Teaching Teens to Save

By Brian Page, Educator and Teacher Advisory Chair, Council for Economic Education, @FinEdChat

Saving equals security and opportunity for your future self.

Living well below your means now in order to afford to live well in your future is easier to maintain if it is the only lifestyle choice you have ever experienced. Consider nudging teens to begin this habit of saving early in their lives using these three strategies:

Strategy #1: Nobody likes a lecture; teach teens through experiences.
I’ve taught personal finance for over a decade. My experience, research, and the responses my students provide on my student surveys coalesce into one clear truism: students love experiential learning. Field trips and simulations such as Budget Challenge, currently being offered free of charge, are examples of hands on learning at its best. Budget Challenge is a 9-week interactive simulation where students assume the role of recent college graduates with a job, a regular paycheck, a checking account, and, most importantly, a 401(k). Students use their income and assets to pay bills, manage expenses, save money, invest for retirement, pay taxes, and more. Students compete against one another and are primarily awarded points by avoiding banking fees and saving money.

Strategy #2: Take advantage of free money and tax deductions with retirement products.
An employer matching contribution to your retirement account is like free money. If you do not contribute, you'll forfeit the employer match. An employer match generates far higher returns and faster compounding of retirement savings. Before you begin investing, start with the end in mind and use the Ballpark E$timate tool to understand how much retirement savings you need. There are various types of investment products with broad ranging tax benefits, most of which allow for investment earnings to grow without being taxed. To know the type of tax sheltered retirement product in your best interest, consider turning to financial experts bound to the fiduciary standard, obligating them to put their clients’ best interest first. And start young and establish a diversified portfolio to take full advantage of compounding returns.

Strategy #3: Make savings and investing automatic.
Decisions on what to eat need to be made at each meal and leave many opportunities for good and bad choices. However, there are some decisions in personal finance that are compound decisions, repeating over and over again, like investing for retirement or saving for goals and emergencies. An evidence-based strategy is to split paycheck deposits into checking, a retirement-specific, and a savings-specific account. Use a checking account as the only funds available for day-to-day spending, so saving and investing into separate accounts isn’t an afterthought. 

Take the Pledge

I pledge to save money, reduce debt, and build wealth over time. I will encourage my family and friends to do the same

Take the America Saves Pledge

Tip of the Day

  • Written by Katie Bryan | November 18, 2013

    Save for #presents rather than relying on #credit http://ow.ly/pV4nN

Saver Stories View all »

Another Dream Realized

Written by Tammy G. Bruzon | November 7, 2014

Mary Brown was already a disciplined individual when she came to Wisconsin Saves coordinator Wisconsin Women’s Business Initiative Corporation (WWBIC) in last summer. She had successfully completed her bachelor’s degree with the assistance of her husband and son, and was now ready to tackle her next big dream – homeownership.

Read more...

Developing a Savings "Game Plan"

Written by Katie Bryan | October 28, 2013

Eunice Diaz, a teacher in Colorado Springs, had been noticing a pattern. Despite the fact that she and her husband were “making good money,” they were spending their entire earnings and “were still struggling at the end of the month.”

Read more...

Challenging Herself to Save

Written by Sara Cooper | April 15, 2014

It all started when Marchale Burton overheard Alabama cooperative extension colleague Isaac Chappelle, coordinator of Alabama Saves, explaining how saving just a little bit – even change – is all it takes to become a saver. “I thought about that,” Burton said, “and wanted to see if it would work.” So, she challenged herself to see how much change she could save.

Read more...

Receive Updates

Sign up for Texts

Written by Tammy G. Bruzon | July 15, 2014

Sign Up

Sign up for Emails

Written by Super User | September 16, 2013

Get Emails

Take the Pledge

Written by Super User | September 16, 2013

Start Saving