Spending Habits of Teens

Teenagers earn, save, spend and borrow billions of dollars each year. They are spending more money than previous generations and are spending that money at younger ages. From clothing and personal appearance products, to food and entertainment, teens in the U.S. spend over $84 billion a year. But are they spending that money wisely? And are they learning what they need to know about how to manage money to create a sense of financial security for themselves both now and in the future? Read on to find out if you are a good spender and to get started with what you need to know about smart money management practices.


Are You A Good Spender?

The first thing to think about in learning about money management is to figure out whether or not you are currently a good spender. Read through the following statements and see which ones apply to you and which ones do not:

  1. Each time I receive money, I usually put a small amount of cash aside as savings.
  2. Each time I receive any money, I usually deposit it into a checking or savings account.
  3. I keep track of the money I receive from all sources.
  4. I set aside a pre-determined portion of my money for regular weekly expenses.
  5. I set aside 10% of the money I receive for savings.
  6. My money is managed (both spending and savings) according to a written spending plan or budget.
  7. My food and grocery spending is planned in advance and is done with a list.
  8. I rarely make less than two trips a week to the grocery store or convenience store.
  9. Grocery and other coupons are used whenever possible.
  10. For purchases large and small I usually do comparison shopping to get the best price.
  11. I don’t dine out more than two times per week.
  12. I account for all my cash spending my collecting receipts.
  13. I am saving money towards my college education.
  14. I have given food/money/donations to a charity in the past two weeks.


If you answered “yes” to most of the statements above, keep up the good work you are already doing and begin to think about making changes wherever you did answer with a “no.” If you answered “no” to the majority of statements above, you may have some real work ahead of you in terms of changing your money habits. But that hard work will eventually be worth your while – so hang in there as you begin to work to make positive changes!



Tips On Improving Your Spending Habits:

Adults will go out of their way to teach their kids and teens about all kinds of things – but often the importance of imparting smart money management techniques gets overlooked. So if you are looking to learn ways to be better with money, ask questions about money management to your parents or other trustworthy adults around you. And read through the following tips to get an idea of what to do and what not to do when it comes to your money:

·         Write down any poor spending habits you have, and brainstorm some ideas about how to make positive changes in those particular areas. For example, if you are prone to go overboard on clothes spending, decide on a reasonable amount to spend each month, put that money is separate envelope, and know that once that envelope is empty that you are done with clothes shopping for that month – NO exceptions!

·         Develop a budget where you list the money you have coming in (allowance, part-time jobs, gifts, etc.), as well as the things you tend to spend money on (cell phones, clothes, food, entertainment, gifts, etc.). Make sure that you have more money coming in than you spend – if you find this is not the case, look for ways to increase the amount of money coming in and/or look for areas of spending you can cut back on.

·         Begin collecting receipts for EVERYTHING you spend if you find you have no idea where your money goes. A little bit here and a little bit there can add up quickly – so this is a good way to figure out what the bulk of your money is being spent on.

·         Begin saving a dollar a day or put all pocket change in a jar and contribute that money to your savings.

·         Look for alternate activities to spending money. If you are looking for things to help you to feel good or activities that feel fun – come up with some ideas that don’t involve laying out lots of cash. 

·         Use coupons or mail-in rebates for what you buy.

·         Wait for sales as the savings from comparison shopping can really add up.

·         Take advantage of shopping outlets, buy certain items used, or fix up belongings you already have rather than trashing them and buying something new.

·         Avoid carrying a lot of cash on you if you know you will spend it all quickly.

·         Don’t get into the habit of borrowing money from your parents or paying with credit cards if it something you cannot currently outright afford. There are too many people in this country who have spent far more than they are earning. They end up drowning in their debt and have that stress hanging over their heads for years. Credit card debt can mount quickly, and spiral out of control before you know it. So get into the habit of buying things once you can pay for them in full. This way you don’t have to worry about debt – and you won’t have to worry about paying more for the item in the end because you are paying interest on it through the credit card. 

·         To learn good money management techniques for the future, divide money into the following categories: spending, saving, investing, and donations. The money in savings can be for a particular item that you cannot currently afford or it can just be for a rainy day. When you have $500 saved, it is a good idea to look into investing in certificates of deposit, stock, mutual funds or savings bonds so you will have money invested for the future. FX recommends that you seek advice from someone very knowledgeable about investing money before you lock your money in somewhere.


Before Laying Out The Green, Ask Yourself This About The Goods:

There are many people out there who are impulsive buyers or who need that immediate gratification – they see it, they want it, they buy it. But in many cases this can leave people with way more things than they really need, and way less money than they would really like. So before you make a purchase – big or small – think about the following:

  • Do I really need this item?
  • Is the price reasonable to justify buying it?
  • Is this the best time to buy the item in terms of my being able to cover the cost or possibly being able to get in on sale at another time?
  • Even though it says “on sale,” do I really want it and is it still worth the money? (Sometimes people are tempted to buy something simply because it is on sale and the idea of getting a bargain feels better than having the actual item)
  • Do I really love this item? (If you waver back and forth about whether or not to get something or whether or not you like, do NOT buy it!)
  • Are there any less expensive alternatives to what I originally wanted?
  • Will it truly satisfy me and my inner needs?
  • Have I checked and researched the item I want to make sure it is a reliable item and works the way I want it to?


So now that you know some steps you can take to improve your money management skills, FX hopes that you will do what you can to learn to be more responsible with money. The fact is that teens who learn good money management skills are more likely to become adults who can make sound financial decisions, avoid excessive debt, and manage income and expenses to reach their financial goals.

For more information on money-management techniques, please go to the National Endowment For Financial Education’s (NEFE) High School Financial Planning Program: http://hsfpp.nefe.org/home/