Saving money as a teenager is hard, especially when you have friends who are out buying new clothes and going on weekend trips. But it's not impossible.
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Learn to Diversify Your Custodial Account
10 Tips for Saving Money
“A good rule of thumb is to save 10 percent of what you earn, and have at least three months' worth of living expenses saved up in case of an emergency.” Once your teen has a steady job, help him set up a savings program so that at least 10 percent of earnings goes directly into his savings account.
If that is you, then these are the best ways of making a significant amount of money while still in high school.
How Much Should I Have Saved by 18? In this case, you'd want to have an estimated $1,220 in savings by the time you're 18 and starting this arrangement. This accounts for three months' worth of rent, car insurance payments, and smartphone plan – because it might take you awhile to find a job.
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At 16, most youngsters have some knowledge of the stock market. To begin investing in the stock market, a custodial account must be opened by a parent or guardian. ... In most cases, you can open a custodial account with as little as $100. Sixteen year olds are prohibited from making their own trades.
The bottom line
Popular investments for teens include custodial accounts, college savings plans, and retirement accounts. But your teen also might consider some less traditional investment options like starting a business. And yes, there are plenty of financial benefits to getting started early.
You're Losing Money Through Inflation
One of the biggest issues with saving money, especially in a savings account, is that the interest you will receive will be lower than the inflation rate. That means that over time, the money you save will be less than when you first put it in your savings account.
With the 30 day savings rule, you defer all non-essential purchases and impulse buys for 30 days. Instead of spending your money on something you might not need, you're going to take 30 days to think about it. At the end of this 30 day period, if you still want to make that purchase, feel free to go for it.
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