Manage Money as a Teen: Managing Money Tips for Teenagers

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Money is a medium of exchange for goods and services. Society tends to place much emphasis on its acquisition. The result is that money tends to gives rise to many emotions ranging from greed and envy to depression. Learning how to manage money as a teen can prevent such woes and lead to a financially secure future. Like any other discipline, money management can be thought of as a series of good habits. Regular practice helps to reinforce these habits.

Assess Your Present Situation

As a teen you no doubt have many goals that require money for them to become a reality. The first step to achieving these goals is to assess your present situation. Perhaps you have just got your first job and wish to save money for a vacation, college education or car. Alternatively, you may have overspent and want to get out of debt. A good starting point for money management is to understand that there will always be a limited amount of mony to use.

Learn How to Maintain a Budget

A budget helps us to live within our means. In its simplest form, a budget consists of a record of income and expenses during a period. To track expenses better, categorize them under fixed, variable, incidental etc or in any other way that is useful. For instance, categorizing them as rent, food, transport, clothes, donations, entertainment and other may work better for you. The remaining balance is your savings to meet your goal.

Managing money as a teen requires responsible use of money in all its forms, cash, debit, check book and credit cards. Withdraw only the minimum necessary amount of cash so you are not tempted to spend on trivial things. Your debit card accesses your bank account. Once you use it to buy something, it is gone. If you write a check, make sure there is money in your account to cover the payment. Balance your check book each month. Reconcile the balance in your budget against that in your check book.

Manage Credit Cards Wisely

Your credit card is a different matter all together. With credit card companies targeting young adults with low fees and rewards, it is easy to get tempted. Leave your credit card at home if you feel tempted to over charge it. Responsible money management means that you can settle all your bills without letting financial companies profit from your weaknesses. Learn to use credit wisely. Pay up your full balance by the due date. If you run up a high balance by being impulsive, learn from your mistakes and move on. Debt management is an important part of being financially savvy.

Practice Financial Restraint

How to manage money as a teen requires learning self-control. When you want something desperately, ask yourself how important it is compared to that bigger goal you are saving for. You will be practicing self-control if you can give up this immediate reward for something bigger later on. The importance of this cannot be stressed enough. It can help you to stay on course, not giving in to impulsive buying.

Learning financial restraint is important. This means learning to distinguish between needs and wants. Basic amenities such as food, clothing and housing are needs. A designer shirt or an expensive gadget is a want. When you crave for items in the want category, it is best to check out prices and do some basic research over a few days. Not only will it help you to decide whether you actually need it, but it will point the way to a cheaper alternative.

A shopping list prepared beforehand can help to curb unnecessary spending and not give in to the latest fad or pressure from friends. If you cannot afford it, don’t buy it. Our great grandparents who lived without credit cards were good at this. We can be too, by practicing financial restraint.

We can also learn something else from our forebears. Living in difficult times, they made the most of what they had. Life was more about enjoying the companionship of family and friends and living in harmony with nature than accumulating stuff. It is said that the best things in life are free. We can take a step in this direction by not valuing everything around us in monetary terms.

Learn the Saving habit

However small your pay check may be, it is important that you save part of it. Decide how much you can save each month toward your identified goal. Whether it is one third or one tenth, stick to this amount each month. Arrange for an automatic withdrawal of funds from your checking account to a savings account timed with when you get your pay. That way, what is left over will be yours to spend. While a basic saving account is a good starting point, ask help from your parents or your bank if you wish to venture in to more sophisticated investments such as stocks, bonds or special funds.

Monitor Your Budget and Goals Periodically

As time passes and your situation changes, your may opt for different goals. You will balance your budget better, leading the way for more savings. This will help you to reach your goals faster or finally get out of the debt situation you are in. Monitor your budget periodically and use it as a tool for effective financial planning.


How to manage money as a teen requires some initial learning. It is best to think of them as skills or habits you acquire by practice. Learn the reality relating to your financial situation. Practice restraint and responsibility in how you use money. You will be rewarded with a good credit score that will come in handy when you negotiate your first mortgage or business loan. Most of all, being financially secure can contribute to a happy life.