Overspending is a huge problem that many people face, including teenagers. Spending too much money on non-essential purchases means you won’t be able to save as much money for important expenses like a car, college education, or house. Severe overspending can lead to finical instability or even consumer debt on credit cards at high interest rates.

Beginning to build good spending and saving habits as a teenager will help you save money, especially as an adult when you have to pay all of your own expenses, and sticking to a budget is absolutely crucial. Although it probably doesn’t sound that fun, establishing good habits now will make managing your money as an adult infinitely easier. 

Time is money

Time is money. This is a phrase we often hear in reference to the fact that time is a valuable resource that can be used to make money. If you think about the time it takes for you to make money and how much an item costs, you can look at each purchase you make in terms of how much of your time you’re trading for the product. 

“Money is something you trade your life energy for. You sell your time for money. It doesn’t matter that Ned over there sells his time for a hundred dollars, and you sell yours for twenty dollars an hour. Ned’s money is irrelevant to you. The only real asset you have is your time. The hours of your life.” ― Vicki Robin, Your Money or Your Life

You can apply this concept to your life by thinking about how much your time –– a truly finite resource –– is worth. Let’s say you make an hourly wage of $10. When you go to the store to buy a Starbucks Frappuccino for $5, you can think of the exchange as trading 30 minutes of your life for a Frappuccino. 

This is a great way to build a more tangible understanding of how much something really costs. 

You can read more about this idea in the book Your Money or Your Life!

Don’t waste money

Often, the easiest way to save money is by buying less stuff. Although it sounds obvious, reducing how much money you spend is by far the most effective way to reduce spending. 

Clothing 

Clothing makes up an average of 20% of teen spending, making it the thing that teenagers spend the most money on.

Oftentimes we just buy too much clothing. If you look in your closet, there will probably be tons of clothes tucked away in the furthest corner that you never wear. Before using your hard-earned money to buy new clothes, truthfully evaluate if it is something that you will actually wear.

Even if it’s something you’ll wear, that doesn’t necessarily mean you should buy it. If you already have enough clothes, don’t just buy an item for the sake of buying it. Instead, consider waiting for when you actually need new clothes. 

Doing these two things should dramatically reduce the amount of money you spend on clothing.

Shoes 

According to a recent study, shoes made up an average of 10% of teen spending. This is often a cost that can be dramatically cut by buying shoes that are versatile and you can wear them frequently.

It just doesn’t make sense to buy shoes that you’ll likely grow out of after just a year or two. This is the same reason that buying expensive or designer shoes isn’t a good idea. It’s ultimately a big waste of money.

Eating out 

Food is made up an average of 20% of teen spending, making it tied with clothing as the category that teenagers spend the most money on. Although eating out is often a lot easier and tastier, spending the extra money might not be worth it. 

Occasionally eating out or buying snacks with friends, or rewarding yourself for achievement, or something like that is fine. But frequently dining out is a big expense that adds up quickly.

Instead, start learning how to cook and prepare snacks so that you can use the groceries you already have in your house to make meals. This will significantly reduce your monthly spending, considering that food is one of the two biggest things the average teenager spends money on. 

Coffee

A lot of teenagers consistently drink coffee every day. Making from home is much cheaper, faster, and more customizable than buying it from a coffee shop. And if you go to buy coffee, you’ll probably end up with something else like a pastry, making the trip even more costly. This is why making drinks like coffee or tea at home can be so advantageous.

Instead of having to drive all the way to the cafe, pay exurbanite prices, and buy things you don’t need, you can choose to make coffee or other beverages at home. 

Not only is this the better financial decision, but making drinks at home allows you to customize your drink and will also save you from having to wait in a long line.

Make a budget 

Making and adhering to a budget is another valuable method to reduce your spending. 

To build an effective budget, start by analyzing your spending for 1-3 months. This should give you a good idea of how much you spend and on what. Start by creating a spreadsheet to track every purchase you make. Input the date, amount, and category of spending (e.g., food, clothes, entertainment). This will allow you to analyze your habits and create charts to visualize your spending. 

After taking some time to review your spending after you tracked it for a few months, create a budget that specifies what percent of your income you’ll save and what percent you’ll spend in each category. Aim for savings/investments to make up at least 10% of your spending, but ideally should be much higher. 

Consider which categories you’re spending too much in and try to set a budget to cut back. After you analyze your spending and create a budget, revisit it every month to make adjustments and slowly reduce your spending and increase your savings.

Implementing a budget to help you spend less money than you otherwise would help to minimize wasteful spending and increase your savings rate.

Look for coupons 

Looking for coupons is a fast and easy way to reduce the amount of money you spend online.

Browser extensions like Honey allow you to search for valid coupons for your purchase at the click of a button. But these extensions rely on other users using coupons, so there are still plenty of coupons out there that these extensions won’t tell you about. Simply typing “[insert company name] coupons” into Google can be an effective way of finding coupons. There are many sites that have coupons you can use, so just try a few and see if they work. 

Sometimes you won’t be able to find any valid coupons, but it’s so easy to look up and can end up saving you a significant amount of money.

Avoid impulse purchases

The Economic Times defines impulse buying as “the tendency of a customer to buy goods and services without planning in advance. When a customer takes such buying decisions at the spur of the moment, it is usually triggered by emotions and feelings.” 

Companies often try to tap into this by placing items like candy near the register to trick consumers into making a purchase they don’t really want to make.

But even though these little purchases are relatively harmless, impulse purchases are often bigger than just candy and can cost you hundreds if not thousands of your hard-earned dollars. To ensure you don’t make impulse purchases, wait at least 24 hours after you find something you want to buy. 

This will help reduce the emotional component of the decision and give you time to think about it rationally. This should really help reduce the number of times you purchase something, only to end up using it once or twice. 

Pay for the product, not the brand

Too often, people obsess over a specific brand, opting to buy their more expensive product just because of the brand name. Think about it. There’s nothing that special about a Supreme shirt or Lulu Lemon leggings. You’re really just paying an exurbanite amount of money for a product that is roughly equivalent to a much cheaper, no-name produce. 

Instead of focusing on the brand, read reviews of other, cheaper products. It’s important that the things you buy are high quality so that they last for a long time and you use them frequently and get your money worth. But that doesn’t necessarily mean splurging. Oftentimes, you’ll find that there are products with better ratings for less money if you just take a few minutes to research.

Learning to buy products for their quality instead of their brand is a crucial skill that will save you so much money over your lifetime.