SLFCU Teen Recommends Starting Early for a Lifetime of Financial Confidence
The way you spend and save money when you are a teenager can help you in your future. Some teens spend money as soon as they get it. A good habit is for you to save part of the money you get from allowance, working, and gifts.
Since teens don’t have bills to pay, saving 25% of your money is a realistic amount. That still leaves 75% for spending money on things like movies, food, clothes, and hanging out with friends.
It’s not always easy to follow this rule. I’ve tried it myself, and let’s just say I need to keep working on it. But if you get used to saving now, it’ll pay off for the rest of your life.
FROM YOUR FIRST CAR TO RETIREMENT
The money you save as a teenager can be used for important purchases like a reliable car, car repairs, and insurance. The car can help you to earn more money because you can use it to get to work. You will make even more money, and your savings will grow faster.
When you are ready for college, your savings can be used for college expenses not covered by your parents or scholarships. This will help you avoid debt. That will be a good start for your adult life. A college degree will make it possible for you to earn even more money and increase your savings.
After college you can use your savings to buy a house and furnishings. Houses can be expensive because sometimes they need minor or major repairs. It’s good to have money saved so the repairs can be done right away to avoid larger costs. Savings that aren’t used for repairs, maintenance, and property taxes can be used to make improvements like upgrading paint, bathroom or kitchen remodeling, flooring, and landscaping.
Your savings can be used for retirement, too. When you retire, you won’t have to worry about how to live since you have saved for your entire life. Your savings will be a good addition to your retirement funds and social security. In addition, you can do things like travel and spend money on your hobbies.
Life will throw emergencies at you now and again. It’s good to have money reserved for things like hospital bills from your parkour competition, bailing relatives out of jail, removing your neighbor’s car from your living room, repairs from your teen’s my-parents-are-out-of-town party, or a sharknado ripping through your house.
With money saved, you can have financial peace of mind.
By William Holland, SLFCU Member
Teens Can Get $100
SLFCU members age 13-17 are invited to submit an article on a financial topic to be considered for publication in our Dollars & Sense newsletter and on our website. SLFCU will award teens $100 for published articles.
Click here for details and to submit an article. SLFCU will review all submissions and respond within 30 days.
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