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What are some things I should save up for as 16 year old?

I'm going to start working and need to know what to save up on.
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SAVINGS

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Kim’s Answer

Steven,


Congrats! and welcome to the working world! It is good that you want to save! I recommend having multiple savings accounts. Each should be for something special. So, you might have one to save for a car (at least the down payment), you might have one to save for school, etc. It's actually not too early to be saving towards other adult expenses, including wedding, honeymoon, buying a home, etc! This includes retirement!


I suggest you start researching on-line, to get the hang of savings. The banks and credit unions have various fees, and you don't want to see them taking your money because, for example, your balance is below $1500. Ask about the fees. Compare. Credit unions tend to be better.


There is a term called "pay yourself first." That is, if you automatically take 15% or so off the top of your check and set it aside, it gets easier and easier to do. You could have your entire paycheck sent to the bank (direct deposit) and then have the bank automatically transfer $xx.oo to savings. I also recommend that you track your every expenditure. I have started doing this since retiring, as money is tight and seems to just disappear! I do it on a spreadsheet, and break it down into many different categories.


Another thing to save for is what is called an "emergency fund." The financial experts recommend that you have an account that will allow you to be able to pay 3-6 months of your living expenses. So, if you save up say, $5000 (over time!) and your car needs $2500 worth of repairs, the idea is that you would pay it out of that emergency fund, and then work on paying it back. This way, you are not putting it on a credit card and paying interest to somebody else!


I know I went off subject - I hope you find the additional info helpful. Money management is crucial to know, and it is not taught sufficiently in most schools!


Best of luck!

Kim

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Sara’s Answer

That is great that you are thinking about this! Set goals for yourself and start small to work towards them. Maybe you want a game or bike, understand how much you earn with each paycheck and determine how much you would need to save from each in order to meet your savings goal by X date. Do you have a car or want to drive? If so then for this I would start savings goals for the vehicle, for insurance and for gas/maintenance.
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Allie’s Answer

Hi Steven! Starting saving habits early is very important! As a 16 year old you don't need to have a big savings plan, but it's great to have a goal you can work towards. Maybe start small, and save for a piece of clothing or new game you really want. You might be driving soon, so you could also start saving towards a car. Hope this helped!

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