. 

There is a common misconception that investing is some boring thing old people do, which couldn’t be more wrong. The truth is that almost anyone can invest, even if you’re a teenager.

You can begin investing as a teenager by opening a custodial account on stickpile.com (or with another brokerage) with the help of your parents. A custodial account will allow you to make investments with the approval of your parent or guardian. 

Although investing may sound boring, it can be a fun and exciting way to make money. The thing about investing is that you can invest in things that you’re interested in and are knowledgeable about. Whether you’re interested in video games, cars, computers, makeup, or clothing, you can invest in those types of companies. Investing in companies that you are interested in makes it fun and engaging to research companies. Also, you will probably learn about new products and technologies that you have never heard of before when you start researching. That being said, diversification is important, and you shouldn’t only invest in one area.

Learning to invest as a teenager will also help you feel more comfortable during market crashes and pullbacks and will help prevent you from making big mistakes as an adult.

Financial literacy 

In general, it’s important to be financially literate and have a good grasp of how finance works. YouTube is a great resource for learning more about finance in a way thats interesting and entertaining. Personally, I enjoy watching finance YouTubers like Meet Kevin, Graham Stephan, and Andrei Jikh. You can also learn about investing, saving, and earning money from the many books and articles dedicated to the subject.

The takeaways

1. 1. Establishing good financial habits as a teenager to budget, save, and invest will give you a considerable head start when you’re an adult.
   2. To achieve any major financial goal, you have to be disciplined and have good financial habits.
   3. Being financially literate as a teenager will help prevent you from making stupid mistakes.
   4. Having a source of income is necessary to achieve your financial goals.
   5. Assess your skills, strengths, and weaknesses to decide how you’re going to make money.
   6. For teenagers with marketable skills like freelancing sites like Fiverr can be a good way to make money.  
   7. Instead of throwing away your old clothing, books, electronics, etc., sell them on eBay.
   8. Working a traditional entry-level job is more consistent and often more straightforward than other ways of making money.
   9. Track every purchase you make in a spreadsheet and categorize your purchases. Then make a budget by assessing which categories you could cut back spending in and adjust your spending accordingly.
   10. To make big purchases like buying a car or a house, you have to have significant savings. 
   11. If you start saving as a teenager, you will continue the habit into adulthood. 
   12. You can start investing as a teenager by opening a custodial account.
   13. Whether you’re interested in video games, cars, computers, makeup, or clothing, you can invest in those types of companies. 
   14. Starting to invest as a teenager will help you feel more comfortable and will help prevent you from making stupid mistakes as an adult.
   15. YouTube is a great resource for learning about finance in an interesting way.