Financial Planning Tips for Teens: Books, Budgets, and More Resources
Adolescence is easily one of the hardest phases in life. People naturally assume that teenagers can’t handle their own finances. That assumption is all the more reason why you should be responsible and accountable as a teenager, especially when it comes to your finances.
You’re not too young to start putting your money affairs in order. As a teen, you don’t need to be planning your retirement, but you should start learning about financial management. It’s time to understand why you shouldn’t max out your credit cards. It’s time to know the best financial planning tips, books, and resources for teens, with the help of this article.
Top 5 Financial Planning Tips for Teens
Are you a teenager who’s always had a problem meeting your savings goals? What do you see when you think about your financial future? To ensure a financially stable future, you need to understand personal finance and mind your money habits. To help you understand the personal finance basics, we’ve compiled the best money tips for teenagers.
1. Get a money journal
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The best way to ensure you stick to any decision, including a financial decision, is to write it down. A journal helps you keep track of your plans. It’s a safe space to explore your short-term and long-term savings goals and track your current money decisions. To make journaling feel less like a chore, make your money journal entries as colorful and idealistic as you wish.
2. Make the smart decision to learn about financial planning
If you’re a teen, you’re reading this because you’ve decided you want to get better with your finances. You can’t become financially secure without understanding financial planning concepts. Financial concepts like budgeting, loan repayment, investments, emergency funds, credit card debt, and life insurance are topics you should immediately begin learning about.
3. Living by a budget doesn’t make you uncool
You don’t have to live on a strict budget as a teenager, but you should recognize the importance of each purchase you make. If you want to achieve all your life goals, you should learn how to make and live by a budget. You can use your money journal to create a budget for yourself, allocating certain amounts of money to common purchases you make each week, like food or entertainment.
4. To curb your spending habits, implement control measures
If you keep up with a bad spending habit, it won’t magically disappear in adulthood. Instead, your bad habit will become harder to break. Remember this whenever you’re tempted to spend recklessly. Implementing self-control with money at an early age will set you up for success.
5. Wealth building starts with consistent saving
Map out part of your allowance, or the wages you earn from working a part-time job, to go toward your savings. You don’t have to keep these savings in your bank account if you don’t want to. Building wealth starts by consistently saving a portion of what you earn. In due time, your money will be ready for investment.
5 Financial Mistakes to Avoid for Teens
Failure is an active part of the financial education process. However, to avoid making common mistakes, you need to be aware of the financial mistakes you’re most likely to make as a teenager, and then understand how to curb them.
1. Not checking your credit history
There are several reasons why you should regularly check your credit history. Firstly, it’s a way to identify and resolve inaccuracies within your bank balances. Next, it’s a way to assess and control your money habits, plus, you can use your credit history to determine and maintain a healthy financial position.
Reviewing your credit history is an integral part of planning for your future since it helps you take control of your future goals. Take some time today to check your credit history. You can use free online credit checking sites or apps, like Credit Karma or Clearscore, to quickly see your credit history.
2. Thinking you don’t have to keep up with financial news
Keeping up with financial news updates as a teenager has many benefits. Having a basic understanding of the economy is a way to help yourself and others plan for the future. Keeping up with financial news can help you stay informed about the inflation rate, the stock market performance, and how these factors affect the economy.
Through staying updated on the news, you will know how each economic policy implemented by Joe Biden affects you. You don’t need to obsessively watch the news, but reading weekly stock market updates and financial articles will go a long way toward making you financially knowledgeable and responsible.
3. Thinking you don’t have to worry about college tuition until you get there
43 percent of first-time college students had to rely on student loans to cover their college tuition in 2018 and 2019, according to the National Center For Education Statistics (NCES). To avoid being shocked by debt, start learning about finance now to invest financially in your future. Learn about finance basics for teens, start saving and investing, and define your future.
4. Not caring about part-time jobs
A part-time job can help you gain valuable skills and a strong work ethic that you can apply to any career you choose to pursue in the future. Even if you don’t need the money, working a part-time job as a teenager is a great way to start saving.
To make this less stressful, you could only work during the summer holidays or keep your work hours very restricted. You could also turn your hobby into a side hustle and earn money. Regardless, the idea is to train yourself to get used to a structure that’s not entirely defined by you but that you can somehow find a way to adapt or influence positively.
5. Not reading personal finance books or articles
There are good personal finance books for teens out there and while you’ll be finding out some great recommendations later in this article, it’s important to build a consistent reading habit. You could even form a book club or find a reading partner to help you with this goal.
Ask a friend to join you in your financial education journey. Each month, you can both decide to read a personal finance book for teens and talk about it. Exchange ideas from the book and see how you could implement a strategy from the book into your lives.
How to Make a Budget as a Teen
To make a monthly financial planner as a teenager, you have to consider how consistent your income is. If it constantly fluctuates, then you have to calculate the average income you receive in a month and work with that. If you can’t immediately ascertain what that figure is, then monitor your income for the next few months and calculate the average.
Teens Sample Budget
| Expense or Income | Amount |
|---|---|
| Total Monthly Income | + $300 |
| Self Care | – $20 |
| Credit Card Payment | – $30 |
| Food | – $30 |
| Entertainment | – $20 |
| Transportation | – $50 |
| Total Remaining | $150 |
Financial Planning Resources for Teens
Below are the best financial resources you can use to educate yourself as a teenager. Most of them are affordable, so you don’t have to worry about blowing your budget on finance learning material.
Financial Classes for Teens
- Coursera’s Financial Planning for Young Adults. In collaboration with the University of Illinois, Coursera offers a four-week introduction to financial planning for teenagers and young adults.
- Udemy’s Personal Finance for Big Thinking Teens. Udemy’s finance class is for students who want to improve their financial situation.
- Udemy’s Financial Education for Teenagers. If you’re ready to understand basic money concepts and how to manage your credit card as a teen, this is the class for you.
- Udemy’s Money Management 101: Beginner’s Guide to Financial Freedom. This Udemy course covers major topics like financial planning, budgeting, and asset allocation for beginners.
- Beyond Personal Finance Class for Teens. This is an ideal class for teenagers who are yet to be introduced into the world of budgeting and personal finance.
Financial Planning Books for Teens
- How to Turn $100 Into $1,000,000: Earn! Save! Invest! James McKenna tells his readers it’s never too early to become a millionaire and gives them the map to success.
- A Teenager’s Guide to Investing in the Stock Market: Invest Now, Play Hard Later. Luke Villermin shares impressive ideas through this book on how teenagers can start investing in the stock market with their limited funds.
- I Want More Pizza: Real World Money Skills for High School, College and Beyond. This book by Steve Burkholder is an insightful book about financial literacy for teens.
- Rich Dad, Poor Dad for Teens: The Secrets About Money That You Don’t Learn in School. Robert Kiyosaki pours his wealth of financial knowledge into his Rich Dad, Poor Dad for Teens book. In his opinion, you’re never too young to learn money lessons.
- The Infographic Guide to Personal Finance: A Visual Reference for Everything You Need to Know. Michele Cagan offers a step-by-step guide on how to organize your finances for short-term and long-term purposes.
Financial Planning Software for Teens
- Wally. Wally is a free personal finance app for managing your finances. It makes it easy to set savings goals and pay off debt through flexible budgets.
- Acorns Early. Acorns offer an investment app for kids and teenagers who wish to get an early start in investment and retirement savings.
- Greenlight. This app and debit card is for parents and kids who are serious about their children’s financial health. Kids learn here to earn, save, and invest their money.
- Mint. Mint makes it easy to get started with your finances. This popular app comes with insights and features that make both tracking your spending habits and saving money easier.
- Step. Step is a Federal Deposit Insurance Corporation-insured bank app and debit card for teenagers. There are no monthly charges and you can meet your savings goals right from the app.
Meet Your Teen Financial Goals in 2022
It’s time to get financially educated. 2022 can be the year you build the financial character you need to succeed in life. Then, when you get into your twenties, you’ll already have all your money affairs in order. Despite this lofty goal, you don’t have to tackle it all at once. Take as much time as you need to understand your financial goals before implementing a strategy.
Financial Planning for Teens FAQ
As a parent or guardian, you can teach your teenager about finance by giving them access to good financial resources that can help them build their knowledge. Help them learn about finance by enrolling them in finance classes for teens. Ensure that their bank accounts are regulated and that they learn the importance of earning and budgeting at an early age.
How much you should save as a teenager depends on your views about money, your wants and needs, and what you can afford to save. Many people follow the 50-30-20 rule, where 50 percent of income is spent on things they need, 30 percent of income is spent on things they want, and 20 percent is put into savings. The most important thing to note here is how well a teenager manages their money, not necessarily how much they earn.
There’s no fixed amount of money that you should have saved by age 20. It’s your personal finance and depends on your circumstances and future plans. You should save whatever you think is good enough to cover your future goals while being mindful of your limits. You don’t have to measure your savings by anyone else’s standard. Just ensure you’re meeting your financial goals.
To budget your money as a teen, you could use a money journal, a financial planning chart, or an app like Wally or Mint. You can first learn to split your income in half. Use one half to cover all your expenses. If this doesn’t adequately cover your needs, split the other half and repeat the process until you’re left with the amount you can realistically save.
