It may sound unlikely, but teenagers appear to be stepping in to help.
As the U.S. works to recover from a turbulent period brought on by the pandemic, employers who’ve struggled to staff their businesses are finding that teens are taking those roles. Many of these positions are concentrated in retail and hospitality.
There are numerous explanations for why shops, restaurants and bars have found it hard to recruit staff — some based on data, others rooted in speculation or politics. Whatever the cause, businesses that reopened quickly and in large numbers are scrambling to hire. Some are offering sign-on bonuses and boosted pay. In some cases teens can earn as much as $17 an hour plus extra signing incentives.
To make this brighter news even better, some employers are lowering the minimum hiring age.
For instance, certain water parks now accept applicants as young as 15, creating opportunities for those who might previously have had to wait a few birthdays. Some even streamline applications, allowing teens to apply using their smartphones.
4-Point Plan to Help Your Teen Save
As your teen starts bringing in paychecks, it’s a great moment to discuss what they’ll do with the additional income. Sure, some can go toward entertainment, but it’s wise to set aside a portion for larger costs like a car, college tuition or even retirement. With a little guidance, they can establish healthy financial habits early on.
Below are some strategies for helping teens save money.
1. Work Through Short- and Long-Term Objectives
If you haven’t yet talked to your teen about budgeting and saving, now’s the time. With a larger paycheck, your teen may be tempted to blow it all or feel uncertain about what to do with the surplus.
Begin by explaining the difference between short-term, intermediate and long-term goals. Have them think through what matters most to them and prioritize saving and spending accordingly.
For example, if your teen wants to buy a car, have them research vehicle prices, insurance and monthly fuel costs. Discuss priorities and how much needs to be set aside monthly (to avoid piling on debt from high car payments).
Retirement might feel distant, but college is a near-term reality for many teens — this is a natural opportunity to discuss long-term planning and the funds required to reach those goals.
After helping them outline their objectives, you can explore financial products and tools that support those aims. That way you’ve laid the groundwork by showing them how to form practical money habits tailored to their needs.
2. Don’t Let Them Open Just Any Bank Account
Opening a checking or savings account is sensible (they’ll need somewhere to deposit pay), but grabbing an account at the nearest bank may not be ideal. There are many options that allow teens to earn meaningful interest.
Talk to them about the benefits of earning interest and how much difference parking cash in a high-yield savings account can make. Compare prospective earnings so they can see how much extra they could generate by choosing a better account.
For example, a traditional brick-and-mortar bank might pay a paltry 0.05%, while an online bank such as Varo could offer significantly higher rates. Plus, many online accounts have no monthly fees or minimum balance requirements.
Read up on Varo bank options and evaluate them together. Monthly bank promotions might earn your teen even more if they open an account with one of several recommended banks.
3. Let Them Pick Their Own Stocks
Investing can be engaging — although it’s also true that long-term wealth building can seem slow. To motivate your teen, show them how investing today can turn a modest paycheck into a much larger sum over time.
Introduce them to compound growth and demonstrate what it can do for their money; it often surprises young savers.
To make investing more appealing, have them choose individual stocks—specifically fractional shares, which are more affordable and let them diversify. Opening a joint account or guardian-linked account with platforms like Stockpile gives teens the chance to watch their fractional shares grow.
Stockpile also offers ETFs, which help diversify holdings. There are Roth IRA options and other brokerage choices for teens who want expanded possibilities. Walk them through diversification and why spreading investments across assets can protect against losing everything to a single stock’s decline.
4. Emphasize the Power of Automation
Who doesn’t appreciate when something helpful happens automatically? That’s where finance apps shine.
If your teen struggles to save even a little, show them how apps like Chime and Qapital can help set goals and automate saving.
Qapital is engaging because it lets you set savings goals tied to behaviors — for instance, transferring a few dollars to savings every time your teen walks to work.
Chime offers round-ups: each purchase is rounded up and the spare change is moved to a savings account.
Teaching your teen to save is straightforward (and could even be fun) if you build the right foundation. Keep goals tangible, relevant, and give them the freedom to pick their own saving methods. You’ll both be pleasantly surprised by how much can accumulate in their accounts.
Contributor Mark Evans is a personal finance writer based in Jacksonville, Florida, focusing on real estate, insurance, banking, loans and credit. He hosts the Buzzsprout and Beyond the Dollar podcasts.
