Five Money Habits to Start in High School

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Five Money Habits to Start in High School

Developing smart money habits is a bit like smart eating – it’s never too early to start.  By making wise decisions now, you will begin to develop habits that will serve you well throughout your life.

Here are fives ways begin now to begin to develop smart money habits:

1)     Analyze Your Finances

If you are like most teens, your personal finances are probably relatively simple.  Now is the perfect time to start analyzing them because your finances are likely to get much more complicated as you get older. Later in life, you may have to deal with mortgages, insurance, child-related expenses, medical bills and more.  By building some good habits today, you will be well prepared for tomorrow.  Keep a money journal, writing down your expenses each day and analyze them at the end of the week.  You may not realize how much you are spending, for example, on fast food and how it adds up.  Looking at your spending patterns frequently will inspire you to start making smart changes right away.

2)     Start Saving

It is never too early to start saving. Whether you’re saving for the prom, for college or to get a new phone, implementing a practice of regular saving will help you reach your goal.  Start by opening a savings account that will allow you to build interest. If you have a part time or summer job make sure you put a portion of your pay into your savings account.

3)     Put Away a Little Each Month for Retirement

You’re too young to even think about retirement now, right?  Not one bit!  Once you have graduated from college and begun a regular full-time job, you will want to open an Individual Retirement Account as a way to save tax-free for retirement.  In the meantime, though, start saving a little money each month as a way to begin developing the habit.  By beginning now, your money will have more time to grow and the more you will have when it comes time to enjoy it!

4)     Get Creative and Have Fun While Saving Money

Just because you’re saving doesn’t mean you can’t have fun. In fact, you may find yourself having more fun once you decide to get creative about your social life.  For example, instead of going out for “dinner and a movie,” how about hosting a movie night and potluck at your house?  Or, instead of going shopping for a new outfit, invite friends over for a “Trading Day,” where everyone brings one or two items of clothing or jewelry that they never wear. Friends can then trade and begin to build a new wardrobe without spending a dime!  Or how about this? Looking for something fun to do with a group of friends? Sign on to and do a search for teen volunteer opportunities. You’ll have fun and do something good for the world!

5)     Practice the 50/20/30 Rule

Once you are an adult living on your own, you will want to practice what is called the “50/20/30 Rule.” That means taking your after-tax income and splitting it into three categories. You can get into the habit now, but starting managing your money using this Rule as a way to prepare for life on your own.

  • 50% should go toward essential expenses, which are considered “needs”, such as into housing, transportation, utilities and groceries.  Since most teens don’t these expenses yet, we recommend getting into the habit of putting aside 50% for future essential needs, such as renting an apartment and/or attending college.  That way, you will have a head start for when you are out on your own.
  • 20% should go into savings and retirement accounts.  This is a practice you should begin as soon as you can and practice for as long as you are working.
  • The remaining 30% may be spent on lifestyle choices, which include cell phone, entertainment, shopping and personal care.  You can feel comfortable using 30% of your monthly income to enjoy a dinner out, go to the movies, buy a new pair of shoes or get your hair done without feeling guilty because you’ve already taken care of your essentials and priorities.