Though trying to save money as a teenager is hard enough nowadays, there are ways to make your money grow over the long term through small investments. Whilst you cannot invest in the stock market until you are 18 in the UK, there are alternatives such as the Junior ISA.
The Junior ISA can only be opened by a parent or legal guardian of a child from birth up to the age of 18 (anyone over 18 can open a regular ISA for themselves) yet once the child turns 16 they will be able to manage their account. The way it works is that by putting money into the account you are investing into specific shares and bonds. These will generate profits over time and anything you earn will be free from tax. You can decide to put in as little money as you like, as often as you like, or you could invest regularly with a set monthly amount. Though in the US, teenagers under 18 are legally allowed to trade and invest in the stock market as long as it is under their parent’s name, a Junior ISA is the safest form of investment allowed for under 18s in the UK.
If you are interested in trading stocks once you turn 18, it is best to learn the basics by researching, looking into companies, watching videos, and reading books about the stock market. Popular trading apps such as Trading 212 offer the chance to practise investment with a fictional £50,000 which is a great way to learn what to do and what not to do, and will show you how easily you could lose money as well as gain it – since the stock market can be unpredictable and has many risks associated with it.
There are many other stock simulator apps out there that allow similar chances to practice investing before you turn 18 and may decide to do it for real. So whether you decide to open a Junior ISA or learn more about the economy, it is best to be wise about how you can make the most of what you save and invest.