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    What should I do with an extra $480/year as a teenager?

    Hi, I’m a teenager and my parents give me $20/week. I don’t spend much, so I can save or invest about half of it (~$10/week = ~$480/year).

    In our financial literacy class, they tell us to open a savings account and deposit around $40/month. The idea is that by retirement (~60), it could grow to over $1M with compound interest.

    But I have a few concerns:

    I don’t want to wait until 60—I’d like to reach financial independence much earlier (around 30–40).

    I’m more interested in building my own business rather than working a typical 9–5 job.

    I probably only have 2–3 years of this steady income before I need to rely on my own money, so I’d like to build some starting capital.

    So I’m wondering:

    What would be the smartest way to use this money at my age? Should I still save it, invest it, or try something else (like small business ideas, flipping items, etc.)?

    Any advice or ideas would be appreciated.

    What should I do with an extra $480/year as a teenager?
    byu/Ok_Department_4019 inpersonalfinance



    Posted by Ok_Department_4019

    6 Comments

    2. josh_josh_josh_ on

      If you want to retire by 30 then you either need to make a ton of money or learn how investing works.

      Start investing!

    3. Rapom613 on

      Ask your parents to open you a Roth IRA and deposit the money into that. It grows tax free and can be invested into ETFs to take advantage of market appreciation.

      That way you will get the approx 10% return the s&p 500 is good for long term, as opposed to 1.5% 10 year average in a high yield savings account. Plus when you draw it out of a Roth IRA, you do not pay taxes on any gains

    4. jelloslug on

      Long term index funds are the current best balance between returns and risk. It’s not going to make you tiktok worthy gains but the vast majority of things that people hype don’t either.

    5. curveball21 on

      Spend that money and enjoy this time in your life. You’ve got the right mindset, but start thinking of money as opportunity. When you have adult money you have the ability to save plenty. Right now you have an opportunity to do things you will remember fondly forever, so spend this bounty. Thank me later.

    6. dlm2137 on

      You’re a teenager — you should not worry and go spend it on partying with your friends.

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