10 Tips from a Financially-Savvy Teen


A few years ago, teenager Tamara Johnson had no savings and vague plans to attend college. Today she is a freshman at Marquette University, using scholarship dollars for tuition and her personal savings to pay for living expenses.

A financial literacy program — Money Matters: Make It Count created by the Charles Schwab Foundation and taught at Pueblo of Pojoaque Boys & Girls Club — helped Tamara understand and apply the money lessons that her parents had been trying to teach her. Her enthusiasm and grasp of these financial lessons led to her selection as the 2010-2011 National Money Matters Ambassador. More recently, she became the first teen to take the Make Change Count pledge as part of a national campaign sponsored by the Charles Schwab Foundation and the Boys & Girls Clubs of America to make financial literacy more accessible to teens. Through Money Matters and life experiences, here are lessons that Tamara learned.

1. Save money now, because you’ll never know when you’ll need it later.

Now that Tamara is in college, she sees that her savings habit formed in high school is worthwhile. She has enough money to buy essentials, such as a warm winter coat, and pay for holiday travel from college in Milwaukee, Wisconsin to her home in Santa Fe, New Mexico. Tamara told me that some of her friends have just a dollar in their bank accounts, having never considered saving for later. They have to call their parents and ask for money. (See also: 7 Important Lessons Frugal Parents Teach Their Children)

2. Apply for scholarships in your junior year. Don’t wait until the second semester of your senior year.

I heard similar advice from Kimberly Stezala, author of Scholarships 101: The Real-World Guide to Getting Cash for College, who spoke with me about private scholarships. Guidance counselors may not encourage this approach, perhaps because they see so many students who have not taken basic steps to begin the college search process. Nevertheless, middle school students as well as high school freshmen, sophomores, and juniors can compete for scholarship monies. Tamara’s early start helped her to win scholarships that cover tuition payments for the next four years.

3. Learn to budget your money instead of spending whatever you have.

When she was younger, Tamara received an allowance from her parents. At 16, she started earning her own money when she went to work for the Boys & Girls Club. Before she took the financial literacy classes, Tamara was not careful with her allowance and headed to the mall right after getting her paycheck. After completing the program she realized that she should budget her money toward savings and anticipated expenses for things like gas, movies, and clothes.

4. You’ll be surprised at how easy it is to save money and how quickly it builds.

Tamara started setting aside and saving money at 16. Just a couple of years later, she had amassed nearly $4,000. She is using this money to pay living expenses and plans to rebuild and add to her savings by working during holidays and summer breaks.

5. Working together with friends to avoid spending can be fun.

Peer support is a powerful component of the Money Matters program and Make Change Count pledge. Tamara and many of her friends took the financial literacy class together and helped each other learn to put its principles of saving and budgeting into action. Sharing what you know is one part of the four-step pledge.

A few high school friends thought she was crazy for being careful in her spending; Tamara says that many people do not realize the importance of saving until they need money and have none. At college, Tamara talks to her friends about saving because they often notice that she has money to spend when they are broke.

6. Shop for bargains.

When she shopped with her mom’s money at the grocery store as a child, Tamara chose whatever she wanted despite her mom's cautions to spend more carefully. Now that she’s spending her own money for groceries and armed with financial lessons, Tamara is a bargain shopper. She notices specials and uses coupons.

7. Learn to recognize wants and distinguish them from needs.

One of the ways that Tamara identifies what she needs is to consider all of her options. Comparing a premium brand to house brand at the grocery store, for example, can show you that may want a certain (heavily advertised) brand, but you need certain foods.

8. It’s never too late to start saving.

Even if you have made mistakes and have no extra money now, you can become a saver. Though an early start is helpful, saving at any time will put you on the right path to a better financial condition.

9. Take advantage of financial literacy programs.

Sadly, most high schools do not require financial literacy classes for their students. You may need to look at electives, programs offered by outside groups (such as the Boys & Girls Clubs of America, which presents Money Matters), or personal finance websites. Tamara learned not only about saving and budgeting but also how to read a paycheck and how to pay back a loan.

10. Learn to deal with financial decisions face you everyday

Most of us may think of financial decisions in terms of big decisions such as when to buy a house and how to save for retirement. Tamara emphasized that many small decisions have financial consequences. For example, when it’s lunchtime, she needs to choose whether she will eat lunch in the cafeteria or go back to the dorm room to make a sandwich.

Tamara’s parents laid a foundation for financial education by opening a savings account on her behalf and encouraging her to spend wisely. But the financial literacy course provided specific information on topics not discussed elsewhere and gave her new insights. Experiencing success in trying the ideas (such as being able to save money by budgeting and finding alternatives to mall shopping) reinforced these lessons.

Have you taken financial literacy classes? If so, what did you learn, and how did they change your life?

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Guest's picture

I teach financial literacy classes for high school students. I initiated the class four years ago. From this experience, I started a blog (www.krantcents.com) to help spread the word. My students and their families now have access to financial literacy. It is particularly helpful in this community that I have a translation button.