How to Save Money as a 14-Year-Old
Start building a strong financial foundation. This guide offers 14-year-olds practical ways to understand and master their money.
Saving money is a fundamental skill that provides a strong foundation for future financial well-being. For a 14-year-old, understanding how to manage money and build savings can create a sense of independence and open doors to achieving personal aspirations. Developing these habits early teaches valuable lessons about financial responsibility and the power of consistent effort.
Setting Savings Goals
Establishing clear savings goals provides motivation and direction for your financial efforts. Goals can be categorized into short-term and long-term objectives, each requiring a different approach to saving. Short-term goals might include purchasing a new video game, concert tickets, or a specific gadget, typically achievable within a few months to a year. These smaller, more immediate rewards help build confidence and demonstrate the tangible benefits of saving.
Long-term goals involve larger sums of money and require more sustained effort, such as saving for a college fund, a down payment on a first car, or a significant personal investment. Defining these objectives with specific amounts and target dates makes them more concrete and attainable. Breaking down large goals into smaller, manageable milestones can make the saving process less daunting and keep you engaged over time.
Strategies for Earning Money
Earning money provides the resources necessary to build savings and achieve financial goals. For a 14-year-old, various age-appropriate opportunities exist to generate income. Many young people find success with informal jobs within their neighborhood or community.
Household chores, pet sitting, or babysitting offer flexible ways to earn money, often with competitive hourly rates. Lawn care, such as mowing or raking, can also be a profitable venture. These types of jobs allow for direct negotiation of rates and provide immediate payment.
Federal child labor laws, under the Fair Labor Standards Act (FLSA), permit 14- and 15-year-olds to work in non-hazardous occupations outside of school hours. During school weeks, they can work up to 3 hours on a school day and a maximum of 18 hours per week. During non-school weeks, they can work up to 8 hours a day and 40 hours per week. Income earned may be subject to self-employment tax or require a tax return, depending on the amount.
Managing Your Money
Effective money management involves understanding where your money comes from and where it goes. A simple budget is a valuable tool for tracking income and expenses. By recording all money earned and all money spent, you can gain a clear picture of your financial habits. This helps identify areas where spending can be reduced to free up more funds for savings.
Distinguishing between “needs” and “wants” is a fundamental aspect of smart spending. Needs are essential items like food, shelter, and basic necessities, while wants are discretionary purchases that enhance enjoyment but are not strictly required. Prioritizing needs over wants helps ensure financial stability and allows for intentional allocation of funds toward savings goals. Before making a purchase, consider comparing prices and resisting impulse buys. Waiting a day or two before buying an item can prevent unnecessary spending.
Where to Keep Your Savings
Choosing a secure location for your savings is an important step in protecting your money and encouraging its growth. For small amounts, a physical piggy bank or a designated secure spot at home can be a starting point. As your savings grow, however, moving funds to a financial institution offers enhanced security and benefits.
A youth savings account or a joint checking/savings account with a parent or guardian at a bank or credit union provides a safe environment for your money. These accounts are typically insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per depositor, per institution, per ownership category, meaning your funds are protected even if the bank fails. Many youth accounts also offer a small amount of interest, allowing your money to grow over time, typically ranging from 0.01% to over 5% Annual Percentage Yield (APY) depending on the institution and balance tiers. These accounts not only safeguard your savings but also introduce you to the formal banking system, providing a foundation for future financial independence.