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High school students — generally, those aged between 14 and 18 — are at the beginning of their financial journey, and one of the most important financial habits to learn is saving.
Many high school students may start entering the workforce and pick up a part-time job while in school. They may also be getting some financial support from parents or mentors, and while a parent or mentor might help to get a student on the right track, it’s important for the student to take ownership of their savings.
At this age, there are so many goals to prepare for, not the least of which are moving out and going to college or starting their careers. The earlier a teenager starts saving, the better prepared they’ll be.
- 61 percent of those between ages 13 and 18 have a bank account, while the rest are unbanked, according to a 2019 survey by Junior Achievement.
- The same survey found that 32 percent of teens receive allowances for doing chores.
- Pew Research data shows that 36.6 percent of teens had a summer job in 2021 — the highest teen summer employment rate since 2008.
- 62 percent of Generation Z (aged 15 to 21) have started saving, according to TD Ameritrade’s 2019 Young Money survey.
- While 77 percent of adults surveyed by Bankrate have at least some emergency savings, only 24 percent of Gen Zers say they have emergency savings, the Young Money survey found.
- Teens between ages 13 and 19 self-reported spending $2,274 on average each year, according to a 2021 Piper Sandler survey.
How high school students make money
With 36.6 percent of teens having summer jobs in 2021, employment is a valuable source of income for many high schoolers. The biggest job sector for employed teens was food and hospitality, followed by retail, according to the Pew Research Center data.
The 2021 teen employment rate marked an upward turn in what had been a downward trend — the rate is the highest it’s been since 2008. With a higher percentage of older high schoolers employed, more students will have the opportunity to build their savings.
A study from the National Library of Medicine found that while a job can provide learning opportunities for high schoolers, it’s important that work hours don’t “crowd out” other vital high school experiences, including extracurricular activities and cultivating friendships. Surveyed students with steady but limited work hours had higher educational aspirations and were more likely to want to save for college.
High schoolers may also pad their savings with money from gifts or allowances. 32 percent of teens receive an allowance from doing chores, Junior Achievement reported in 2019.
How high school students spend money
Teens aged 13 to 19 reported spending an average of $2,274 each year, a 2021 Piper Sandler survey found.
Where that spending goes differs by gender. The top expense for surveyed males was food, while the top expense for surveyed females was clothing.
A small number (9 percent) of the surveyed teens invested in cryptocurrency in the last year. Of those that did, 78 percent were male.
Here are the top categories where males and females reported spending their money:
High school expenses and average costs
High schoolers and their families are increasingly spending more on costs related to school. An annual survey by Deloitte found that the average amount spent on back-to-school items was $612 per student in 2021, an increase of 16 percent from the previous year.
Technology products faced the biggest increase in costs. Spending on electronic gadgets — including phones, tablets and digital subscriptions — increased by 47 percent from the previous year. Meanwhile, spending on computers and hardware increased by 28 percent.
Here are the top back-to-school expenses and their average costs:
|Average amount spent
|Clothing and accessories
|Computer and hardware
Source: Deloitte back-to-school survey, July 2021
10 tips for saving money in high school
High school years are a great time to start saving money and develop financial literacy. Teens are old enough to get a job, but are still getting large expenses covered by their parents. This means that they have less to spend on rent and utilities and more that can go to savings.
Some goals high schoolers might want to save for are a spring break trip, a car and college. Here are some strategies to bring these goals closer to fruition and to become wiser with money.
1. Create a budget
A budget can help you prepare for expenses and limit unnecessary spending. Use a budget to calculate school expenses, bills, costs for fun activities and savings contributions. Try to check in with the budget regularly each month, and consider using a budgeting app to help you get started.
2. Establish goals
Setting goals is an important part of a savings strategy, so you can plan ahead for what you’re saving for. These goals might be saving for college, moving out or going on a trip. Determine how much you need to save for each goal, and adjust your budget to account for it. (Opening a CD can be helpful when saving for long-term goals.)
3. Set up a checking and savings account
It’s important to have separate accounts for spending and for saving, so you don’t lose track of what money should be left untouched. Plus, with a savings account, you can take advantage of some higher yields and get rewarded for keeping money stashed away. Try to avoid accounts with high fees.
4. Automate savings
There are many banks and apps that come with automatic saving features. Once you have a checking and savings account, set up automatic transfers of a certain amount into the savings account at regular intervals, or download a money saving app that automates savings.
5. Get a credit card
Many credit cards have age and income restrictions, but there are some credit cards designed for students. Using a credit card and paying it back on time can have significant financial advantages in the long run by establishing a good credit history. Your credit history will factor into things like renting an apartment or taking out a student loan.
6. Set aside an emergency fund
Having an emergency savings fund is essential for preparing for sudden, unexpected events, like losing a job or paying for a medical bill. It should only be used for covering living expenses in an emergency. Aim to have at least $500 to $1,000 set aside for an emergency fund while in high school, and continue to build this fund up as you take on more day-to-day living expenses over time.
7. Make use of student discounts
High school students can get lots of discounts on items with their student IDs, usually around 10 or 15 percent off. Nike, Urban Outfitters, Apple and Adobe are just a few brands that offer discounts to high school students.
8. Get a summer job
During the school year, you’ll likely want to keep work hours limited to focus on school. Summer is a good time to take on a job with more hours and make some extra cash, which you can put toward savings.
9. Shop secondhand
Try checking out a local thrift store or an online secondhand store, like Depop, for clothing at a discounted price. Also consider getting used textbooks instead of buying new ones, since you can often find them for much cheaper this way.
10. Avoid impulse purchases
A bad habit to dodge is impulse buying. It can lead to a drained bank account and regret. Try to curb your impulse to buy something that’s nonessential by writing it down and seeing if you still want it after a week or two. If not, that money could go toward savings or something more essential.
Best banks and credit unions for high school students
Some banks and credit unions offer accounts that are designed for high school students. The accounts may come with lower fees, bonuses and special savings features.
- Alliant Credit Union: Teens aged between 13 and 17 can open a teen checking account with Alliant Credit Union that comes with no monthly fees and a high interest rate of 0.25 percent. The account provides joint ownership between the teen and a parent. Additionally, eligible members of the credit union can be entered into a drawing to win a $2,000 scholarship.
- Axos Bank: Axos Bank’s First Checking account is a joint account for teens and their parents. There are no monthly fees or overdraft fees. The account can help teens limit their spending with a daily transaction limit of $500 for debit and $100 for cash withdrawals. It also earns 0.10 percent in interest on all balances.
- Capital One: Capital One’s MONEY teen checking account comes with no monthly fees or minimum balance requirements. While it’s managed by the teen, parents can also keep track of their kid’s account and lock or unlock the account’s debit card. It also allows parents to add rewards for when their kid achieves a savings goal. Plus, the account earns 0.10 percent interest.
- Chase Bank: High school students can open a Chase High School Checking account that comes with no monthly costs. Those with the account also get the monthly fee waived on a Chase Savings account. The High School Checking account comes with Autosave, to help students build their savings, and parents can keep track of the account’s activity.
- USAA Federal Savings Bank: USAA offers a youth checking account. It requires $25 to open, but there are no monthly fees on the account. While teens have limited access to the account, parents can also set controls such as debit card spending limits. USAA accounts are limited to military members and their families.
High school years offer a great opportunity to begin saving, as students start earning income from employment but are not yet financially burdened by many of the responsibilities that come with adulthood. High school students can establish goals to encourage their savings, such as getting a car, going on a trip or paying for college.
Having a savings account is essential to developing financial literacy and building savings. Try creating a budget and factoring in regular contributions to the savings account, aiming to have an amount set aside for an emergency fund. Also, consider using a personal finance app, such as a budgeting or money saving app, to help make money management a little easier.