Being or having a teenager isn’t cheap these days. From clothes to computers and cell phones, a lot of typical teen purchases can burn through a budget like wildfire. Saving for teens can be an important first step in helping them build good budgeting and spending habits, and encouraging them to begin investing early. And starting young when it comes to saving for retirement can make all the difference in the world.
Saving on Clothes. Teach kids early to shop off-season and they will reap the financial rewards their entire lives. If you give teens a fixed budget for clothes, they’ll quickly learn how to stretch that budget by seeking out store sales, using online comparison shopping engines and getting creative by altering and repurposing last year’s clothes. You can even encourage them to organize a clothing swap with friends — an idea that’s both fun and frugal.
Saving on Movies. What teen doesn’t love a night out at the movies with friends? Consider purchasing discount tickets through one of the local coupon books for your city. Additionally, college-enrolled teens can often get extra savings by showing their student ID at the box office. Catching earlier showings can also score reduced ticket prices, which can help a lot if your teen enjoys those pricier 3D and IMAX showings.
Saving on Music. Individual downloads on songs can add up fast, but there are a host of Internet radio services that can be free or nearly free of charge and offer up a wide selection of the most popular artists. If your teen’s iTunes bills are really racking up, perhaps a service like Pandora or Spotify would be a good cost-saving alternative.
Saving on Cell Phones. Adding your teen’s phone service to a family plan is likely to save on monthly charges (but be sure to monitor data usage carefully if you are not on an unlimited plan). When it comes to the phone itself, you can often score a great deal on a model that is one year old or more. This may be a particularly good idea for your teen’s first phone, or if you think he or she may be inclined to lose the device.
Teaching Teens to Save Giving teens an allowance or letting them spend a certain portion of their earnings on things they enjoy can help them learn how to get the most for their money. And teaching them about how investing works and the importance of starting young may be one of the most important lessons they ever learn.
In an article called How Teens Can Become Millionaires, personal finance guru Dave Ramsey illustrates how the investment returns of a 19-year-old who only invests until age 26 can significantly outpace someone who invests the same amount every year from age 27 through 65. Try not to cry after you read that one, Mom and Dad. It drives home how important it is to seek out savings for teens, so they can maximize their investment potential during those critical early years.