Savings Account?

Question

I am 14 years old and I have a job. I get payed between 40-150$ on each paycheck. How much of this money should I save and how much should I use for anything I want?

Answer 1

save it all

Answer 2

You may have your work cut out for you. A study by Wachovia and the Consumer Federation of America found that among all age groups, young adults ages 18 to 24 are the most likely to say they're not saving adequately (62% versus 52% for all Americans).

Save or invest automatically with a bank, a mutual fund or your retirement plan at work so that money is taken off the top of your paycheck before you see it or spend it. The surest way to save is to have someone else do it for you; no matter how much you make, you'll tend to spend it all.

Deposit your paycheck directly to savings rather than to your checking account. You can transfer money to pay your bills, but psychologically it's tougher to withdraw money from savings.

Limit yourself to one ATM withdrawal per week, and make your cash last.

Subtract credit-card purchases from your checking account immediately so you're not surprised when the bill arrives.

When you subtract a payment from your account, round up the amount to the next dollar. That way, you'll always have a slush fund.

Give yourself a 24-hour cooling-off period if you're waffling on a purchase. Chances are you won't go back.

Buy a couple of storage bins -- even a shoebox will do -- in which you can collect credit-card and ATM receipts. That will help you get organized, and give you a visual record of your spending.

Toss spare change (and even stray singles) into a jar on your desk or dresser, and watch your money grow to hundreds of dollars a year.

Each time you resist the temptation to buy a latte or go to a movie, put the money you would have spent into your cash jar. It's an immediate reward for self-discipline.

Once you finish paying off a loan or a credit-card balance, continue depositing the payment amount in a savings or investment account.

Answer 3

Set aside a certain percentage for saving, a certain percentage for savings, a certain percentage for investing, a certain percentage for charity, a certain percentage for expenses, a certain percentage that you'll blow every month on something that you want to do, and a certain percentage to save towards something that you want to possess that you can't afford right now. (From "Secrets of the Millionaire Mind" by T. Harv Eker, a great book that you'll enjoy reading.) This will probably mean you'll have multiple bank accounts that you'll transfer money between; if so, then so be it. Thinking strategically like this is a great habit to get into at your age.

Answer 4

hello -

good for you!  a nice paying job at 14 is terrific.  Ask your parents to open a savings account for you and deposit 20% of each paycheck automatically.  Since you dont have any other expenses, buy what you want with the rest and if there is anything left over when you get your next paycheck, deposit that into the account as well.

This will help you start saving for the rest of your life, which is terrific.  It will also allow you to realize you don't have to spend whatever you earn, which is great to learn young.  

Feel free to reach out to me if you like, I work with people teaching them about money and how to think about it (i am not a financial advisor, just someone who is organized, a good teacher and good with money).

Good luck!