Who doesn’t love money? Whether it’s to fund their hobbies or buy into the latest clothing trend, money plays a huge role in the lives of teenagers. Although, managing your finances as a youth can seem overwhelming. Some kids just don’t know where to start. Others are not familiar with the benefits of educating themselves early about banking.
With so many financial options and responsibilities around, it’s easy to get lost. This 2025 guide is here to help you navigate money management, with the latest scoop on tips and strategies to organize your finances as a teenager. Your future self will thank you!
Budgeting Is Your New Best Friend
Budgeting is a great skill to build while you’re young, you don’t have to worry about hidden expenses and taxes. Whenever you receive a sum of money, split it up and dedicate a few portions to specific expenses. Ensure you dedicate a specific portion of the money (e.g. around 60%) to save for the future. I’ll speak more on the importance of savings later on in this post!
Planning ahead for your expenses like this will allow you to save money more effectively in the long run, and this habit will make it easier for you to stick to your budget as an adult.
The most important part of budgeting is sticking to your budget! Give yourself a set amount of money to spend on something specific, and ensure you don’t go over that amount. Holding yourself accountable this way will allow you to use your money smarter, and pay attention to your spending habits. Also, budgeting will ensure you don’t accidentally overspend, and you won’t end up with fewer dollars in your bank account than desired.
A Credit Score? What’s That?
A credit score is a three-digit number that represents your financial habits. This number will determine your ability to get permission from the bank to take out things like loans and mortgages.
It is calculated based on factors like:
- How you pay off your credit card bills/loans (which is why you should ensure you pay off your credit card bills ASAP! Not paying off even a small amount can be detrimental to your credit score)
- The length of your credit history (AKA how old your bank account is, which is why it’s a good idea to get a credit card as soon as you can)
- Any other data involving your payment history (including missed payments and debt)
If your credit score is too low, the probability that your purchases will be approved is low. Having a high credit score can get you financial benefits, like paying lower interest rates on your account.
If this sounds like a whole lot of yap to you, that’s totally understandable. You don’t have to worry about credit scores or other financial jargon just yet, but it’s good information to know.
Although you can’t build credit without a credit card (which you have to be a legal adult to own), educating yourself on the importance of building credit is vital. Ensure you understand the difference between a credit v.s. a debit card, and explore different ways to build a credit score. You can also look into saving up for a credit card, which would allow you to get one as soon as you turn 18 and begin building your credit as soon as possible.
Build Your Savings
At the ripe old age of 14, what most teens want to do is spend their freshly-acquired bills on their favourite things. Being able to spend your own money for the first time is an incredibly freeing experience, but it’s important to remember that saving money is equally as essential. As a teenager, saving for your future goals and emergency funds is where most of your cash should be going.
An example of a future goal that some teens save towards is university. Post-secondary education is unfortunately very expensive, and it’s always an added benefit to begin saving as soon as possible. Future goals can also be things like a big trip with your friends, or an expensive item that you would benefit from purchasing. Having an emergency fund available to use in unexpected situations is a good idea, since you never know when you may need it.
You may be wondering, “Where can I put all the money I save?”
If you are saving cash, having a separate wallet (one you don’t carry around with you) to keep in a secure location is ideal. Some families use safes for added security. If you don’t want the hassle of dealing with physical money, getting your parents to help you set up a savings account (if they haven’t already) is a great alternative. This way, your money will be secure for when you need it, and you can deposit money into the account without too much hassle.
Shop Smarter
Being shopping smart is an acquired skill, one that a lot of teenagers should work on before embarking on adulthood. It’s knowing that sometimes, the clearance aisle is where the party’s at, and spending an $50 on a shirt that you’ll wear once is not great for your wallet.
Shopping for clothes seems to be where most teenagers (including myself) lose their money management skills. At this age, a lot of youth are still figuring out their style and what they enjoy wearing, which is why spending $450 on a single trip to Garage for a few fast fashion items is detrimental to both your bank account and the planet. I’ve learned this from experience.
While shopping, seek out items that you see yourself using/wearing often, and invest in the basics. Thrifting is also a great hobby to start. A smart idea is to make a list of what you’re looking for before going out, so you’re not buying unnecessary items.
Take inspiration from the millennials in your life and chase those discounts!
Track Your Spending
Tracking your spending is essential when it comes to understanding where your money is going and how you can make improvements. There are many apps you can use online to do this for you, but using simple spreadsheet or writing it down in a notebook will get the job done as well.
Knowing where your money is going will help you identify areas where you can cut back. For example, if you’ve noticed that you’ve been splurging too much on entertainment, you can work on allocating that money to a different cause in the next month.
Tracking your spending will help you with knowing how much you need to save in order to meet your goals, or it can also come in handy when you’re creating a budget for yourself. If you know you spent more than you should’ve in a day, you can give yourself a lower budget for the next time you go out. Just a small shift in your spending habits can have a significant impact on your savings.
Look Into Investing
While you may not have a ton of cash to throw around, it’s never too early to learn about investing. The earlier you start, the more time your money has to grow. There are various platforms available that allow you to start small, such as websites and apps for beginners.
Consider starting with stocks, or even cryptocurrency (but remember to do your research first!). By starting early, you give yourself more time for your investments to potentially yield returns.
This doesn’t mean you need to go all-in right now, but gaining knowledge about how the stock market works and how investing can benefit you in the long term is a good asset to have.
Conclusion: Managing Money Is (Mostly) Light Work
Managing your money as a teen might seem intimidating at first, but in reality, it’s all about creating habits now that will help make finances easier for you in the future. From budgeting to saving, tracking your spending, and even learning about investing, each step you take now will pay off in the long run.
Don’t stress if you don’t have it all figured out yet. It’s important that you begin by educating yourself as a teenager, no matter how much or how little you learn. Your future self will thank you for getting an early start on your financial education.