FundRobot » Growth Fund » How to manage money for a teenager?

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Old   #1 (permalink)
 
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Default manage money for a teenager

I recently got a debit card. I have job, that pays okay. 250-350$ every 2 weeks. My parents pay for literally everything except my gas, lunch, and clothes. I will be putting 50$ of every check into savings. I only have about 140$ in my savings because i had to pay for dinner about 4 times. I usually spend 4-5$ everyday on lunch. How can save my money? I do not want to stay on campus for school lunch because i almost threw up the last time i had it. Thanks!

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Old   #2 (permalink)
 
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Default manage money for a teenager

Bring your own lunch from home. You can make sandwiches and such for very little and easily save a couple of dollars a day, it adds up quick.
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Old   #3 (permalink)
 
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Default manage money for a teenager

You need to manage your money the same way someone in their 20's, 30's, 40's and up SHOULD manage their money, and it shouldn't be to very hard to do.

Create a budget, plenty of online tools to do it (I like youdapig), then stick to it.

Sounds like a pain, but if you try it for a few months, you'll realize you're more comfortable spending money and you will have a better idea about what you can afford later in the year. Very useful if you have a girlfriend who is going to expect some gifts every once in a while!
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Old   #4 (permalink)
 
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Default manage money for a teenager

You make $500 - $700 every month; we'll go with the lower figure so that if you do happen to make more, you can put the extra towards any of the savings accounts listed below.

Here is a general budget that you will have as an adult that we can tweak to your student needs.

10% of your monthly income should be going to long-term (retirement) savings: $50 a month

15% goes to debt repayment/emergency fund: $75 a month goes into a regular savings account until you have at least 6 times your monthly income saved up ($3000)... BUT you're probably planning on post-secondary school, so keep saving beyond this point so that you can afford to pay for some schooling on your own, and have a stash so that when you take on student loans, you can afford to pay them off even while you're searching for your career job.

35% goes to housing (rent, mortgage, bills, utilities, insurances, etc.): $175 a month; while you are at home, this money should be either going to your parents, and/or going into your emergency fund; either way it is not money that you can spend willy-nilly; learn to live without using this money and by the time you're ready to move out, you will feel confident about your ability to stick to a budget.

15% goes to transportation (gas, insurance, repairs, bus): $75 a month; that's your gas money, and later on, your insurance money.

25% goes to life (food, entertainment, clothing, gifts, travel, medical, wants, phone, internet, cable, other, dinners, etc.): $125 a month, or $31.25 a week..... $25 is already gone because you refuse to pack your lunch in the morning and take it to school, leaving you a grand total of $6.25 a week; is it worth it?



As you can see, this budget is a LOT about saving, and right now you're probably groaning saying "O this sucks, I can't follow this budget, it's not realistic, I need to spend more money on life than on my savings right now"....... Newsflash, you WANT everything that's in that life category; it is not a need to go out and eat, it is not a need to get clothes all the time. Learn to distinguish the difference between what is a need and what is a want.

"But Bee, I'm young, what's the point of me even trying to save that much of my paycheck?". Let's do the math; let's say you put 10% ($50) retirement, and 15% ($75) emergency fund, and the 35% ($175) housing into savings every months.

First month: You'll have $300 saved up.
Second month: $600 saved
Third month: $900 saved
................
Sixth month: $1800 saved
Twelfth month: $3600 saved.

What could you do with $3600 saved up in a year's time? Or would you enjoy seeing your money grow so much that just maybe you'd want to keep saving? And this budget doesn't even factor in the fact that sometimes you make more than this, so if your income tends to lean more towards the $700 a month..... Now you're able to save 10% retirement ($70) and 15% emergency ($35), and 35% housing ($245)..... and now you're saving $350 a month.

First month: $350
Second month: $700
.............
Sixth month: $2100
.............
Twelfth month: $4200
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