How to start investing for teens

Teens 13–17 · How-to · Updated October 1, 2026 · LearnLife Editorial

What do you need before starting to invest as a teen?

Before you start investing, you need a few key things to set yourself up for success. First, you need a basic understanding of investing terms like stocks, bonds, index funds, and diversification. You can learn these from websites, videos, or books aimed at teens. Second, you need some money set aside that you won’t need for daily expenses—this can come from allowances, gifts, or earnings from a part-time job. For example, if you earn $50 a month from babysitting, you might decide to save $10 monthly to invest.

Third, because minors (under age 18) cannot open most investment accounts alone, you will need a parent or guardian to open a custodial or joint account on your behalf. This adult will manage the account legally until you reach the age of majority, usually 18 or 21 depending on your state. Finally, it helps to set a clear goal for why you want to invest—whether it’s saving for college, a first car, or future independence. Having a goal keeps you motivated and focused.

How do you start investing step-by-step?

Starting to invest can feel overwhelming, but breaking it into clear steps makes it manageable:

1. Learn the basics of investing Start by understanding key concepts. For example, stocks are shares of companies, bonds are loans to companies or governments, and index funds are collections of many stocks that track the market. Use simple language resources or apps for teens. Why? Knowing what you’re investing in helps avoid mistakes.

1. Save money to invest Set aside money regularly from your income or gifts. For example, save $5–$20 each week or month depending on what you can afford. Why? You need actual funds to buy investments.

1. Talk with a parent or guardian Explain your interest and ask them to help open a custodial or joint account with a brokerage that allows teen investing. Why? Legally, minors can’t open accounts alone.

1. Choose a brokerage or investing app Look for apps with low fees, educational tools, and options for fractional shares. Examples include platforms designed for beginner investors that parents can help set up. Why? You want a safe and affordable way to invest.

1. Pick your investments Focus on simple, low-risk options like index funds or fractional shares of established companies. For example, buying a fractional share of a popular company instead of a whole share that costs hundreds of dollars. Why? This spreads risk and keeps things manageable.

1. Make your first investment Use the app to purchase your chosen stocks or funds. Start small, so you can learn without risking too much money. Why? Taking action builds your portfolio and confidence.

1. Track your investments regularly Check your account once a month to see how your investments are performing. Note changes but avoid reacting to daily ups and downs. Why? Regular review helps you understand market behavior and progress.

1. Keep learning and adjust your strategy Read about investing, ask questions, and if your investments aren’t performing well, consider diversifying or changing what you invest in. Why? Investing is a skill built over time.

How do you start investing in stocks as a teen online?

Investing in stocks online as a teen requires following legal steps and choosing the right platforms. First, your parent or guardian helps you open a custodial investment account at an online brokerage that supports minors. Popular brokerages offering custodial accounts include firms with no or low fees and educational resources targeted at beginners.

Once the account is set up, use the platform’s tools to research stocks. Many brokerages offer fractional shares, which let you buy part of a share if you don’t have enough money to buy a full one. For example, if one share costs $500 but you have only $50, you can buy 0.1 share. This makes investing accessible even with a small budget.

Place buy orders through the website or app by selecting the stock ticker symbol and entering the number of shares or fractional shares you want to buy. Confirm the order and wait for the transaction to complete. Over time, monitor your portfolio monthly, learning how prices fluctuate and how dividends (if any) add to your returns.

How can you tell if your investing efforts are working?

To see if your investing is working, set clear, measurable goals upfront. For example, your goal might be to grow your initial $200 investment to $300 in two years or save $1,000 for college funds. Tracking your portfolio value monthly helps you observe progress.

Look for steady growth over months and years rather than expecting quick profits. For example, if your investment increases by 3% in one month, that’s normal growth—don’t expect huge spikes quickly. Receiving dividend payments or reinvesting dividends is also a positive sign.

If your portfolio value decreases temporarily, remember that markets fluctuate. Use this as an opportunity to learn why prices changed. Keep a journal or spreadsheet to record your investments, purchases, and portfolio value over time. This helps you see the big picture beyond daily changes.

What should you do if your investments go wrong?

If your investments lose value or don’t perform as expected, don’t panic. First, check if the loss is due to short-term market swings or something specific to your investment choice. For example, if a company you invested in has bad news, its stock price might drop. If the entire market is down, your index funds will feel that too.

Steps to handle this include:

• Review your investment choices: Is your money too focused on one stock or sector? Diversify by adding different types of investments.
• Avoid impulsive selling: Selling when prices drop can lock in losses. Instead, consider holding long-term.
• Ask for advice: Talk to your parent, teacher, or a trusted adult who understands investing.
• Keep learning: Use mistakes to improve your knowledge and decisions.
• Continue saving and investing regularly: Dollar-cost averaging—investing a fixed amount over time—can reduce risk.

Remember, losing money is part of investing, especially at first. The key is to stay calm and keep practicing smart habits.

How can investing be adapted specifically for teens?

Since teens usually have limited money and cannot open accounts alone, investing must be adapted to fit these realities. Custodial accounts let adults hold investments for teens, giving teens control as they get older. Many brokerages now offer apps or platforms designed to educate teens through easy interfaces and lessons alongside investing.

Start with small amounts—say $10 or $20 a month—to build experience and confidence without risking important savings. Focus on index funds or ETFs that hold many stocks, reducing the chance of losing money on a single company. Teens should set short- and long-term goals like saving for college or a car while learning patience and discipline.

Educational resources designed for teens include interactive lessons, quizzes, and simulated investing games. These tools help you practice decisions without using real money initially. By adapting investing to your age and resources, you build a strong base for future financial independence.

What beginner tips help teens succeed in investing?

Here are practical tips tailored for teens starting out:

• Start with clear goals: For example, “I want to save $500 for college books in two years.”
• Choose low-cost, diversified investments: Index funds or ETFs spread your money across many companies, lowering risk.
• Use fractional shares: Buy smaller pieces of expensive stocks to diversify with little money.
• Invest regularly: Even $5 per week adds up over time.
• Don’t chase “hot tips”: Avoid risky stocks based on hype; stick with steady, proven investments.
• Be patient: Wealth builds gradually, not overnight.
• Keep emotions in check: Ignore daily market noise and focus on long-term trends.
• Ask questions: Talk with parents, teachers, or financial mentors whenever unsure.
• Practice with simulators: Online stock market games help you learn without real money.

Following these tips creates solid habits that will help you grow your money wisely.

Frequently asked questions

Can teens invest on their own without a parent?

No, teens under 18 generally cannot open investment accounts alone. A parent or guardian must open a custodial or joint account and manage it until the teen reaches adulthood.

What is a custodial account?

A custodial account is an investment account managed by an adult for a minor’s benefit. The adult controls the account until the minor becomes an adult, but the investments belong to the teen.

How much money do I need to start investing as a teen?

You can start investing with very small amounts, sometimes as little as $5 or $10, especially if the brokerage offers fractional shares. Start with what you can afford without needing it in the short term.

What are fractional shares and why are they good for teens?

Fractional shares let you buy a portion of a stock, making it easier to invest in expensive companies and diversify your portfolio without large amounts of money.

How often should I check my investments?

Checking once a month is usually best. This helps you track progress without getting stressed by daily price changes.

What if I lose money investing?

Losing money sometimes is normal. Use losses as learning moments, diversify your investments, and keep investing steadily over time to build wealth.