top of page
Search

A Teen’s Guide to Financial Literacy

  • Writer: teenceonews
    teenceonews
  • Nov 5
  • 4 min read

ree

Let’s be real, most of us aren’t taught how money actually works. Sure, we might hear terms like “credit,” “budget,” or “savings” tossed around, but what do they really mean for you as a teen? You may learn about this in your senior year economics class, but you shouldn’t have to wait 18 years of your life to become a personal finance expert. In fact, according to a study by The National Study of Millionaires, 88% of millionaires built their own wealth and started earning their money at a young age. At TeenCEO, we want to help you reach your business goals and understand how money works early on. Financial literacy is one of the most valuable skills you can develop, and the sooner you start, the better prepared you’ll be for the real world.


The Basics 

Let’s start with the basics. Before you can start managing money, you should know what a few key terms mean. (Note: This list is meant to create a basic understanding of the terms. For a more comprehensive understanding, we have linked a few resources below).

  • Income: Money you receive for working a job or performing a task

  • Spending: Paying money for a good or service

  • Goods: Physical objects that you can touch

  • Services: Things that people do for others

  • Money: What we use to buy goods and services. Money is also called currency or cash.

  • Savings: Money that you do not spend. You keep it in a bank to use later on.

  • Bank: The place that deals with money, they keep our money safe in bank accounts.

  • Bank Card: A plastic card given by the bank that lets you pay for things or withdraw (take out) money that you have in your bank account.

  • Wants: Things we would like to have but don’t really need in order to live.

  • Needs: Physical objects that you can touch. 

  • Budget: A plan used to help decide how much money you can/should spend on things over a period of time. 

Once you understand these basics, you’re already ahead of most people your age.


Learn to Budget 

As we talked about in the key terms, a budget is a plan used to help you decide where you want to spend your money while keeping a healthy financial position. There are many ways to decide this plan but many people go by the 50-30-20 idea as a rule of thumb. This essentially means you should spend 50% of your budget on your needs, 30% for wants, and 20% for savings. Managing your money will have more complexities but this is a great way to center how you want to spend your earnings or allowance. You don’t need fancy tools to do this, a notebook or budgeting app can work. Towards the end of the article, we’ve linked some apps you can use to develop your budgeting skills. 


Understand Credit Before You Use It

When first starting out with credit or credit cards, it can be easy to think it’s “free money”. Spoiler alert: it’s not. Credit is a tool, but like any other tool it can be easily abused. It can be extremely helpful or dangerous. But we’re here to avoid this danger. Credit is borrowing money with a promise to pay it back later, often with interest. Let’s say you only get paid on the 15th of the month but you need to buy food for $20 on the 2nd. The bank can lend you the $20 on the 2nd and ask you to pay back $22 on the 17th. This can benefit the bank, as it’s making more money, and you can purchase your good/service ahead of time. If you fail to meet the deadline, there can be consequences: you could owe more money and your credit score could decrease. A credit score is a three-digit number that predicts how likely you are to repay borrowed money on time. 


Resources To Look At

We know it's difficult to convey more than basics in a single article. Here are some other FREE resources you can look at to expand your financial literacy.


Free Courses:


Budgeting Apps:

Check out this YouTube video for a full review on these apps: https://youtu.be/EHdKYs6muks?si=_e6t5cii9_2GUeVA


Youtube Channels:


You’ve Got This

Financial literacy isn’t something you learn overnight. It is a lifelong skill that you will carry throughout adulthood. But starting now gives you a major advantage. Keep learning, ask questions, read blogs (like this one!), and don’t be afraid to ask others for help. If you have any specific questions, you can always contact TeenCEO at teenceonews@gmail.com. Let’s starting taking control of our financial future now!

 
 
 
bottom of page