You’re never too young to start saving money or, at the very least, learning how to save. If you want to save money fast as a teenager, here are seven tips to get you started.
Why do you want to save money? As a teen, you may be thinking about buying your first car, college expenses or maybe you just want a head start on an emergency fund.
If you don’t have a specific purchase in mind, consider setting an amount-related goal, such as “Save $100 every month” or “Save $2,000 in one year.” A clear goal can keep you motivated and serve as the starting point for a real, actionable plan.
With a goal in mind, you can start a budget. There are many ways to budget your money, but it starts with calculating how much income you bring in, how much you want to save and how much you need to allocate toward expenses.
Luckily, a teen’s budget should be much simpler than that of someone in their 30s or 40s. There’s a good chance you’re not worried about paying a mortgage, multiple car payments or credit card debt. But even without those “adult” expenses, it’s still important to craft a budget so you can meet your savings goals and track your spending.
Some popular budget methods include:
High-yield savings accounts (HYSAs) are one of the best places to store your savings. Not only will your money be tucked away and insured, but HYSAs also have very high interest rates. The account’s annual percentage yield (APY) determines how much your money will grow over a year. APYs are expressed as a percentage, so the higher the number, the more you’ll earn.
| Amount in HYSA | APY | Interest earned in one year | Interest earned in five years |
|---|---|---|---|
| $1,000 | 5% | $51.27 | $284.00 |
| $1,000 | 0.45%(national average rate) | $4.61 | $23.27 |
Important note: You must be at least 18 to open a bank account. If you’re a minor, you’ll need an adult’s help to get a checking or savings account. If you’re 18, you can open an account yourself in most states.
A savings account is a good place to store your money, but also consider a checking account or debit card so you can spend that money if needed.
Plenty of kid and teen checking accounts offer guidance on how to manage money, teach you financial topics, track your savings goals and more. The best teen checking accounts have extra features like chore and allowance tracking, educational games, investing platforms and even credit-building opportunities.
And just like with savings accounts, if you’re under 18, you’ll need an adult to help you open a checking account.
These are a few of the most popular teen banking options.
GoHenry
Greenlight
Step
Modern checking and savings accounts sometimes include savings tools that can help you reach your savings goals faster.
Some checking accounts have a feature called “savings round-ups,” such as the teen account Current. A round-up tool automatically rounds up each debit card purchase to the nearest dollar and deposits the rounded-up amount into your savings.
You can also set up automatic transfers. For example, you can set your account to automatically move a percentage of your paycheck to savings when your direct deposit from your job clears.
For parents: How to help your teen save
As a parent of a teen who wants to save money, one of the best things you can do to help is by opening a bank account with them. Minors can't open accounts on their own, but you can either add them to your account as a co-owner or open a new one with them. Learning how to use bank accounts is an essential step in financial literacy education. Some traditional banks and credit unions require you to go to a branch to open an account with a minor, but top online options like Greenlight and GoHenry let you open teen accounts completely online.
— Bethany Hickey, Editor, Banking.
It’s hard to save money, and it’s easy to spend money — especially with apps tempting you every time you check your phone. Places like TikTok, Instagram, Temu and Amazon make it really easy to drain your account with one-tap checkouts, time-sensitive deals that give you FOMO, personalized advertisements and push notifications.
Before you make a purchase, try to implement the 24-hour rule: Wait 24 hours before you actually go through with a purchase to make sure that you really want or need that item.
Investing sounds like something for old people, but teens can start investing with a parent’s help. Even though you’re likely 50 years away from retirement, learning to invest is an essential skill and could make you some extra cash.
Greenlight and GoHenry both have optional investing platforms, and with parental permission, you can start investing in stocks and exchange-traded funds (ETFs). If you’re already 18, you can open your own brokerage account. Even if you don’t “make it rich,” learning how to invest can diversify your savings. Just keep in mind that investing has its inherent risks, and there’s no guarantee that you’ll make money.
If you’re a teenager who’s still in high school, you’ve got the edge in saving. You probably don’t have to worry about paying rent, utilities, credit card debt or loans, making it easier to save your money because you’re not maintaining a household.
But that also means you’re likely new to budgeting, bank accounts and financial literacy in general. While you’re saving your money, be sure to keep educating yourself on topics like investing, HYSAs, bank accounts, budgeting and lending. Learn more about different types of bank accounts to see which one would best suit your goals.
How much you should spend on your first car largely depends on who you ask and where you live. In general, most experts (myself included) agree that a teen’s first car should be around $5,000. Anything less than that price point may be an unreliable purchase, but anything more than $10,000 can be hard for a teen to afford.
With the goal of a $5,000 car in mind, start saving as much as you can. Ask your parents or guardians what they can do to help you purchase or save for your first car.
We do have to acknowledge the difficulty of saving money without a job or reliable transportation. Parents, public transportation, ride-sharing apps or the help of coworkers may be your primary source of transportation to your job until you can save enough money to buy that first car.
There’s no legal age to buy or own a car — you don’t even need a driver’s license to buy a car (you’ll need a license to drive it, of course). However, you have to be an adult to get an auto loan. If you’re under 18, you can buy a car with cash, or a parent or guardian can take on an auto loan for you.
We won’t lie — saving money without a source of income is a conundrum. If you want to save money, you need money coming in. That said, a traditional job isn’t the only way to bring in cash.
As a teen, consider asking your parents for chores and allowances, picking up babysitting gigs, looking for summer or seasonal jobs, saving any Christmas or birthday money or selling your clothes or items you don’t need anymore.
Modak has no monthly fee, but it’s slim on features. Greenlight starts at $5.99 but is a value for big families.
Modak is a no-frills, free debit card for kids and teens that comes with a virtual or physical card and the ability to set up direct deposit.
Some of the best free debit cards for kids that don’t charge any monthly fees include Step, Current, Cash App, Axos, Chase, Revolut and more.
Greenlight and GoHenry are strong kids’ debit cards, but Greenlight has a slight edge because of its extra features and competitive price.
Kachinga is a kids’ prepaid card with chores and allowance features, but it comes at a cost.
Step banking accounts help kids and teens learn to manage their money while building their credit scores.
Teach your child financial responsibility with this reloadable debit card that comes equipped with parental controls.
Greenlight stands out as a top pick for all ages, as well as GoHenry, Step, Modak Makers, Current, BusyKid and more.
Our list of the best credit cards for teens includes Step, Greenlight, Capital One Quicksilver and more. See the full list here.