Jump to content

Money-managing tips for a teenager


Libid21
 Share

Recommended Posts

I'm 17 years old with a part-time job. I don't have a lot of bills to pay off and thankfully I don't have to pay for my own gas. I usually spend most of my money on food, but lately I have been getting worried about my spending habits. Maybe I'm thinking about this more now because I just bought another video game (my first of the year) and I get self-conscious when I buy something like that.

I'm just wondering what you guys know about saving money and if you have any advice on how to manage money for a teenager. Major purchases I've made in the past after getting my job in the summer: Samsung HD LCD Monitor, NBA League Pass from DirecTV, a couple video games, PS3 Bluetooth Headseat.

Now I'm worried though because before, it seemed like I was just set on buying and never thought about saving / increasing the money in my bank. I know money is earned so you can spend it on stuff, but I don't want to be that person who buys every thing as soon as it comes out and has every thing they want. I was thinking of getting MLB TV, then Out of the Park Baseball 10, but then I realized ... I'm probably going to want to buy more things when it comes into NFL season. I'll want to buy Madden and then I'll have to think about buying the NFL League Pass...

I mentioned before that I bought the NBA League Pass from DirecTV and now I'm not sure it was fully worth it. I feel like I watch the games just because I bought the league pass instead of watching it because I want to. I was also disappointed because all of the Knicks games were blacked out.

Then I have to think about college and if I go on-campus my first year, I'll want to purchase a gaming console like a PS3 because the one I use is my brother's and he lives at home.

All I'm saying that at first, I was good with managing money. Now I feel like I'm spending too much. I'm just wondering if anyone has any good advice on money-managing for teenagers lol. Thanks.

Link to comment
Share on other sites

Check out some of Dave Ramsey's books. He has a great approach to finances. Most of his material is for helping people that basically made a mess out of their life by not managing their money well for many years. I'm sure the information and principals that he covers could help you. He may even have some material for someone your age.

I'm excited to hear that you've already come to the realization that you need to manage your money instead of letting IT manage YOU. I was in my 30's before I got to that point (with a wife and 3 kids...).

Link to comment
Share on other sites

Your young, dumb, now go have some fun :P (well i can say young since im abit older) B)

agree.

dave ramsey is not some genius or psych. dude just uses common sense, which shows how sad some people are, when dude using common sense is looked at like a guru.

most of rams advice would be not to go into debt, and do not get credit for something you cant pay back. obviously credit is important in home or car buying( although i think he is against the latter). i dont think he would be against getting a credit card to build credit, as long as you have enough to pay it back.

Link to comment
Share on other sites

See I don't want to purchase another thing just to be able to read up on advice on how to manage my money. Dave Ramsey's books sound interesting, but I think buying a book for financial problems like that is a little overkill seeing that I'm just a teenager and I don't have to worry about 95% of the stuff he talks about in his books.

Link to comment
Share on other sites

See I don't want to purchase another thing just to be able to read up on advice on how to manage my money. Dave Ramsey's books sound interesting, but I think buying a book for financial problems like that is a little overkill seeing that I'm just a teenager and I don't have to worry about 95% of the stuff he talks about in his books.

Honestly just have an automatic payment into another bank account and use that money for your spending, this means you may have to save some weeks to buy something big, and the rest gets used on the essentials and then the rest saved

Link to comment
Share on other sites

Oh yeah, and I never use credit card. Although I have on for emergency, it is my mom who essentially pays for it. I use the credit card for gas and whenever I go for groceries. I use the CC obviously for my online purchases too, but even those purchases I try to stop now.

Link to comment
Share on other sites

See I don't want to purchase another thing just to be able to read up on advice on how to manage my money. Dave Ramsey's books sound interesting, but I think buying a book for financial problems like that is a little overkill seeing that I'm just a teenager and I don't have to worry about 95% of the stuff he talks about in his books.

He has regular deals (once a quarter, I think) where you can get his books for $10. I would probably recommend "The Total Money Makeover". While you don't have debt to eliminate, it will give you a good guide on where you could/should go with your finances. If you can learn and apply the information he shares at 17, then the rest of your life will be set!! B)

Link to comment
Share on other sites

the reason i bring up CC is because credit is important in this world, and you should look at building credit early. all credit is, is how well banks/etc can trust you with money. if you get any type of loan, other than federal student loans, then they will need to see your credit to determine your interest rate. the more they can trust you, the lower the interest rate.

I still think ramsey is not some great thinker, just one of the few of us still using common sense in this world.

Link to comment
Share on other sites

the reason i bring up CC is because credit is important in this world, and you should look at building credit early. all credit is, is how well banks/etc can trust you with money. if you get any type of loan, other than federal student loans, then they will need to see your credit to determine your interest rate. the more they can trust you, the lower the interest rate.

I still think ramsey is not some great thinker, just one of the few of us still using common sense in this world.

Credit is legalized slavery. Cash is king. Credit really isn't as important as it's made out to be.

BTW, Ramsey never claimed to be a great thinker. As a matter of fact, one of his sayings is "We give you the same advice that grandma does except we keep our teeth in!"

Problem is that the "common sense" he discusses isn't exactly common anymore. I sure wish someone had pointed me in his direction when I was a teenager.

Picking up one of his books will equip anyone with everything they need to get going...

Link to comment
Share on other sites

Your young, dumb, now go have some fun :P (well i can say young since im abit older) B)

I know it might sound stupid but its probobly true. You are young , you make about 200 bucks a week at most. Just enjoy yourself and study hard, you can save money when you finish college and are making 70k a year.

Thats my opinion but than again i am 23 and in college so i am really not worried about saving at this time.

ONE THING I WOULD DEFINITELY SUGGEST is dont get into credit cards. If you do dont spend more than 200-300 dollars on them.

Edited by Scorpion
Link to comment
Share on other sites

Credit is legalized slavery. Cash is king. Credit really isn't as important as it's made out to be.

BTW, Ramsey never claimed to be a great thinker. As a matter of fact, one of his sayings is "We give you the same advice that grandma does except we keep our teeth in!"

Problem is that the "common sense" he discusses isn't exactly common anymore. I sure wish someone had pointed me in his direction when I was a teenager.

Picking up one of his books will equip anyone with everything they need to get going...

I am sorry for double post but i had to comment on this. I agree with it 100%

Many people live paycheck to paycheck because they have too much credit. They want brand new cars, they want credit cards to buy tv's ps3's clothes etc, they want loans to take vacations. All this adds up when you look at the interest and i think like 70% of Americans give 15-20% of they paycheck on interest payments. Why do you think there are so many credit card companies out there that are giving all these rewards and trying to get you to use their cc's.

Edited by Scorpion
Link to comment
Share on other sites

Credit is legalized slavery. Cash is king. Credit really isn't as important as it's made out to be.

BTW, Ramsey never claimed to be a great thinker. As a matter of fact, one of his sayings is "We give you the same advice that grandma does except we keep our teeth in!"

Problem is that the "common sense" he discusses isn't exactly common anymore. I sure wish someone had pointed me in his direction when I was a teenager.

Picking up one of his books will equip anyone with everything they need to get going...

if you want a loan for anything it is. I never told him to go and live on credit. i said build your credit. you can build your credit, and not be indebt to any1. get a credit card, and treat it like a debit card, so you only use the money you have.

i know its not common anymore, but that is because people dont think anymore. I just learned this common sense early, especially living in a single parent household. I also watched the news and history channel as a child.

Ill say no thanks to his book. i think his books are more for people in debt, trying to get out, not for people at zero. of course than can help, but for someone at zero, id recommend just listening to his program a few times.

Link to comment
Share on other sites

I know it might sound stupid but its probobly true. You are young , you make about 200 bucks a week at most. Just enjoy yourself and study hard, you can save money when you finish college and are making 70k a year.

Thats my opinion but than again i am 23 and in college so i am really not worried about saving at this time.

ONE THING I WOULD DEFINITELY SUGGEST is dont get into credit cards. If you do dont spend more than 200-300 dollars on them.

im confused on your last sentence. why would you want to spend lots of money on a credit card? that seems counter productive, if your trying to stay out of debt etc.

Link to comment
Share on other sites

I am sorry for double post but i had to comment on this. I agree with it 100%

Many people live paycheck to paycheck because they have too much credit. They want brand new cars, they want credit cards to buy tv's ps3's clothes etc, they want loans to take vacations. All this adds up when you look at the interest and i think like 70% of Americans give 15-20% of they paycheck on interest payments. Why do you think there are so many credit card companies out there that are giving all these rewards and trying to get you to use their cc's.

ummm credit and debt are two different things. you can have good credit, and no debt. there are more than one way to get good credit without going into debt. one way is bills, but i have heard, they are harder to justify.

Link to comment
Share on other sites

if you want a loan for anything it is. I never told him to go and live on credit. i said build your credit. you can build your credit, and not be indebt to any1. get a credit card, and treat it like a debit card, so you only use the money you have.

i know its not common anymore, but that is because people dont think anymore. I just learned this common sense early, especially living in a single parent household. I also watched the news and history channel as a child.

Ill say no thanks to his book. i think his books are more for people in debt, trying to get out, not for people at zero. of course than can help, but for someone at zero, id recommend just listening to his program a few times.

ummm credit and debt are two different things. you can have good credit, and no debt. there are more than one way to get good credit without going into debt. one way is bills, but i have heard, they are harder to justify.

The only way to build a credit score is to accrue debt. If you pay cash for everything, why would you need credit? For someone at age 17 it wouldn't be unrealistic to start saving NOW for a house and pay CASH!!! Which would be better, being (as Cappy put it) a legal slave to the mortgage company, or having INSTANT 100% equity in the property?

Don't let the world system fool you into believing that you HAVE to have credit. You only need it if you plan to borrow someone else's money.

Link to comment
Share on other sites

The only way to build a credit score is to accrue debt. If you pay cash for everything, why would you need credit? For someone at age 17 it wouldn't be unrealistic to start saving NOW for a house and pay CASH!!! Which would be better, being (as Cappy put it) a legal slave to the mortgage company, or having INSTANT 100% equity in the property?

Don't let the world system fool you into believing that you HAVE to have credit. You only need it if you plan to borrow someone else's money.

THIS.

credit card companies want you in debt. The last thing they want you to do is pay them off quickly. They're not making any money when you do that.And for real don't let peer pressure force you into thinking you have to have credit. Yea, it sometimes might get tight, but not as tight as that chokehold debt has on you. The best advice is to learn to live within your means and don't spend money you don't have. The OP sounds pretty smart just for asking because most 17 years old are not thinking.

But either way, you can get yourself in a bind. either way, worrying over money, whether you are worried about saving it or spending it can be obsessive, which isn't good. Just get with the business of living and not worrying.

Link to comment
Share on other sites

The only way to build a credit score is to accrue debt. If you pay cash for everything, why would you need credit? For someone at age 17 it wouldn't be unrealistic to start saving NOW for a house and pay CASH!!! Which would be better, being (as Cappy put it) a legal slave to the mortgage company, or having INSTANT 100% equity in the property?

Don't let the world system fool you into believing that you HAVE to have credit. You only need it if you plan to borrow someone else's money.

Not true.

Lets say he did buy that house in cash..... He still should have insurance on that house... and guess what insurance companies do when they factor in how much of a premium you pay?? They check your credit same thing for car insurance, your credit rating directly effects how much money you have to pay for insurance.

When he goes to turn on utilities in that house, the power, water, cable etc guess what most will do??

Yup check his credit.....which directly can effect how much of a deposit he has to put down to turn utilities on.

Lets say instead of a house phone he decides to get a cell phone..... guess what they are going to do if he is a new customer?

Yup check his credit.

Try as people would like to dismiss it, the act is in todays world credit IS important.

so much now that a lot of jobs run credit checks in addition back ground checks/drug tests.

If he ever wants to work for a bank or any sort of company that deals with finances you best believe his credit will be checked. and as odd as it may seem not having anything there can actually be a red flag....not in all cases but it certainly could.

Anonymous is 100% right you can have credit with out having debt, you just have to be smart about it. like most credit card companies give you around a 25 day grace period on purchases, that means if you pay it off before 25 days you pay no interest on it.

You can keep it open and active by just running small things like gas and foo, and then paying it off before the 25 days, you can do things like take out secure loans which is nothing more then you borrowing your own money and paying yourself back.

It generates a trade line, and often there is not even a inquiry on the report.

Credit is not the evil monster some try to portray it to be if you are smart about it.

Link to comment
Share on other sites

Not true.

Lets say he did buy that house in cash..... He still should have insurance on that house... and guess what insurance companies do when they factor in how much of a premium you pay?? They check your credit same thing for car insurance, your credit rating directly effects how much money you have to pay for insurance.

When he goes to turn on utilities in that house, the power, water, cable etc guess what most will do??

Yup check his credit.....which directly can effect how much of a deposit he has to put down to turn utilities on.

Lets say instead of a house phone he decides to get a cell phone..... guess what they are going to do if he is a new customer?

Yup check his credit.

Try as people would like to dismiss it, the act is in todays world credit IS important.

so much now that a lot of jobs run credit checks in addition back ground checks/drug tests.

If he ever wants to work for a bank or any sort of company that deals with finances you best believe his credit will be checked. and as odd as it may seem not having anything there can actually be a red flag....not in all cases but it certainly could.

Anonymous is 100% right you can have credit with out having debt, you just have to be smart about it. like most credit card companies give you around a 25 day grace period on purchases, that means if you pay it off before 25 days you pay no interest on it.

You can keep it open and active by just running small things like gas and foo, and then paying it off before the 25 days, you can do things like take out secure loans which is nothing more then you borrowing your own money and paying yourself back.

It generates a trade line, and often there is not even a inquiry on the report.

Credit is not the evil monster some try to portray it to be if you are smart about it.

There are companies that will not use the lack of a credit score against you. Sure, it takes more effort to find them but they are out there. The credit monster is avoidable. Sure it may take larger deposits but if you operate on a cash basis this really isn't a concern as you'll get your money back anyways. I know most utilities will actually give the deposit back after a year of consistent payment history with them. Most employers are reasonable enough to ask why you don't have a credit file. If not, is that really someone you want to work for if they are that impersonal?

Even having a credit card and paying it off faithfully is statistically bad as it's been proven that those people spend on average 18% more than those who pay by cash or debit card.

I'll be glad when my credit score is 0. It will be quite some time before that happens but I can't wait. I've been voluntarily enslaved my entire adult life and I'm finding my way out of it slowly but surely. I drive a paid for vehicle and will never finance another one. I've already put aside almost $2,000 for my next vehicle. By the time my current car dies, I'll be able to afford a very nice used car and pay cash for it. Once I pay my house off I'll truly be free!

Link to comment
Share on other sites

The reason I can say with confidence you don't need a credit card for any of that is because I have owned maybe 2 in my entire life and probably never spent over 200 dollars on either before I cut them into pieces. It makes some things slightly more difficult maybe, but nothing I have encountered. I will occasionally buy a prepaid credit card for internet purchases or one to keep in the car in case of emergency, but otherwise I'm okay. Never had a phone or electric company inquire about a credit card. i have always been excellent about paying utility bills so I always assumed that's what they checked on. If you're a first timer, even with a bigger deposit, they usually refund it in the form of bill credit if you keep up your bills anyway.

Link to comment
Share on other sites

Pay yourself FIRST. A good rule of thumb, considering your age, is to pay yourself 10% of your paycheck and put it in the bank. If you do this your entire working career you will have a substantial amount of money when you are ready to retire. Once you have a career you can pay yourself 10% for savings for retirement and then 10% for a down payment on a home.

Don't get caught up in credit card debt. It will kill you. You need to have credit cards in order to build up credit but only spend on the card what you can afford to pay off when the bill comes. In other words, if you go to the grocery and spend $200 in cash now, use your credit card and keep the cash in the bank. When the bill comes, write a check and all is good. Credit card debt SUCKS!

Clark Howard says:

50% for bills/necessities

25-30% for savings

20-25% for spending. That number of course changes based on your age and lifestyle.

thank BOP. that was my whole point.

i ant to add credit really depends on the life style. If you are the type that wants to completely avoid debt, then i doubt you got to worry about credit, but if you are going to buy a car or house, and not pay it off in cash, then you gotta worry about credit.

Link to comment
Share on other sites

Not true.

Lets say he did buy that house in cash..... He still should have insurance on that house... and guess what insurance companies do when they factor in how much of a premium you pay?? They check your credit same thing for car insurance, your credit rating directly effects how much money you have to pay for insurance.

When he goes to turn on utilities in that house, the power, water, cable etc guess what most will do??

Yup check his credit.....which directly can effect how much of a deposit he has to put down to turn utilities on.

Lets say instead of a house phone he decides to get a cell phone..... guess what they are going to do if he is a new customer?

Yup check his credit.

Try as people would like to dismiss it, the act is in todays world credit IS important.

so much now that a lot of jobs run credit checks in addition back ground checks/drug tests.

If he ever wants to work for a bank or any sort of company that deals with finances you best believe his credit will be checked. and as odd as it may seem not having anything there can actually be a red flag....not in all cases but it certainly could.

Anonymous is 100% right you can have credit with out having debt, you just have to be smart about it. like most credit card companies give you around a 25 day grace period on purchases, that means if you pay it off before 25 days you pay no interest on it.

You can keep it open and active by just running small things like gas and foo, and then paying it off before the 25 days, you can do things like take out secure loans which is nothing more then you borrowing your own money and paying yourself back.

It generates a trade line, and often there is not even a inquiry on the report.

Credit is not the evil monster some try to portray it to be if you are smart about it.

thanks man. unless you already have lots of money, then your gonna need credit. Look how much houses cost these days. I highly doubt the dude is gonna have $100,000+ laying around to buy a house.

like falconsd56 said, be smart about it. If you play the game right, then you can come out a big winner.

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

 Share

×
×
  • Create New...