Your Future Paycheck: Money Smarts For Teens

1. We all have to make choices about our lives. A good life comes, in part, from making good choices. Money can make life better by getting rid of worry. But it doesn’t give us time or happiness or a passion for what we are doing. The choices you make today can change your future.

2. Take control of your life by setting some goals and making a plan. Short-term goals include going to school every day and doing your best. Completing your education and choosing a career are long-term goals.

3. Keep track of what you spend. You are the target of millions of dollars of advertising. Companies want you to think you have to buy their clothing, shoes, soft drinks, whatever. But you are in control. And did you know that you are paying for those ads? A part of what you spend goes to pay for advertising.

4. Everyone needs to know about compound interest. The longer you have money in some type of investment or savings account that earns interest, the more it will grow. 6% interest means that if you invest $50 today, in 7 years it will be worth $80, in 12 years it will be worth $107. In 20 years, $170. 

5. Education and experience will let you earn a better income, and to get a job with better benefits. You should know that there are jobs that pay well and have great benefits.

6. Prepare for the job application and the interview.

  • Dress like you are serious about getting the job.
  • Tell the truth.
  • Bring your own pen.
  • Know your Social Security number.
  • Find out something about the company or business before you go. Have a list of questions about the job ready in your mind. Practice the interview with a friend or relative. What if the interviewer asks you what your strengths and weaknesses are – do you have an answer ready?
  • Be polite. Say thank you at the end.
Did you know that you can do informational interviews with people who work in jobs that you think are interesting?


7. Your credit history is very important. Credit card companies charge huge interest rates. If you just pay the minimum balance, you may end up paying twice the price of everything you bought with your credit card. Your credit history is very important when you try to buy a car or a house. Bouncing checks will also hurt your credit history, so be careful. There are nonprofit agencies that can help you get out of debt, but it’s easier to not get into debt in the first place – SO, pay your bills on time & choose a credit card that won’t rip you off.

8. A bank is a smart place to keep your money. If you have a job, ask your employer if they have a deal with a nearby bank for a low-cost checking account. Some even have no-fee accounts for students. Once you have a little more money, learn about other places to keep your money that will pay higher interest.

9. Take care of yourself – your money, health, education, diet, everything. You are your best investment.


Places to Put Your Money

1. Checking or Savings Accounts – You can open a checking and/or savings account at your local bank or credit union. You can have your paycheck automatically deposited into your bank account. A savings or checking account may pay less than 1% interest these days – not even keeping up with inflation.

2. Savings Bonds – Savings bonds are backed by the US Government and are very safe. You can buy them at a bank or credit union. I Bonds are savings bonds that are indexed to inflation – so as the inflation rate goes up or down, so does the I Bond interest rate. Today, I Bonds are paying  1.48% through April 30, 2015.

3. Certificates of Deposit – You can get CDs at a bank or credit union. The amount of interest a CD pays depends in part on how long you can leave your money there. Current rates for high-paying CDs range from 1.0% to 1.54%% for a 1-year CD and from 1.3% t0 1.98% for a 2-year CD.

4. Mutual Funds – There are thousands of different mutual funds available. You can invest your savings in a mutual fund, or you may have to choose one to invest your 401(k) money in at work. Mutual funds can be invested in stock market, bonds or both. Mutual funds invested in stocks have had the highest return over the past 30 years – higher than savings bonds, savings accounts or CDs, but they also carry more risk. You don’t have to have a lot of money to invest in mutual funds.

5. Pension Plan – Some employers provide a pension plan, which can be a very important and valuable benefit. If you start your own business, it is a very good idea to include a pension plan for yourself in your business plan.


Things that Affect Your Money

1. Inflation – The cost things keeps going up. Sometimes it goes up a lot in one year and sometimes just a little. This is called the inflation rate. If you keep all of your savings in a shoebox, in 20 years you will not be able to buy as much with it. This is why it is so important to invest your money.

2. Risk – The chance that you may lose or gain money in a certain investment. For example, an investment in the stock market can (and does) gain or lose money.


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