How Much Money Should a 15-Year-Old Have?

Financial literacy provides teenagers with valuable skills for managing money and making informed decisions. While there’s no single “correct” amount of money a 15-year-old should have, the focus is on establishing sound financial habits. This foundational knowledge helps young individuals build responsibility and prepare for greater financial independence.

Sources of Money for a 15-Year-Old

Fifteen-year-olds can acquire money through various avenues. Common sources include a regular allowance from parents or guardians, often tied to household chores. Occasional odd jobs, such as babysitting, pet sitting, or yard work for neighbors, offer opportunities to earn money. Gifts for birthdays, holidays, or other special occasions contribute to a teenager’s financial resources.

Part-time employment is another significant source of income. Federal labor laws, specifically the Fair Labor Standards Act (FLSA), govern the types of jobs and hours minors can work. For 14- and 15-year-olds, work is limited to outside school hours. During the school year, they cannot work more than 3 hours on a school day or 18 hours in a school week, nor before 7 a.m. or after 7 p.m. During non-school periods, such as summer, hours can extend to 8 hours per day and 40 hours per week, with evening work permitted until 9 p.m.

Certain hazardous occupations are prohibited for minors under 18, including most manufacturing, mining, and jobs involving power-driven machinery. Many states also require work permits for minors, which involve school and parental approval.

Typical Expenses and Spending Habits

Fifteen-year-olds commonly face expenses reflecting their developing independence and social lives. Entertainment often accounts for significant spending, including movie tickets, video games, streaming subscriptions, or concert attendance. Clothing and accessories are frequent purchases, driven by personal style and social trends. Personal care items, such as cosmetics, hair products, or hygiene essentials, represent another regular outflow of funds.

Snacks, beverages, and casual meals with friends contribute to daily or weekly expenditures. Transportation costs, such as public transit fares, gas money for rides, or contributions to family car expenses, can also be a factor. Learning to distinguish between “needs” and “wants” is important for managing expenses. Making conscious spending choices helps teenagers allocate money effectively toward items aligning with their priorities and values.

Smart Money Management and Saving

Effective money management involves understanding income, expenses, and financial goals. A simple budget is a practical tool, outlining expected income and planned expenditures. This can involve tracking all income and categorizing all expenditures over a period, such as a week or a month. Regularly reviewing these figures helps a teenager identify spending patterns and areas for adjustment.

Setting financial goals provides motivation for saving. Goals can be short-term, like a new video game or clothing item, or long-term, such as contributing towards a college fund or a future car. Prioritizing saving a portion of all income, even a small amount, helps build a consistent habit. The concept of “pay yourself first” encourages putting money into savings immediately upon receipt, rather than waiting until all other expenses are covered.

Savings accounts are fundamental tools for managing and growing money. For minors, these accounts require a parent or legal guardian as a co-owner or custodian, ensuring oversight until adulthood. Accounts are insured by the Federal Deposit Insurance Corporation (FDIC), protecting deposits up to specified limits. Some banks offer accounts designed for teens, with features like debit cards with spending limits or online banking access under parental supervision. While interest earned may be modest, it introduces the concept of money earning money, demonstrating the power of compounding.

Regarding taxes, a 15-year-old dependent needs to file a federal income tax return if their earned income exceeds the standard deduction. A lower threshold applies for unearned income, such as from investments. If self-employment income from activities like babysitting or yard work totals $400 or more, a tax return is required to pay self-employment taxes (Social Security and Medicare). Even if not legally obligated to file, it is advisable to do so if federal income tax was withheld from paychecks, as a refund may be due.