Teenagers are getting smarter about money, but even the savviest young saver can make some common missteps. Whether you're earning your first paycheck, getting an allowance, or just learning the ropes of personal finance, it's important to build smart habits early. Here are five money mistakes teens often make—and how you can steer clear of them.
The Mistake:
Getting paid and immediately splurging on clothes, food, or entertainment.
How to Avoid It:
Set up automatic transfers to your savings each time you get paid. Find an amount that works for you - even saving 10% of every paycheck will accumulate over time into a financial safety net.
In addition, before purchasing something you want but don't truly need, try the 24 hour rule. Wait a day, and if you're still thinking about that pair of shoes or concert ticket and you can afford it, go ahead and purchase.
The Mistake:
Swiping your debit card or tapping your phone without thinking—and then wondering where your money went.
How to Avoid It:
Start using a simple budgeting app or spending tracker. Many credit unions (including us!) offer mobile banking tools that show your balances in real time. Knowledge is power—especially when it comes to your money.
The Mistake:
Not saving up for bigger goals like a car, college, or even a summer trip.
How to Avoid It:
Set a goal, give yourself a timeline, and break it into smaller steps. Want $1,000 for a car by next year? That’s about $20 a week. At Elevate, we have special shares so you can break your savings up by different goals or purposes. Consider opening a savings just for that goal to keep it out of sight and out of mind.
The Mistake:
Spending money just to keep up with friends or social media trends.
How to Avoid It:
Remember: You don’t need to buy what everyone else is buying. Practice intentional spending by asking yourself, "do I really want this, or am I just buying it because someone else did?". You’ll be surprised how much you can save just by hitting pause.
The Mistake:
Waiting until adulthood to understand how credit works—or worse, getting into debt without understanding the consequences.
How to Avoid It:
Start now! Learn about credit scores, how interest works, and how to build a good credit history. If it makes sense for you, consider becoming an authorized user on a parent, guardian, or trusted adult's credit card. This can help you build credit early.
When you turn 18, consider opening your first credit card. The sooner you can start building your credit history, the brighter your financial future!
Making mistakes is part of learning—but when it comes to your money, a little education can go a long way. Avoiding these common missteps now can set you up for a financially confident future.
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