Money management may not seem very exciting at first, but once you realize how hard you work to earn money, you will start to see how important it is to manage it well.

Learning how to budget and understanding personal finance early on helps build good habits. These habits can help you keep more of your money and be ready for future responsibilities. As you gain more independence—whether you go to college or move out of your parents’ house—it’s important to know how to manage your money and create a simple budget.

Some high schools do offer classes in personal finance or accounting, but they are often optional. If your school offers these classes, it’s a good idea to take them. They can give you a strong start in understanding money.

To help you get started, here are some simple and useful money skills and budgeting tips that every teen should know.

Important Money Skills for Teens

There is a lot of information available to help you understand the basics of money. Many teens may have heard terms like “interest rate,” “credit card,” or “savings account” before, but they might not really know what they mean. Taking time to learn what these words mean and how they affect your finances will put you ahead of others your age.

Whenever you hear a financial term you don’t understand, take a moment to search for it online. Many of these terms are easier to understand than you might think, and a little research goes a long way.

Here are some important financial basics to get you started:

Make Saving a Regular Habit

No matter how much money you’re making, it’s a good idea to get into the habit of saving. Ideally, saving should become something you do automatically.

Whether you earn money from a part-time job or get an allowance or gift money, set aside a part of it for savings. That includes birthday or holiday money. While it might be fun to spend it right away, you’ll be glad later when you have money saved for something bigger.

A great way to make sure you save is to do it as soon as you receive any money. Take a small percentage—like 10% or 20%—and put it aside right away.

If you don’t have one yet, think about opening a savings account. Many banks offer savings accounts with no fees and low minimum deposits. On top of that, most savings accounts will actually pay you a small amount of interest just for keeping your money there. That means the bank pays you to save!

Saving might not seem very exciting now, but think about this: would you rather spend $30 at the mall today or help pay for your first car in a few years? Saving is all about being patient and planning ahead.

If you make saving a habit while you’re young, you’ll be more financially secure later. You’ll be more prepared to handle things like student loans and credit card bills without getting overwhelmed.

Understand the Importance of Budgeting

Learning how to budget while you’re still a teen will help prepare you for adult life. Everyone needs to know how to manage their money, and the sooner you start, the better off you’ll be.

Budgeting is all about comparing how much money you earn with how much you spend. One of the first things to do is write down everything you spend money on in a typical month, and then compare it to how much money you bring in.

If you’re spending more than you earn, that’s a problem. Try to cut back on your spending so you’re always spending less than what you earn.

Breaking your spending into categories can make budgeting easier. For example, if you make $500 every two weeks from a part-time job, aim to spend less than $500 each month. You could set aside $100 for savings, and then divide the rest for things like clothes, hobbies, or food.

The more detailed your budget is, the better it will work. There are many apps available that can help you build and manage your budget. While writing your budget on paper works, using a budgeting app on your phone can make it easier to stay organized and check in often.

Learn to Spend Less

One easy trick that works for both teens and adults is to pause before buying something you didn’t plan for. These kinds of quick, unplanned purchases—also known as impulse buys—can really mess up your budget.

If you see something you want but hadn’t planned to buy it, wait 24 hours. If you still really want it, check your budget. See if there’s a way to move money from one spending category to another so you can afford it without going over budget.