When should I start saving? and how much? and how?

Question

I am 16 and right now all I have is an account. My freinds all work and put money into ther account weekly, but i am unemployed. Should i start saving now? and how much should i have already by this age? and is there one way to save that is better than another?

Answer 1

You should always be saving, just to be on the safe side. At 16, it is probably better for practicing good habits than anything. You probably won't have a huge amount to put aside, but once you are used to putting a little bit away it will be that much easier when you need to start doing it with your paychecks.

There's no rule of thumb in terms of how much you should have saved. Honestly if you are saving anything at this stage you are ahead of the curve and deserve a pat on the back.

The best way to save depends on what you want to do with those savings. Do you want to save up for a trip? A car? Or college? Or is it more like a nest-egg just in case you run into a unplanned-for expense?

At 16 you are young for this, but as an adult you should ideally have three kinds of savings:

-Long-term: Retirement savings (401K, IRA, etc.) These should be invested for the long term and you likely can't touch this money until you reach a certain age. You should invest moderately aggressively (meaning don't be afraid of risk), and become more conservative as you get older.

-Short-term: Fun money. So you can buy a new couch, take a trip, buy a new video game, whatever, and not go into credit card debt to do so. You can even use this to save up money for a down payment on a house, etc.

-Nest Egg: My dad calls this **** You money. Meaning that if one day you wake up and don't have a job, you can still survive. (i.e. even if you walk in and say to your boss **** You, you won't be destitute). This should always have six months of living expenses in it.

But again, you're a ways from that. Get into the habit of saving now and it'll make things much easier in the long run.

Answer 2

without a job, what can you save?  do your parents give you an allowance?  a good rule is to save 10 percent of everything you get. so if you get $40 a week, save $4.  it may not seem like much but it will add up over time.  you should try to get a summer job.  too late this year but next year will do.  other ways to make money are babysitting, petsitting or housesitting for neighbors.  some people advertise for this on craigslist.  another idea is to do yard work (mowing in the summer, raking in the fall, and snow shovelling in the winter).  good luck to you.

Answer 3

I love Suze Orman who can help you learn more about saving and becoming financially wealthy.  Check out her website below.  Good Luck!!