There are lots of ways that teenagers can get rich -- it's almost guaranteed, in fact. Since they're so young, they can take advantage of the powers of time and compounding and can turn small sums into large ones -- eventually. But that entails a lot of waiting.
Another, more active way for teens to focus on future wealth (not to mention helping them have cash on hand for present-day expenditures) involves saving. Employing just a few simple tricks, teenagers (not to mention adults) can easily find themselves with more money in their pockets.
I have a bunch of great saving tips that were shared with me by teenagers. But before I do that, permit me to solicit even more advice from teenagers. In conjunction with our 2002 book (check it out on Amazon or at your local bookstore), The Motley Fool Investment Guide for Teens: 8 Steps to Having More Money Than Your Parents Ever Dreamed Of, The Motley Fool is running a contest, with this year's deadline just a few weeks away, on Feb. 29. Here's the scoop.
If you know any teenagers, I invite you to forward this article to them, or at least tell them about our contest. (You can forward this or any Fool article by clicking the "Email this page" link in the box in the upper right.)
Tips from teens on saving
Here are some suggestions on how to successfully get into the saving habit, from a bunch of teens and a few folks fresh out of teenhood.
Ben Sheppard, 18: Don't carry any cash, if possible.
Clayton Smalley, 16: I used to be weak when it came to money. I couldn't go into a store without buying something. I'm glad I'm not that person now. I taught myself discipline by keeping a $20 bill in my pocket, walking around the mall all day and not buying anything. Now I don't have any urge to buy stuff when I go into a store. It worked for me.
Tacy Holliday, 19: When you buy something, only use bills. If you buy a magazine for $3.25 and you pay for it with a $5 bill, you'll get back $1.75 in change. Put the dollar back into your purse (or pocket) and keep the 75 cents separate. Only spend the bills, not the coins. Put all the coins in a jar for savings. That way you'll always be saving a little.
Daniel Carroll, 16: I have a little bank that I put spare change and bills into. Whenever I have a significant amount in there, I'll invest it or put it in the bank. It's important to keep a routine. Every time I get money, I put some away.
Donald Hoang, 14: I deposit my money into a bank instead of my wallet, so the money is not there. And I have to take an extra step to get to it.
Jason Hart, 18: Take only what you really need for spending and put the rest of it somewhere that's difficult to get to, such as long-term CDs or money market accounts. Making it inconvenient to get to your money might help you avoid the urge to spend it all. Also, decide exactly what percentage you will spend and what you will save, and follow your own rules.
Robert Morgan III, 17: Carry very little money at all times. You can't spend money if you don't have it. A candy bar would be nice, but without a dollar, you can't get it. Little things like that really add up quickly. I like to see the number of shares of stock I own going up, too. That's a great motivator.
Deborah Sperling, 14: When considering a major purchase, wait a week or so, at minimum. This will help you make sure you still want the item, and, as an added bonus, the price might go down.
Adam Kaufman, 15: Start with small amounts. When I first started saving to invest, I was saving $1 to $2 each day, so by the end of the month, I had $30 to $60, depending on what kind of month it was.
Jason Ramage, 20: I take advantage of automatic withdrawal from my bank account into my investment account, so that I'm always investing, and I'm forced to make do with a slightly tighter budget.
More resources for teens (and adults)
You can also help teens get a financial head start in life by pointing them to some other helpful resources. Here are a few, starting with a book and a nook:
- Our book, The Motley Fool Investment Guide for Teens.
- Our online nook for teens, Teens and Their Money. It's chock-full of information and advice on saving, earning, spending, and investing money, from both Fool staffers and fellow teenagers.
Teens and Their Money discussion board.
- An article from last year, which offers some eye-opening excerpts from our book.
- Our Savings Center, with advice (geared mainly to adults) on how to sock away money you may need in the next few years. It also offers some special interest rates for Fools.
One of the best gifts that the teens you know may receive in their lives might be a nudge toward financial independence. If they don't thank you now, they'll surely do so some years down the road. Go ahead -- help make someone a millionaire!
Selena Maranjian is no longer a teenager and regrets that she didn't start investing until her 30s. At least she'll never have to take another gym class. For more about Selena, view her bio and her profile. The Motley Fool is Fools writing for Fools.