There are many reasons to save money as a teenager. The biggest reason is that setting the saving mindset early on in life pays dividends later down the road. Once you start your life on a good path, you can’t help but remain on the good path later down the road.
I remember when I was a teenager. My very first job working as a Cashier at the now bankrupt Sears. I was getting paid federal minimum wage of $7.25 per hour and would have to ask if the customer wanted to get a credit card in exchange for 15% off their purchase.
It was not the easiest job but I loved every second of it because I was now finally earning some money! Money, to me, was freedom and independence! I would apply to many jobs like McDonalds and the like and would get zero traction when I applied as a Junior in high school.
But now that I’m a senior in High School, they were giving me some respect and finally gave me a job to earn some money! While earning and generating revenue is great, the next part that’s important is keeping the money. Growing up in a frugal household, I loved saving money.
Therefore, I would spend a lot of my energy saving as much money as I possibly could. I understood the reasons to save money as a teenager because it was my future that I needed to protect. Besides, I was going off to college soon. I needed to save money in order to have that financial stability!
9 Reasons to Save Money as a Teenager
Here are the 9 reasons to save money as a teenager. Please take it to heart because saving matters more than you know.
1) It Sets the Foundation Up Early
When you are already in a savers’ mindset, it sets up your foundation from which you build your house from. Saving money as a teenager is great because that’s where the foundation starts. As a 28 year old, I am a very frugal person. However, I didn’t get there by accident.
My parents were frugal as you can possibly can be. My mom would question even $10+ purchases and ask us, “do you have any idea how much money that is?”. I was shocked. That’s when I learned that frugality is the way to freedom. It’s how we protect ourselves from financial ruin.
I learned that from when I was in elementary school. That was some of the most helpful lessons my parents taught me. How to save a dollar in order to be financially stable. When you get used to saving money as a teenager, you take the lessons with you. You don’t forget it as the years pass.
Then when you earn the real money down the road, that’s when it works in your favor. That’s one of the best reasons to save money as a teenager.
2) A Reason to Save Money as a Teenager is It Helps Buy a Car
I got my driver’s license way later than my friends. I got it at the age of 21, the year I graduated college. One of the reasons to save money as a teenager is that it helps to buy a car. When I graduated college, I bought a used 2016 Nissan Versa Note for $10,300, cash. No financing or any of that.
I couldn’t have afforded that car if I didn’t save money throughout my life, starting from when I was a teenager. My paychecks from my summer job at Sears really helped me out. Because I was living under Mom and Dad’s roof, I saved and banked nearly every penny. It was amazing.
Therefore, by the time I graduated college, I racked up $40,000, cash. No debt or anything of that kind. Not having a car is a huge disadvantage. If you’re living in the United States, you need a car. You can’t go through life without it because it’s hard to even get groceries without a car.
Therefore, if it’s a necessary expense, then there’s no harm in saving money as a teenager in order to buy a car.
It’s an expense well worth the cost.
3) It Helps the College Life be Much Better
Many of my friends in college were poor. They couldn’t come up with money in order to pay for simple things like even a good dinner. While it is understandable, because college students don’t earn money, it would make it mountain times easier if you had savings in the first place.
Reasons to save money as a teenager is that it helps your college life. I didn’t have any objections when there was a good event I could attend for $300. I had thousands of dollars saved up from my Cashier job at Sears. Even then, I worked every single summer and I worked during college semesters as well.
It really doesn’t feel good to not have money. When you don’t have any money, you don’t have options or the freedom to pursue your interests. You are left with no choices. When you save money as a teenager and save almost every penny you have from earning money, then doors open up.
There are many fond memories I have from college. And I’m glad I experienced all of them while I was there because I could afford them.
4) Starting the Compounding Process as a Teenager Is Amazing
Compound interest works best once you start early. $5,000 invested at 18 turns into $108,000 by the age of 58 using an 8% interest rate. $5,000 invested at 28 turns into $50,300 by the age of 58 using an 8% interest rate. 10 years of difference turns into a $57,700 difference.
That’s not an insignificant amount of money. Reasons to save money as a teenager include being on the right side of the compound interest calculation. I can’t imagine what would have happened to me if I had known about the magic of compound interest when I was young.
I started investing at the age of 21. Imagine if I started investing at the age of 16, which was when I had ~$5,000 to invest. I could get back all of that time wasted researching and looking for the best stock opportunities. And even much better if I was maxing out the Roth IRA.
Compound interest makes a difference the earlier you start.
5) It Helps You Reach Independence Faster
One thing I was tired of hearing when I was a teenager was, “as long as you live under my roof, you will live under my rules.” I did not like hearing that. I wanted to be free, to live life on my terms when I want it and do what I want to do.
However, that wasn’t possible because I was financially dependent on my parents.
Reasons to save money as a teenager is that it helps you reach independence faster. Independence may be expensive and difficult to get there, but it’s worth every penny that you pay for it. My parents can’t tell me what to do about where I live and how I live my life.
I earn every penny that I make and I wouldn’t trade it for anything in the world. There’s a reason why people were willing to fight wars and even willing to work 40+ hours of their life in order to earn a paycheck. Because independence is worth it, more than you know.
Money is the first step to reaching independence.
6) You Can be Ahead of Your Friends
While my friends were partying in college and worrying about where to go out next, I was worried about how to earn money and working. Many people made fun of me for my frugal ways, but I did not care. I knew that was the way to get ahead.
You can’t get ahead if you don’t have money and you can’t have money if you don’t save what you earn. Reasons to save money as a teenager include coming out ahead of your friends. One day, they’ll ask you how you got to be so rich and that moment will be worth all the sacrifice you made.
By then, it will be too late for them to even start and to begin to catch up to you, which is completely OK. It really doesn’t feel great to not have money. I’ve been there as a poor and broke college student. Having that safety net and cushion matters.
You can get there all because you started saving money at an early age.
7) It Teaches You About Responsibilities
Parents don’t pay the bills forever. I didn’t realize how good I had it with my life until I got off the payroll of Mom and Dad. Reasons to save money as a teenager include learning about financial responsibilities. It really makes a huge difference when you learn the lesson early.
You don’t want to be the person at 30 who lives with your parents. If it’s because you’re creating a business and you need to save that money, that’s one thing, but it’s another if it’s because you can’t afford to rent a place on your own. Life is getting harder for younger people.
However, that doesn’t mean that you can’t navigate through the hard life on your own. Everyone has the capabilities, potential, and the willpower to do so. It is solely within you to get there. Everyone has responsibilities, including you.
It’s much better than the alternative of not having responsibilities. Reasons to save money as a teenager include becoming your own person.
8) It Teaches You About How Hard it is to Earn a Dollar
It is very difficult to earn a dollar. People don’t give out their hard earned dollars for free. People make you earn it. Believe me when I say money comes with a lot of strings involved. There’s a reason why the majority of workers are not engaged at their jobs.
It’s because companies don’t make it easy for employees to earn a living. Companies will literally reject your request for an extra $20,000 added to your salary even if they make an extra $200,000 from you as a result of your employment with them.
Reasons to save money as a teenager include teaching you how hard it is to earn a dollar. Companies will not make it easy for you to earn more money. You will have to do a lot of things in order to earn that dollar, things that you don’t want to do and even at the sacrifice of your family time.
There’s a reason why independence is so valued and treasured by many.
9) You Won’t have $0 Expenses for Long
There’s only a limited number of time before your parents stop paying for your meal, rent, utilities, insurance, and the like. That’s when you truly appreciate just how much your parents sacrificed in order to give you a life they think you deserve.
My parents did their best for me. We didn’t always see eye to eye but now I understand just how much they did for me. They are the best parents I could ever possibly have and I wouldn’t trade them for anything in the world for any amount of money at all whatsoever.
One of the reasons to save money as a teenager is because there’s a limited amount of time before you start to pay for your own things. Not having $0 expenses is great because you get to keep 75%+ of your revenues after taxes. However, it doesn’t always work like that forever.
You will have expenses you have to pay for down the road.
The 9 Reasons to Save Money as a Teenager are Important
When you want to learn about money, it’s a good idea to learn about money from people who have money. Take it from me or my friends Accidentally Retired and Liquid from Freedom35 who’ve gotten there. They have done phenomenally well for themselves and for good reason.
They know and understand the importance and the reasons for saving money as a teenager. If you get used to the money habits of saving early on as a teenager, the whole world opens up to you. In this consumeristic society, many people think having that shiny toy is what makes them winners.
That couldn’t be further from the truth. It’s the one who knows how to save and invest their money as much as they can. That’s the one who wins. Underneath that brand new Tesla they bought is a mountain of debt they have to work for 5 years to pay off.
My parents taught me and gave me reasons to save money as a teenager. And I am beyond grateful that they’ve done so for me. I owe them my life for everything they’ve done for me and everything they taught me. It’s something I will be eternally grateful for.
Take it from me who’ve been through it and learned just how important money plays in our lives. I know the ways to be financially prudent in order to financially protect yourself and come out ahead by the end of it all. Money will be a very important topic in your life.
It’s not a bad idea to learn more about it.
9 Reasons to Save Money as a Teenager Shortlist:
- It sets the foundation up early
- A reason to save money as a teenager is it helps buy a car
- It helps the college life be better
- Starting the compounding process as a teenager is amazing
- It helps you reach financial independence faster
- You can be ahead of your friends
- It teaches you about responsibilities
- It teaches you about how hard it is to earn a dollar
- You won’t have $0 expenses for long
