Financial Advice

Tips for Teens to Maximize their First Paychecks

Getting that very first job is a rite of passage, and a major financial milestone for teenagers. Consider these recommendations to keep your teens on track once they start earning their own money at their first jobs.

Published Jun 4, 2019 | Updated May 8, 2024
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Getting that very first job is a rite of passage, and a major financial milestone. For the first time, these young adults will have their very own money, and they’ll need to begin to make choices about what to buy, whether it’s clothes, food, or even larger purchases like devices, weekend trips, or their first car. Of course, there are a few ways they can make the most of the money they earn and learn how to use it responsibly. Here are our recommendations to keep your teen on track once they start earning their own money.

Understand Wants vs Needs

This is a concept that is difficult, even for many adults to grasp. Needs are among the basic things we require for survival. Wants are those things we especially desire, given trends, goals, and personal preferences. Have patience with your teen, and use language that might help them learn the difference between these two important concepts as they gain maturity. With a little practice, they can learn the difference and begin to practice the discipline that will help them make sound financial decisions as they grow older.

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Spend Some

Understand that your teenager will suddenly have access to more money than they have ever had before. That’s pretty exciting! After all, one of the reasons many teenagers start working is to have some autonomy, and working hard at a job is one of the best ways to do that. Be aware that they might be inclined to spend it all, and help them avoid that bad habit. Talk to them about their goals. Explain to them that they should certainly enjoy the fruits of their labor and spend some of their money, but not all of it. They should be saving, from that very first paycheck. As soon as they are ready, help them open a teen checking account or get them a debit card for minors that you can monitor as they come up to speed. 

Save Some for the Short Term

Teach your teenager to write down their short-term goals. This can motivate them to put their money aside and not blow it on a whim. When your goals are in front of you, it’s easier to stay disciplined. Short-term goals should be items that can be saved up for over a relatively short period of time, say a new electronic accessory or a new outfit. These might cost around $100, and would only require a few weeks of saving. These goals are different from long-term goals, like saving for a car. Short-term goals are useful because they teach the value of slightly delayed gratification without having to wait too long to achieve success.

Save Some for the Long Term

Long-term goals might include saving for their first car, saving for a big post-graduation vacation, or buying a nice computer to take to college. These are goals that parents can definitely help with, and they can serve as an excellent incentive to work hard and save.

Aim for Balance

Ultimately, it’s important for teenagers to work and learn the value of money.  It’s equally important to know how to handle the money that they do earn. Give them lessons that will help them. There might even be a money management for teens course offered in your area. With the right education, they can develop a balanced approach to spending and saving that will help them manage their money for years to come.