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What do you think is the best way to start your financial planning?

I'm in the 9th grade but I have a goal of trying to save for a car or to get my first apartment by the time I'm 20

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Saurabh’s Answer

Hi there!

Starting to save money when you're young is an awesome idea!

Focus on making a budget for things like food and fun. Since you're still young, don't stress too much about money, but it's great to start building smart spending habits.

When you get a summer job, save a little bit of it in a high-yield savings account. Set it up to take money out of your account every month and make it a bit tricky for you to withdraw from it.

Learn about financial planning and take lots of courses in high school and college that help you get ready for the future.
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Pam’s Answer

An easy approach to try when you're young is the "envelope" technique. Begin by setting a goal, such as the amount you'll need for a car (make sure it's achievable). After that, divide the total by the weeks you have to save up. Place the calculated amount in either a digital or physical envelope marked "car". The most crucial step is to not take out any money from that envelope until you've accomplished your goal. Best of luck!
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Gaurav’s Answer

Well, your question truly inspires hope that you will succeed. This is one area I didn't focus on when I was younger, but now I firmly believe that developing a habit of financial planning is essential.

Firstly, work diligently to improve your skills, as enhancing your abilities is the best form of financial planning and ensures a secure future career.

Secondly, create a spending spreadsheet. Record all your weekly expenses, then multiply that number by four to determine your monthly expenses. Next, identify which costs can be reduced, ideally not exceeding 15% of your total expenses. At the beginning of each month, place the saved amount in a secure deposit. Repeat this process for three months, and you'll find yourself becoming more financially conscious and able to manage your funds effectively.
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Gianni’s Answer

The easiest method to save money is to reduce your spending. Once you're employed, make sure to deposit at least half of your earnings into a savings account. From the remaining amount, take care of any expenses you might have. With what's left, you have several choices. If you're committed, you can invest a part of it in options like stocks, assets, or even starting your dream business, and use the rest to enjoy yourself! Always remember, finding a balance with money is crucial. Use it as a tool to help you achieve your goals. Spending some of it not only lets you live your life but also enhances your mental well-being! There's always an opportunity to earn more money, but remember to handle it responsibly! With time and discipline, you'll be able to see your goal getting closer.
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Thomas’s Answer

Hello Daniella,

As you're still young, it's important to focus on saving money, just like others have suggested. Keep track of your income and expenses in a way that works best for you. Gianni's advice about starting to invest is also valuable. By developing good habits now and investing a sensible part of your savings, you'll be in a great position for the future. Time plays a crucial role in investing, so make the most of it. There are plenty of excellent books and free online resources available to help you learn about safe investing!
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Daniel’s Answer

Hi Daniella!

The very first thing I would do is make yourself a monthly budget. There are many good apps/online tools you can find online. Many online tools can help you categorize certain expenses and they usually have graphics that can help you visualize your progress. You can also do it the old fashioned way on Excel.

After you set up a budget the next best thing you can do is sleep on it and really ask yourself if you need the item. I would encourage you to really think through what you will use the item for and for how long. Also, think about the big items in life you need to save for such as a house, possibly kids, retirement, etc. You are never to young to start saving for these big ticket purchases in life.

The last thing I would do is don't compare yourself to others. One of the most dangerous things is comparing yourself to people and thinking if they can have it so should I. Don't fall for that trap of "keeping up with the joneses" because comparing yourself to people and their things is not a good idea. It will only lead to misery and feeling like you are failure.

Hope some of the above provides insight
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Maddy’s Answer

Hi Daniella! It's great to hear you are already thinking of your financial goals at a young age. A few basic things to set yourself up for success:

1. Give yourself a budget. It's important to not to make a conscious effort to limit your spending if you want to save. Even if you aren't shopping all the time, sending a guardrail on the amount you spend each month will help you stay on track.
2. Get a job as soon as possible. If you can start working and making money in some capacity as soon as possible, that will help you save more before you are 20. Even something small as babysitting once in awhile will make a huge difference!
3. Set savings goals each year. Target an amount you want to save each year based on your income so you can hold yourself accountable to achieve your goals.

Good luck!
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