When you're a teenager, saving your money is probably the last thing you’re thinking of. Retirement is decades away, you don’t have any major expenses, no bills, and an emergency seems like an unlikely statistic. You’re not alone in thinking this, the majority of teenagers have no interest in saving their money. While saving money may not be a priority right now, here are a few reasons why you should put away at least a few bucks aside.
The first, and probably most relevant, reason to save money is just delaying spending it. Save your money for a big purchase. This could be anything from a new laptop, to a car, to even college. Purchases like these are so big, they’re generally difficult to make on short notice. By saving even a small portion of your money regularly, you’ll be able to accumulate a decent chunk of change and eventually have enough to purchase something nice. Start slowly, saving a few dollars here and there. Try setting a goal for yourself, “I’ll save $xxx per month”. Before you know it, you’ll have more than enough to make that big purchase that seemed impossible months ago.
Another reason to start saving money at an early age is to begin developing a key habit that’ll be essential later in life. By saving a small portion of money regularly, you’ll eventually become accustomed to a specific portion of your money being “gone” every month, and you’ll be used to spending a smaller amount of money than you actually had. So, when you get your first job, putting aside a percentage of your paycheck won't be as painful. In fact, you might even do it without thinking twice. Saving money in adulthood is very important, as you're on the hook for all of your expenses, while as a child, your parents will usually take care of anything that comes up. You’ll need to save for emergencies, like losing your job, save for bigger expenses like purchasing a home, and save for retirement. By saving early on, you’ll instill a habit in yourself that’ll likely stay forever.
Saving your money can also prevent you from making impulse purchases. If you save a large percentage of your money, every purchase you make will have to be thought out. You won’t be able to just go and purchase an item, instead, you’ll have to think, “Is it worth the trouble of withdrawing my money and buying this?”. This process allows you to thoroughly think about the decision you’re making, ensuring you won't regret making a purchase.
You can always start saving for retirement at a young age, but when saving for retirement, many other factors need to be considered. To explore the different options for saving for retirement, I’ll dedicate an entire article to the subject. While saving for retirement at a young age also helps build good habits, it more importantly utilizes the time value of money, meaning the earlier you start saving, the more money you’ll have later on. This topic can be confusing, so there will also be a separate article on it entirely.
It's important to remember that you’re at an age where you have the freedom to make “dumb” purchases and have fun with your money. Saving money and spending it are not mutually exclusive, so saving a small amount doesn't mean you can't spend the rest. You have no expenses, so you should make the most of what you have, and not think about saving too much. Save a few bucks here or there, just to start building a good habit, but don't become a scrooge and overthink every purchase (this isn't, however, an invitation to be financially irresponsible). Make memories, utilize what you have for great experiences, and enjoy your money!