By the time you leave high school – and often before – learning how to manage your money becomes super important for making financial decisions for yourself. If you can budget, manage your money, and make wise decisions about your spending and saving habits, then you’re well on your way to being financially literate.
Having skills for handling money are a huge advantage for your entire life, and could help to prevent you falling into substantial debt – which let’s face it, is never an ideal situation. So here are 5 tips to help you get smart about money and start saving up.
Open a bank account
Even if you don’t have a recurring income, it’s a great idea to have your own bank account and debit card so that you’re ready for when you do start earning.
You’ll also have somewhere safe to put pocket money and monetary gifts that you might receive, instead of risking it dropping out of your pocket at school, going through the washing machine, or tempting you to buy something you don’t really need.
Putting your birthday money into a bank account rather than spending it on something you don’t really need will have you thanking yourself in the long run.
Find a job
Once you start earning your own money, you’ll appreciate it’s value much more. Plus, it might encourage you to make better decisions about what you buy when you know the effort it took to earn.
If you start thinking about the cost of things in terms of how many hours it took you to earn that amount of money, you might think twice before buying the first thing you set eyes on.
If you’re applying for jobs online, make sure to check out our online job application tips.
Do a budgeting challenge
If you haven’t seen Teenage Boss, it’s a show where teens in a household take over the family budget for a month. Why not try it for yourself? It could be practical and fun.
Speak to your parents and work out:
- Monthly household income
- Monthly expenses (from groceries and utilities to school expenses)
- A savings goal
- What changes you can make to reach your goal
You might consider meal planning, bulk cooking, exploring free activities, or recycling cans and bottles for extra cash.
Don’t use credit cards or ‘buy now, pay later’
Avoiding credit cards and ‘buy now, pay later’ schemes like Afterpay is crucial for maintaining financial stability, especially as a young person. Even though it might seem convenient, these services often encourage overspending or debt increase. Here’s some reasons why not to use these services
- Debt: Using credit cards or Afterpay can give you a false sense of how much money you actually have – and this can spiral out of control quite quickly. If you end up accumulating debt from overspending, it can be difficult to repay, especially with high interest rates.
- Discipline: Learning to manage finances without relying on credit encourages responsible spending habits and ensures you only spend what you can afford.
- Goals: Saving and investing early can set you up for financial success in the future, whether it’s for education, travel, or major purchases like a car or home.
Instead of relying on credit, focus on building a solid savings plan and budgeting effectively. By doing this, you’ll not only avoid unnecessary debt, but can also strengthen your financial independence and resilience.
Start saving now
Start saving today — all you need to do is calculate your current funds or weekly earnings and commit to setting aside a percentage regularly.
Make sure your money isn’t too easy to get to, otherwise temptation can be hard to resist.
When you set up your bank account, talk to the bank about a savings plan as well. They can give you lots of ideas about the best way to save for you, including where your savings will get the most interest.
The money you put away could help you buy a car, cover university fees, or pay for your gap year.
More money tips
You can find lots more useful resources and tips on how to handle money on our website here.