3 ways teens can save money this summer

Learning to save money is an excellent skill that can benefit individuals throughout their lives. It's helpful to start saving from an early age, whether you're saving for future educational needs or a large purchase, like a vehicle or down payment on a home. Starting in your teenage years, you can set aside money for the future. Learn about these three ways teens can make money this summer with their savings.

Open a savings account

It's not easy to save money if you don't have anywhere to keep the funds you're setting aside, which is why the first tip is to open a savings account. A savings account is a deposit account from a financial institution that offers interest on the money kept in it. When you open this type of bank account, you may need to start with an initial deposit. Some banks require a deposit of $100, while others have higher starting balance requirements. 

It's wise for teens to open savings accounts as soon as they have steady sources of income. A savings account federally insures funds up to a quarter of a million dollars, and the money stored in one gets protected from significant market fluctuations that can cause losses in other types of investments. The funds in the account are insured in the unlikely event of an insured-bank failure. Financial institutions pay interest on most savings accounts, although your actual annual yield will depend on your bank. 

One of the significant advantages of having a savings and a checking account is creating distance between what you're saving and what you spend on everyday items. If you're using the same account to buy gas for your car or purchase new clothes, you may not have the willpower to avoid spending all the money in the account. Setting aside funds and putting them in a separate account can increase your chances of saving for the future.  

A checking account also may not offer the exact yield as a savings account, so keeping a portion of your money in a savings account can help the amount grow faster. The national average annual percentage yield is currently 0.08%, but some financial institutions can offer higher interest rates to qualified clients. Banks may also limit the number of transfers or debits from a savings account, encouraging you to keep the funds within your account instead of transferring them into your checking account for use.

Track your spending 

When you're a teen, you may not be responsible for expenses like rent or utilities, but you may still have to pay for some of your stuff. Many teens get part-time jobs they can work after school and on weekends. You can increase your availability to earn extra cash before returning to the classroom during the summer. But whether you're keeping your gas tank full or enjoying a night out with friends, it's wise to track your spending. It's easier to learn ways teens can save money this summer if you know where your money goes. 

If you like to track your expenditures by hand, you can pick up a notebook and date each entry. Use categories to separate your spending areas, such as fuel, food, and entertainment. If you prefer to track digitally, you can use budgeting and tracking apps that pull information from your bank account. Some apps offer cash back when you spend money at certain stores. Your bank may also provide tools and resources that make it easier to track your spending.

As you look at where your money goes each month, you can try making a budget to keep your spending under control. If you're in the habit of overspending on apparel and accessories, try skipping a weekend shopping trip once or twice a month to save a little cash. Learning to budget can help you prevent spending everything you earn, and these skills are valuable as you work on your financial literacy. 

Earn more this summer

Another way to learn how teens can save money during the summer is to find ways to earn more. If you don't currently have a job, you could look around your community for retail stores or restaurants that are hiring. Many national chains and small businesses will hire teenagers who demonstrate a good work ethic and dependability. Since you'll have some time off school during the summer, you can work extra hours to get more money to save. 

A summer job can benefit a teen in several ways beyond the financial advantages. It's certainly nice to earn a little extra money you can use during the school year when you don't have as much time to work. But any job you can work can also provide valuable experience that can aid your professional aspirations. Holding down a job demonstrates that you are dependable and trustworthy. You can also learn practical skills, such as time management and organization.

Delivery drivers and personal shoppers

If you can drive, you might qualify for a job as a delivery driver. Some restaurants offer delivery services, such as pizza joints, while others partner with third-party providers like Uber Eats and DoorDash. 

Teens can also work as personal grocery shoppers, picking up groceries and dropping them off for people who can't or don't want to shop for themselves. Depending on the order size and the distance traveled, drivers may qualify for additional tips and fees.

Babysitting and helping neighbors

You may have other opportunities if you can't find a job or are not old enough to work outside the home. Your parents may be willing to pay you to do extra chores around the house or babysit younger siblings. 

If you'd prefer not to ask your parents for different tasks, or they're not financially able to pay you for additional chores, consider jobs you could do around your neighborhood. Your neighbors might be willing to pay you for yard work, such as mowing and trimming their lawns or weeding their gardens. 

More ways to earn and save money

Teens can sell extra stuff on Facebook Marketplace or through local online classifieds. If you're comfortable with animals, you could offer your services as a pet-sitter in your neighborhood. Teens who know a lot about sports may be able to work as referees or umpires for recreational sports leagues or Little League teams in their communities. If you like to be in front of the camera, consider what type of video content you could share if you started a YouTube channel and got sponsors.

At Alliant Credit Union, we enjoy serving teenagers who are working toward the goal of saving money and preparing for their futures. We offer high-yield savings and savings accounts for kids and teens with low starting balance requirements to accommodate all financial situations.

Learn more about saving for the future:

• You are not on sale
• What should you know about how to finance a car?