Teenagers Guide to Financial Independence

If you’re looking to find out how to grow your money, you’re in the right place. Welcome to the first step to understanding personal finances. Join the Savings Team!

This journey goes beyond saving up a few euros. We want you to understand how money works, which is the safest way to avoid going in the red and how to make your current account grow. 

Here are a few tips:

1. Set some objectives

In any process, setting good objectives is always the first step. It’s like having a map of your financial future, where the treasure is marked with an “X”. That way, you can’t get lost.

Be sure to:

• Have clear goals. Do you want to buy a scooter? Well, maybe you’ll have to skip some meals out. Priorities. 
• Set short- and long-term objectives to keep you motivated. Nothing will give you such a boost as remembering your reasons.
• Make your objectives both realistic and motivational.You won’t be motivated if your goals are too easy or not important enough to make small sacrifices. 

2. Create a budget

But, how will I know what I need to give up and what I can afford? Don’t worry, we have the answer. A budget will help you to know whether you can buy those trainers you want, or if you’d be better to wait until next month. Whether you’re meeting your goals this week, or if you should hold back a bit.

It’s like having a guide to let you know if you’re on the right track towards your objectives (the ones we set before, remember?). Basically, it helps you to plan how to use your money wisely, according to your own rules.

If you don’t know how to make a budget, follow these steps:

1. Take a tally of your regular income (allowance, wage, gifts, etc.) and expenses.
2. Identify which expenses are essential to minimise or even eliminate them.
3. Set aside part of your income for savings. Remember: CONSISTENCY.

To stick to a budget, you must be disciplined, but don’t forget about your reasons. There are budgeting apps out there that can help you organise your finances, set reminders and keep better control. Why not give them a try?

3. Learn and make good decisions

If your goal is to save and make your account grow, you should start now. Four words: learn to shop well.  

And what does shopping well mean? Easy. Before buying anything, ask yourself three things:

• Is it a need or a want? Avoid impulsive buying.
• Is it in my budget? You can spend money on fun things, of course, but it is best if you set some limits and you’re honest with yourself.
• Is it the best price I can find? Compare prices, look for discounts and take advantage of promotions. Every euro counts.

One final piece of advice: consider having a financial calendar to keep track of the year’s expenses. That way, your friends’ birthdays won’t come as a surprise and you’ll have no excuse not to put in €5 for a gift. 

What do think about these tips? If you think they sound good, put them into practice and let us know.

To sum up:

• Planning is key: objectives, a budget, a calendar…
• Understanding the balance between income and expenses is the most important step

Today’s habits will shape your financial future. Every little saving helps you.