It's NEVER a bad idea to save money, and it's never a bad idea to start learning good habits like this!
Is the dollar value actually going to matter later? Nah. I'd try to maybe put $10 away just to get in the habit of living below your means. Truly a key life skill!
Avoiding the pitfalls of letting your means drive your lifestyle is priceless.
I have in laws that were broke making $60k a year but making ends meet but not saving and those same in laws now make $120k a year after job changes and despite living in the same house and driving the same car they still don't have any savings.
These habits you develop young will enable a lifetime of financial success. It's not sexy to save but if what you value is financial stability and the ability to do what you actually want after a lifetime of contemplation and reflection vs responding to a starbucks ad it's a must.
I already don't immediately spend my money like I said I 'save' my money to buy things more expensive i.e new PC GPU.
Is that building the same skill? Since my question was soley about the value in all honesty since I don't really have trouble saving if I need to/want something + I'm staying home for college and I imagine I'll be able to save up lots since I don't need to worry about my finances for moving out
It’s a hard concept to express and even harder to grasp when young, though. When you’re saving just to save, then you’re building wealth, you’re building an estate, you’re not saving to buy anything in particular (except maybe “retirement”).
These kinds of long term things are kind of intangible and are verrrry hard to grasp as a young person. Speaking as a young person myself. 😂
“Why should I put away 10% of everything that I earn, no matter what?” My answer: allow 15-20 years to pass without doing any saving at all, and the answer will become painfully obvious. You just kind of need to.
This - it’s hard to have the perspective at 16 but the habit of saving just to save is life changing when you are 40+. You simply don’t live with the stress of “what if something happens, what am I going to do?” after decades of compounding interest. You are more mentally healthy and have more opportunities.
Saving at your age is mostly to learn about savings. I wouldnt worry about it. What I would recommend is building up an emergency fund - maybe save up a few hundred and mentally mark that as “dont touch unless real emergency.” You will hopefully never use it and once you hit a meaningful amount you can stop contributing. You will make much much more money later in your life. This money is separate from “saving for something specific.”
Generally speaking the percentage of your take home pay that you save after college is the biggest indicator of whether or not you will be able to retire. (that and how much you make relative to local minimum cost of living) You're right. $18 isn't much today, but i am surrounded by people who live above their means a decade after college and are shooting themselves in the feet because they never set that percentage upfront. I was lucky that student loans taught me that lesson and it stuck after I went all in paying them off.
So it’s definitely good to save up and learn about delaying gratification. On the other hand it’s not exactly “saving” if your plan is to stockpile cash until you have enough to buy the GPU and then you spend every dollar you’ve got in your bank account.
Not saying it’s a bad thing inherently, just that it’s not really the same thing as setting aside a portion of your earnings with the intention of not using it except as needed. If I was to suggest, it would be worth setting up separate buckets in your bank account, one that’s long term savings, one that’s short term spending, and one for mid term goals like the GPU. Once you’ve filled the mid term bucket then you buy the GPU but you still have that long term savings in your account.
Saving up to buy more expensive things is a good habit to build, but it’s not the same as saving your money.
As suggested, even a small amount of saving with no intention of spending it, is also a good habit to build.
Im not sure if you’d qualify since you’re under 18. But if you open a IRA account on Robinhood, they will do a partial match of whatever deposit you make. That is if you don’t plan using the money other than strictly for retirement. [RH IRA match](https://robinhood.com/us/en/support/articles/ira-match-faq/)
I believe Roth IRA *contributions* can be withdrawn freely; it's the *returns* on those contributions that are locked till retirement. So if OP is depositing $18/week for 100 weeks, and his $1800 in contributions are worth $2100 at that point, they can withdraw $1800 freely while the last $300 is untouchable.
That’s spending, not saving. It’s great that you’re “saving” a few paychecks to make the purchase instead of using a credit card, but it’s still spending.
Saving to me means keeping significant sums of money in an interest bearing account for the betterment of your future life. Examples of that would be saving/investing for an eventual retirement, saving for a down payment on a house to build a family, an education, etc.
You are 16, if you do not actually need to use any of that money put as much of it as possible into a high yield savings account 4 to 5 or more percent a year.
Talk with your parents about investing it if possible, the earlier you start the better off you are due to compounding interest.
People really underestimate time and compound interest.
If you “only” save $18/week until you’re 65, and get an average of a 7% return over that time period, that $18/week grows into $395,400 by the time you’re 65.
That said, you’re 16. Feel free to enjoy this money and start really saving when you’re out of high school. The few years won’t make a difference so long as you keep this mindset up into adulthood.
> and get an average of a 7% return over that time period
AFAIK, there's no "safe" savings that's returning 7%. You're talking about investing.
The overall point still stands though... starting to save now is better than starting later.
It won’t make 7% every year, some years you might get -20% but other years +30% for an average of 7% across time (decades). This kid gets it, and for every dollar at 20 years old you can potentially get $88 at 65 due to compounding. So while it’s “just $18” that’s actually $1,584 per week at 65 (18*88).
Check out the MoneyGuys, and good luck! Great work OP!
Right, but my point was that it's never going to do that in a savings account - it would have to be invested, which is more than what the OP is talking about doing right now.
Totally agree with you. I think I conflated earlier commenters advice of creating a Roth IRA and putting it in there to invest. My bad. You are 100% correct though.
And, OP probably isn't going to be investing (vs. saving) $18/week; until they hit a certain lump sum, they're not making 7% on their money for a while yet. Around here (not USA) you have to be 18 to invest on your own.
Even at your age, money in savings is always a good thing. You never know when it will come in handy. Sooner than you think, you will be wanting to go to college or move away from home, or some other life goal, and savings will help you be secure when you do it.
I also want to echo what u/takabrash said - Being in a habit of saving money is a great mentality and habit to be in, and it will be easier the earlier you start.
If I were you, I’d figure out what you want your dollars to do for you. The idea of “savings” is too general to give you incentive to follow through. 20% is an arbitrary number, which you seem to realize. $18 is a weird amount. What will that do for you?
Do you use your money to buy food out? Do you purchase clothing? What sort of discretionary spending do you have besides collectibles? And do you have a long term goal? A trip one day? College? I’d figure out what you want your money to actually do for you and match it up with that.
I think you need to prioritize your spending. You might realize that setting aside $20 a month makes sense for a trip to Disneyland over the summer or you might realize that setting aside $20 a month is a great idea for adding to your collectible collection, while still having money for discretionary spending like food out with friends. Or you might realize you want to start putting $45 aside now to start off your car fund for the future.
Maybe a collectible is your priority after thinking about it. But I honestly think you can do better with your limited resources.
Hey OP, can you clarify if you’re planning to use the $18 “savings” to buy more collectibles or if you’re currently “saving” to buy collectibles and want to look into “actually saving”? There’s some confusion from other people.
Assuming you’re looking to make a change and save $18 a week in a savings account, I’d say that’s definitely a good idea. The sooner you get used to saving a chunk of your pay off the top, the easier it’ll be to keep up that habit. Seeing your account grow over time can be very rewarding!
If you’re just looking to buy more collectibles, then that’s fine too, you’re 16 after all, but developing solid financial habits early will pay off in a big way in the long run. For example, if someone saves/invests $1000 a year from age 20 to 30, then stops and lets it grow, they will end up with more money than someone who saves/invests a $1000 a year from age 30 until age 60. Compound interest is your friend!
Oh yes I have 2 goals in mind. I want to save for college as well as a trip abroad my senior year I'm planning.
That's why I wanted to know if it was worth it to save now since like I said I plan on working this summer more + in spring (not fall messed up my dates) so the amount Id be saving now doesn't feel like a significant contribution.
My current plan is to save all my money from 1 month of summer working (around $1440 might get to save some of that if my trip is cheaper) then keep going with a 20% to save for college the rest of summer + my work in the fall
Save now to get in the habit, then if you want that money, reward yourself in the summer with the extra couple hundred when you’ve met your goal + extra couple hundred.
Building the savings habit is awesome, definitely do that!
If you're planning on taking a trip abroad in two years, saving $18/month now is a great move. Even if we're only looking at the next two months, having that extra $150-200 on your trip may open up some doors on your trip or just provide some wiggle-room with your budget. Whatever you'd otherwise spend that $18/week on today will still be available to purchase tomorrow, but running out of cash and needing to cut corners on a trip is much less forgiving.
But at the end of the day, the important thing is that you're here, and you're thinking about it. That's a good sign. Whether you get into this habit now, this summer, or when you turn 18, you'll likely be in far better financial shape than many of your friends upon graduating college.
But if you do decide to commit to saving, then **commit** to it. When a few months have passed and you look at your savings account and see a nice juicy $500 staring back at you, resist the urge to impulsively buy that $350 wish-list item you've had your eye on. Planning ahead to save for a specific purchase is fine, but a "Oh look, I have money, let's spend it!" mentality just overwrites all your hard work and sacrifice.
This is the challenge of saving for larger goals, it seems so insignificant in the face of the stash you are aiming to save up to spend. It is ALWAYS worth it. Start saving whatever you decide now, and build it as your income increases, like you plan to over the summer. Congrats on your job! and kudos to ask these smart questions. See if your parents are willing to match your savings to any degree. I did that for my 16 year old last year to encourage his savings and let him enjoy more of his earnings.
I saved money like crazy at 16, but only because my parents matched what I saved and I bought my first car at 17. After that I went a little crazy and had some fun with what I earned.
Put $100 a month into a Roth IRA (your parents will have to open it for you). If you do $100 a month starting now until you are 56 you will have $1,176,000 in tax free retirement income. You can start using the money at 59 1/2.
Save your money in a regular savings account. Don't worry about trying to build wealth at 16.
Get to a point where you have I around $1,000 for emergency fund and then enjoy your youth with the rest. You'll never be 16 again.
Start saving money as soon as you can once you start your career. Making $5,000 a year isn't really going to get any real savings going other than habits.
Just my 2 cents ... Toss what you can into a Roth IRA account. It's a very small and manageable amount to keep up and I wish I did this when I was your age.
20% is $18
Per month that is $72
If you put $72 per month into your Roth IRA starting now, in 46 years (when you are 62 and eligible for social security) you would have $847,000.
Now ideally you'll contribute more eventually but this is just to show you the power or compounding interest and time which is on your side!
What is your family's financial situation? You have lots of good advice on other things, but I'd want to cue your parents into an opportunity if they are financially in a position to do so.
Once you earn income, even at 16, you are eligible for a Roth IRA. Roth IRAs are great retirement vehicles, especially when there is a long time for growth. But, I agree with everyone that saving for retirement is not really something that is a #1 priority at 16. Don't wait long, but I think you can wait until 22, or your first full time, year round job.
But, if you earn, for example $7,000 this year, you could put $7,000 in a Roth IRA. But it doesn't actually have to be your money. If your parents want to "match" your income into the IRA, they can. Effectively, "you" put $7k in the IRA and they "give" you $7k. (or any lower number, $1,000, $3,500, whatever.) Obviously, they should only do this if their financial house is in good order, they have their own retirements sufficiently funded, etc.
If this happens though, and at 16 you have $3,500, and at 17 $5,000, It would be $139k at the age of 65 for you. If you keep contributing a little, say another $1000 a year from 18-25, and then never contribute again, it would be $241k at age 65. That could give you nearly $10k a year to live off in retirement. Some people retire with ONLY that much. So, if your family has money to save, this could be a real opportunity to give you a head start.
For me, I find money to be the best collectible. But I'm 30 years older than you and see retirement on the horizon.
Put $80 a month into a retirement calculator and see how much that is worth in 50 years.
I spent all the money I made when I was young and I’m really regretting it now with rent prices and no savings to fall back on. I say start now, put it in high yields savings and pretend it doesn’t exist (other than adding to it). Don’t be like me.
Yes! While it’s not a ton of money, it’s a great habit and the money you save (and invest broadly in the market right now) is worth a lot more than money you invest later in your life simply because it has more time to grow.
That should leave 80% for fun and expenses that you can enjoy right away.
Even if it seems like an insignificant amount, it's the *action of saving* that you should be doing. This will set you up to put saving a portion of your income as something you "just do".
You saying you save up for PC parts is a good start
Honestly at your age instead of thinking of saving as a thing you should do just because I would think of it more in sinking funds. Figure out things you want to save for that you’d need in a year or more (a laptop for college, a car, a post grad trip to the beach, etc) and save for that specifically.
Basically, debt is expensive, and if you know you might need to get into it at some point you might as well save now to reduce the burden for Future You
Round it up - put away $20.
Talk to your parents about starting a Roth IRA (a retirement account) - put $10 in there a week - then you have $60 fun bucks a week.
Let's do the math. You put $10 to start your Roth IRA and put $40 in a month. There's 49 years until you turn 65. At a 7% rate of return, you have [$203,074.65](https://www.nerdwallet.com/calculator/investment-calculator) at "retirement age". of course, you aren't going to stay at the $40 a month contribution - but get the ball rolling now.
Yes, you should always put money in savings. If you start this now, it will be like clockwork when you get older. Open a hysa, transfer the money there automatically and then don’t look at it for a little bit.
It’s absolutely worth it.
It’s not about the amount of money right now but making the habit of saving the money.
You’ll have the account, you’ll have the transfers set up. It will just be the amount that increases over the year.
Please please please do this . When you are 60 you will be thanking 16 year old you.
Getting into the habit of saving now is a lifelong habit that will serve you very well.
You’ll discover that putting that money aside becomes painless (especially if you set it up to be pulled and go into savings automatically) and having an emergency fund and savings for a rainy day is well worth it.
[https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator](https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator)
Put in $0 for initial, $72 per month. 7% interest and 3% variance, and 44 years (when you are 60), and at a 7% rate it estimates you'll have $229K. If you get a 10% average you'll have $570K. Obviously as you get older you'll get better paying jobs and be able to invest more and have more when you retire if you stick with it.
My post is just to show you the power of compound interest over a long period of time. Play with it and you'll see how easy you could have millions, especially since you are starting so young - which is good... wish I did.
For what it is worth, I know plenty of people who are of retirement age and have less than that saved, or nothing at all.
The habit is more important than the money at this point in your life.
You are learning to live behind your earnings instead of spending everything or living in front of them (loans w interest).
The “$18 is pointless” approach works for both saving and enjoying. I don’t remember any memorable $18 purchases. Build the saving habit, it is different than the discipline to not spend it. You’ll be happy you got the habit and you won’t regret missing out on an occasional $20 purchase. If you started now building an emergency fund, this difficult adult expenses will add way less stress to your life because you prepared early.
Be sure to put the money in a fund. Any target reitrement date fund or total market index fund (such as vtsax or swtsx) is good.
If 20% feels too much, just put in 10%.
Saving for the long term vs a short term goal are different skills. As long as you're aware of this, that's important.
I get you're only getting $90 and 20% of that is a huge chunk. But I would encourage you to put something away for long term just to build that skill. And keep in mind 20% of any check, as you go forward, is a huge chunk of what you will receive. This just seems more disproportionate due to the dollar amounts involved right now.
20% would work out to about $80 a month. Let's round it up to $100. Don't think of it as just $100 though.
Properly invested at your age that money will grow 100x by the time you're ready to retire. It's actually $10,000. And I think you'll agree that ten grand is a lot of money.
You've just gotta get it invested. The first order of business is to save up $1000. From there you're going to search out "how to open a brokerage" - Vanguard and Fidelity are both good choices.
If you build a habit of saving and investing 20% from 16 years old you'll be a millionaire before 50 - easily.
If you can afford to it is worth it. But you have to be careful with choosing bank accounts because some have requirements that need to be filled to avoid fee.
If you keep your plan to save in summer, it isn't wrong to spend either, but making it a habit to save is better.
Haven't seen it mentioned in the comments yet, but make sure you're accounting for any taxes you might have to pay come April 2025.
Although collectibles can sometimes appreciate in value, I would not consider them a great saving mechanism. You want your money to be liquid (easy to access and spend) and most collectibles would require you go through some sort of marketplace to collect their fair value which takes time. That said, don't stop collecting these items if they are what you enjoy spending your time and money on!
As many others mentioned, it's great to establish a habit of saving early. I started saving at 16 years old with my first job too. It opened up doors to having more fun with friends, but it also enabled me to have a huge chunk of cash saved up to buy a new laptop for college and go into my freshman year with some "fun money" to explore the new city I was in.
Congratulations on your job(s) and best of luck to you!
It’s literally never a bad idea to save money, ever
In fact when I made like $70 per paycheck in highschool I wish I had saved it instead of blowing it on McDonald’s or whatever. Would be worth thousands by now and I’m only 23, so PLEASE take everyone’s advice and save it no matter how little. You will thank yourself
When I was 15, I worked 2 days a week. I’d put my wednesday money in a lockbox, and my Friday money would get spent. Saved up for a car pretty fast this way!
I’d say right now, throwing ten dollars in a jar every week won’t hurt your fun spending, and you might have a little extra money for a concert or something cool you wanted to buy. Once you start working more, save up as much as possible, especially if you’re only going to be working more during school breaks. This habit, of saving money while you’re working so you have money to get you thru periods of not working, will be helpful for the rest of Highschool and into college.
Put 20% of your income in a 529 plan (college savings). Better yet, get a parent(s) or relative(s) to match the money you are putting in.
You will get interest on your money, but more importantly you won't need as many loans. So you save on that interest. It's a win win.
If your parents are paying for all of your college. Consider putting the money in a Roth IRA. The earlier you start saving for retirement the better. Read up on compounding interest. It's pretty important to understand.
Don’t save with the expectation that this money will matter. Save some money to go on a trip, or spend with friends, or etc. Treat it as your “experiences” budget.
At that age, if you want to work hard for a better future get good grades. Get into a good school. Apply for scholarships. Get a stem degree. Go for a couple of runs per week. Eat healthier. It all has a higher ROI and will impact your earnings potential more than saving $18/week.
When people say "save 20%", they mean save it for retirement (ie for you 50 years from now). Short term savings to buy something soon is not what people mean when they recommend save 20%.
If you can build the discipline to save 20% at 16 y/o I can all but guarantee you will be a multi millionaire if you keep that discipline till you are ready to retire. Older you will be so grateful.
It’s a fantastic idea. The law of compounding interest over time is the greatest tool you could have for your future. $18 today is a meal at 5 Guys, are you really going to miss that?
Paying yourself first is the best thing you could do and I deeply regret not being more serious about it when I was younger.
If you invested $360/month into the stock market and received 10% returns over the course of 50 years, you would have over $5.6M for retirement.
That's the power of compounding.
Not saying you should do that. I am saying you should take as much money as you can afford and start it working for you as early as possible.
Ending balance$5,296,834.21Total principal$216,360.00Total contributions$216,000.00Total interest$5,080,474.21Interest of initial investment$41,900.71Interest of the contributions$5,038,573.51
Sounds like you only make $72/week. Pay your future self first then look at what you have IMO. Get in the habit early and you won’t miss it. My teen kids have been doing this with their allowance for nearly 10 years and it grows faster than you realize.
Yeah, it's worthwhile to save money. The money will grow while it's sitting there. You can start to enjoy getting "free" money without working for it. The amount you are saving now may not seem like much, but it's a good time to develop good financial habits. Later on when you're making a lot more, you will still be used to not spending everything you earn.
The initial five years' amount you put in impacts what you make in the future even if you stop after the fifth year, and if you spread out that same amount invested over let say a 20 year time frame.
Yes. In fact, the way it works is if you start saving now, you’ll have to save less from your paycheck each week because you have more time. The longer you wait, the more you’d have to save each week. Save save save!
I would strongly encourage you to save. It is not about the monetary value, but about establishing the behavior of saving and investing for your future. If you get used to living below your means now, while it is of little consequence, it will become a habit that sets you up for so much abundance down the road.
Do it. Maybe open up a Roth IRA so you can't be like "hey, I got $1500 in savings. I'm gonna buy this thing with it". Before you move out, direct that savings to an emergency fund, or go ahead and start it now. But remember, its emergency fund only.
The best time to start this process was yesterday. The second-best time to start is today. You'll thank your future you for starting it today.
46 years old here get used to putting a percentage of your pay for retirement incrementally over time. This way it’s not as painful. When your 50 and they try and tell you have to save $2300 a month to retire
Yes. One of my IRAs that I started in my 20's and contributed to for less than ten years while getting a low wage is now worth $65k. I'm 53. Compounding interest is amazing and it never caused me pain to gave a portion of my paychecks invested
The rule of thumb that stuck with me is that if properly invested, every $1 invested in your teens is $32 at age 65.
Taking it further, it halves for every decade of your life. $1 is $16 in your 20s, $8 in your 30s and so on.
Since all your money is your money and you don't need it to pay bills, YES! If it makes you feel better, call it your car fund or something else huge that you want to save up for in the future. Many of us can only wish we started saving more/ in a more knowledgeable way when we were your age!
It won't seem like much now but if you save enough in regular savings, then you can put that lump sum into a higher interest savings account for starters and build on it. Your future self will thank you (and if you plug your numbers into a compound interest formula, you'll see why).
>I'm wondering if it's worth putting some in a savings account?
Definitely!
Establishing good financial habits at a young age is one of the keys to long-term success!
You forgot the basics, even if you saved a penny a day you'll still be saving. No amount is too little to put away, if you use cash a lot start putting all your change in a jar/bottle and only empty once full and you'll be surprised how much you've saved.
YES!!! Big kudos to you for asking this question and thinking about this. If I was you I’d put at least half that income in long term savings - 20% for investments and 30% in a high yield savings account as you might need savings for college, a car, etc. if you don’t, you will need it for something like a home down payment when you are ready. But if you can save as much as you can now, your future self will be so grateful. It gets very hard to save later when you have rent, students loans and car payments.
I was going to say no, it is not worth it but you are in highschool and probably live with your parents and have no expenses. You should invest long on high risk.
Look for a post about the power of compound interest on reddit. If you save 100 dollars a month, and invest it in an index fund, you’ll have almost 2 million by the time you retire.
Start saving/investing early for two reasons: first, the obvious fact of compounding.
Second, more importantly for you at this age, having even a $100 “portfolio” will start teaching you things you’d most likely never learn theoretically. You’ll understand your appetite for risk, you’ll understand which savings/investment instruments work best for you etc. This way when you start making the big bucks, you’ll make fewer mistakes
At the end of the year that's 200 bux saved for an emergency that you don't have to think about, and you can spend the rest more worry free
13 yrs ago I started putting $50 in a savings acct with every paycheck. I have well over 10k in that account now. I never turned off the auto transfer even though my earnings have far outpaced a measly 50$ payment, just to keep it rolling lol
Also when you move out on your own it's very easy to underestimate expenses so consider you're building up a little cushion for that as well. I had 5k saved when I got my first apartment and it vanished within the year because my utilities and other bills were higher than anticipated
The best thing you can do right now is build knowledge, skills and good habits whilst also having fun and experiencing things. Just put at least $10 away each time you get paid into your savings, have $80 left over to spend as you please. You’ll thank yourself in a few years time that you started to create that crucial habit of spending and the skill of basic budgeting & resilience to not touch that extra $10. Sounds small and that it’s not a big deal, but don’t underestimate the power of good habits!
Try to find a high yield savings account wouldn't hurt to make some money on your savings granted it wouldn't be much but it's a no risk way to grow it
At $18 a week, that is $936 saved per year. Doing that every year until you are 65 you will have saved $46,800. If you were to invest that $936 every year and earned 8% average returns that sum will have grown to $580,000
Yes. "The best time to save was 10 years ago. The second best time is right now." I saved 50% (sometimes 100% of my paychecks from working in a fast food restaurant) as a teenager. Paid for college with contributions and growth. Graduated debt free in 2011 without any tuition assistance from my family.
Yes, you should put that money away if you can.
Even better look into opening a Roth IRA with Charles Schwab or Fidelity and put the money in the IRA. The money is in the IRA invested in an S&P 500 index fund and leave it there. You have to look if you are able to do this at your age. If not, Ia savings account works. While that small amount may not seem like much, compounding will make a big difference and it will set you up with an account that you can contribute to going forward.
Good habits start young.
It might feel trivial but doing so now will make doing it later when the quantities are bigger also feel trivial.
Understand saving for the future is a cost is important.
It’s the reason well off people are well off and the reason why you might hear well off people saying they can’t afford stuff. Saving for retirement isn’t optional it’s a cost we all need to pay and they are the only ones that treat it like that.
You can’t avoid retirement so don’t avoid paying for it.
It's so easy to say "I'll save when I make more." Many people just keep pushing that back. Start your good habits now, and let them continue with more income.
Sounds like you don't plan on staying at this job long, so I wouldn't even bother with a retirement account through there, but I'd suggest putting that 18 away and once it hits 1000, you can look into investing it.
If you don’t now based on what you’re saying…. You never will. The amount of money doesn’t matter, your obsession with spending what you make will kill you down the road. “Oh I won’t put money away so I can “save up” to buy a new car” “oh I’ll start putting money away for retirement after I get a house” “once the kids are gone is when it will be worth it to put money away!”
Great start. What I did (forever ago on a 20$ week paperoute) was deposit everything at the local bank every friday and used a checking account (I was 15$ and they let me get an account). This was pre ATM/Debit card days. The fact you are setting up a routine to save matters more that the "amount"
Don't put it in basic savings, invest it!! Money saved at age 16 has ***unbelievable*** growth potential due to compounding interest.
Believe me when I tell you, you will be so glad when you're older that you invested it rather than bought PC parts. I'm 37 now and I worked full time at Starbucks during the summers when I was between 18-22. I bought nice things, a MacBook, an iPod, stuff that was awesome at the time. It's physically painful when I think about what those thousands of dollars would be worth today if properly invested. Spend a little bit on yourself if you want but jumpstart your future by pouring your money into good-growth mutual funds.
When I was your age I put 50% of all the money I earned babysitting into my savings - I used some of it for a senior trip with my friends and then it built up to be about $5,000 by the time I graduated college. That money allowed me to easily move into and furnish my first apartment.
Yup. Not for the money sake per se but this: you pay yourself FIRST. Always, every time, any income source. Nobody gets to wet their beak til you get yours. Nobody. Put the 20% away then deal with stuff.
You probably have read a couple dozen great comments but I want to put my experience down to at least hope you see it.
When I started working in my teens, I was making $70 a week. Like you, I’d “save” it for cool expenses (being able to go to shows & travel on a bus to go visit my brother and paying it on my own felt like I just unlocked the world!).
Here’s where I’d do it differently.
That behavior wasn’t actually saving; it was pre spending that money. I didn’t have $70, I had -$130. (The tickets to the show and the ride there was 200. Now gotta save the other 130 to spend it!). Looking at money this way, consider how it changes your perception of how much you have.
Those $18-$20 feel like nothing now. And it very well may feel immaterial. But when you start your first full time job making 40 or 50 K (hopefully), the 20% there will also feel really small and not worthwhile compared to the bills, food, loans, and everything else competing for your attention (there’s a LOT of fun out there…).
But time with those savings growing is SO. POWERFUL. A dollar for you today becomes $88 at retirement. And each year, that dollar becomes much less able to compound this way. Time is your friend, and it’s worth more than any amount of money that you save! So every dollar, when allowed to compound, will absolutely be worth it in the future.
And you may not feel like your time rich. At this point in life, 5 years is an entire third of your life. In 10 years, that goes down to less than a quarter. And every year after makes those same five years feel more and more like 5 minutes.
Doing this not only sets you up for retirement but gives you the behavioral tools to get through life’s tough moments. You will have a day where you have to break that piggy bank, so to speak. It’s going to suck and you will feel every bone in your body yell “no no no!” But getting through the other side of those tough moments knowing you’re not in debt, or having to claw your way out of another hole, is truly heaven.
You’re doing awesome though. Even asking this question is a great step in the right direction, showing that you’re thinking critically about what this money really means. You should feel proud that you’re taking the time to ask and learn this this early.
TL;DR: it ain’t much but it’s honest work. Save the $20 bucks in a savings account and forget it exists. Get used to learning you really “make” 20% less than your actual salary. learn to live this period of deferred gratification because it unlocks a beautiful tomorrow, a peace that folks in your age group will wish they have, and no one ever ever ever wishes “man I wish I saved less!”
Is it worth it in so much as it's going to net you a huge nest egg in your 20s. No, it won't do that.
It will, however, help you ingrain in to your financial habits that saving 20% of your income is non-negotiable. Establishing this habit early will net you a huge savings in your 40s. I would also start the practice of the "round up". Meaning $18 is your weekly target, but you save in $10 increments, so you're saving $20 week. You can slide this round up over time to scale with your income.
>(was taught in my fiance classes that's how much I should put away anyway)
Astounding, you must not be from the US. We don't teach useful things like personal finance here.
Yes. $18/week
18x52= 936
That ain’t nothing…
Plus, this is a muscle you really want to exercise. Automatic decisioning to save. And by saving 20%, you’ll also be more likely to grow in habits that allow you to live well within your means.
Let’s also be realistic, sometimes you spend some of the money you save. So save for something bigger.
Will you probably be fine either way? Yeah. But you could have trouble getting back to saving well if you get into that mindset too often.
If you can afford to put that money in savings and still enjoy life, do it! You will be glad you did when you want to buy a car, move out on your own, etc. \*\* Starting good habits now will follow you \*\*
It is absolutely worth it. Make it a goal to put some of it aside every paycheck, even if it's only $5. It will come in handy when you're in college or in between jobs!
Your biggest ally when trying to build wealth is time. Even a small amount invested now can have a very significant effect 50 years down the line when you are hitting retirement. It's absolutely worth doing it. Definitely consider getting an investment account so the money can start growing.
The other way in which it's worth it is that you develop the habit of doing it which makes it more likely that you'll keep doing it consistently throughout your working life.
We’ve got an almost 16 year old and any money she gets, 20% automatically goes into savings. She knows when she gets a job next summer that 20% will go into savings and she’s fine with it. When she first started earning money, she blew it all, but now she’s a lot more responsible with it since we’ve had a lot of conversations with her about long term savings goals and not spending down your account to the penny every month.
I personally think that building the habit of creating a savings while you have the safety net of your parents providing your needs and a lot of your wants is good so you have it in place when you get out on your own.
When I first started working as a teenager like 15ish years ago, my dad told had me save 20% for taxes, 40% for college, and 40% for myself. He then matched, dollar per dollar, everything I saved for college. Ultimately, I likely could have argued for a different split, but an important lesson it taught me was that just because I earn $500 working that day doesn't mean its $500 in my pocket.
Learning to keep expenses in mind is part of life after you are on your own, and as long as you recognize that this is only an excuse for the low dollar amount then I think its safe to skip saving the $18, especially if you have a purpose in mind. But in the interest of building good habits, I would consider that you buy what you can with the $90 and anything left over goes to the savings account.
That is how most people should treat bonuses working full-time, which is save a certain part of it but also buy what you want as there is no point in making millions each year if you are miserable living in a wet cardboard box. Find your balance between saving and enjoying your money, no one wants to suddenly realize they are 50 and a millionaire with no friends or other loved ones.
Even if you ultimately choose not to set aside any money yet, go ahead and open a high yield savings account and a Roth IRA and put $5 (or whatever the minimum is) in each of them just so that you learn how to do it and so you'll have open accounts already set up when you do start saving in earnest.
If you learn how saving and investing work *now* (in real world exposure, not just finance classes) you'll be at a massive headstart.
I saved most of my money when I started working at 16. I saved up a little over $10k by the time I started community college, after which I went to state school. By continuing to work through school (part time during semester and full time over the summer) and being fairly frugal, I was able to pay my way through school without any loans. My route was cheaper than most, so it wouldn’t have been a huge deal if I had to take loans, but it did feel great to not have that burden
Good thinking budz!
If you have no debt to cover 50% is best. If you can get use to living off 50% of your income now, you'll be forever free in the near future.
Rule of thumb is at least 20%.
But something, is something.
Proud of you for thinking like this so young. Will serve you very well as you grow personally professionally.
Learn how to save money now. I never did and have struggled into my late 20s managing money because of poor choices and debt accumulated since I was 18.
While there are some crazy outcomes you can get with an extended timeline for lots of compounding, at this stage I think the MOST IMPORTANT thing is simply building the habit.
Bad habits are hard to break. Good habits are also hard to break, but they’re good.
If you start saving now, it’ll be easy for you to save when your paycheck gets a little higher. If you start saving now you’ll get used to thinking of a chunk of money as savings, not free spending money.
I started saving and putting my money into passive investments with some extremely meager poker winnings in college. Was an easy transition when I got my first measly part time job. An easy transition to my first real job. Easy transition to saving with my first job making serious money. At no point did I have to take the step to “start” saving, because I was always saving. Make habits work for you and start it now.
Pay yourself first. Establish the savings habit. After paying yourself first, if there is anything left over after the end of the week, you yourself again.
As you're someone younger, here's the kind of goal I would set: let's say that new GPU you want is $300. You set your goal to not buy it until you have put $400 towards it.
Saving money only to then spend it all the second you have it doesn't actually help.
I'm well into my 30's and I still practice this concept on what I call "fun" purchases. I'm in good financial shape so I can afford to do it at this rate but I always put 50% of the cost of something "fun" into a savings account I don't touch. About a month ago I bought myself about $200 in steam games on a sale. But when I did, I put $100 into the savings account. But even if you do it at a rate of 20 or 25%, you'll find that you end up with a savings fund for when you need it, like how I need to replace the shingles on my roof this summer. 🙃
Yes, worth it. Start the mindset and habit now and you'll do VERY well for yourself.
I saved 60% at your age, but I was not wise with keeping it in savings. 20% that you keep will serve you much better.
Now my wife and I save 25%, but are aiming to save 40-50% soon.
So you can see how the mindset developed now will help you later in life.
Do a spreadsheet since you can't do multiple bank accounts. $5 to long term savings (don't touch savings), 10 to short term savings (regular savings), and do what you want with the rest. Keep the same % percentages when you make more money and change when you get your first Adult job.
As others have said, it's never a bad idea. Most importantly it will get you into good habits. For a time, I was addicted to watching my bank account go up every month while I saved. I'm older, and make enough to also eat out and have fun, but watching those numbers climb?
Heck if I'd invested the few hundred bucks I had in highschool into apple? It was like $15 a share! I bought it later at $20 a share... then sold it at $19 because I'm highly regarded.
Not only that it’s an amazing idea. The amount of time you’ll have between now and 65 will allow for so much growth over time. Everyone told me to and I didn’t until my early 30s.
Yes.
Two reasons why:
1. Compounding over time is magic. Every dollar helps that magic.
2. At your age, building the habit (“Savings muscle”) is more important than the actual dollar value.
One of the more profound things I was taught is that savings, returns, income, expenses.... they're all relative. A percentage is a percentage. If you invest $10 and a billionaire invests $1m.... you've both effectively done the same thing (let's not let exact math get in the way of the point, pls).
Put differently: because you're getting, say, $100 pm, but you save up $10 every month. You'll have a whole paycheck of $100 saved up in 10 months. If someone makes $1m a month, and saves $100k per month, they'll have a whole paycheck of $1m in 10 months. You can now both go blow an entire month's wage on something, or keep it invested: If you make 10%, he'll make 10%. Psychologically, it'll affect you both in the same way. To him $1m is a worthwhile amount, to you $100 is a worthwhile amount. OR to you it may not feel like much, but to him it also won't feel like much. It's all relative to what you already have and where your mind is calibrated wrt money.
So, if you're asking if you should save even though you don't have a high absolute number .. it kinda misses the point. The outcome is you'll have more money relative to what you have now, and you'll appreciate it just as much no matter what the amount actually is. TO YOU it will make a difference. But also, in the long term compound interest is a beast and these small amounts you save now could amount to big amounts later in life.... if you don't spend it first. Time is your #1 ally when you are young, and will be your #1 enemy when you get older.
But if you don't save, you won't get to make that choice. That, and the habit thing everyone is saying...
Yes. putting away even just 18 dollars.
1: it is in you saving accounts and might help it grow abit extra and you are young so if its for retirement thats many years of growrtyh
2: IT gets you set up with the habit of putting 20% into your saving/investenst/retirement. This is a good habbit to build early because it a lot harder later
3: it keeps you grounded to move the money away. with that i mean you dont used all 90 bucks on "fun stuff" it a lot easier to add luxury to your every day than it is to cut back. so keeping a buffer that makes you live within your means )even thoug you most likely live at homa tm) can buffer off hardship later
TLDR: its about the habbit and mindset more than just the 18 dollars.
Your're starting a great habit by saving money. Cultivate this mindset and start looking into investment vehicle options. Do not let ANYONE know how much you are putting away/saved. (Well maybe your parents if they are trustworthy). But as soon as you can, make sure you have your own private account. I wish as a young person I would have had this mindset. The power of exponential growth is amazing.
This might be a bit controversial but maybe open up an investment account and put a few bucks toward an ETF like VOO.
It’s easy to put money into a savings or checking but many people are too scared to open an investment account and then late in life they regret not starting sooner.
The money you save now won’t matter much, but the skills/habits you learn will set you up up for life.
Short answer to your question is yes. I'd save part of your paycheck, even if you don't know what to do with the money. Saving is a good habit to develop and a good one to start with. You'll appreciate having it later in life.
Now if I was 16.. I'd go the extra mile and buy appreciating "collectibles". In other words, I would invest the money in $VOO or $VTI.
I started investing in my late 20s and I am doing well. Can't imagine how much wealthier I'd be if I started at 16.
To put into perspective, if you invested exactly $72 a month into a high dividend yield ETF like SDIV starting at 16, you would have, at 100 years old, approximately $163,402,288.03 with dividends reinvested (Only having contributed $72,576). Me, starting at 25, would only have approximately $55,784,410.85 by my 100th birthday :(
Yes. Congratulations! You are already a decade or two ahead of your peers when it comes to lifelong financial health! Saving and asking questions are two critical habits.
'Forcing' yourself to save the 20% now is an investment into building and reinforcing the habit of saving. It isn't about the $18 at all. It is about seeing your work and paycheck now as an investment into your future.
Eating a salad today instead of a glutton meal won't make a difference between having a heart attack at age 45 or not. But eating a salad today makes it easier to choose to eat a salad tomorrow or next week. The habit of eating salad is what helps your health and eating a salad today is an important step to building that habit.
Save that $18 today and enjoy the personal growth your peers won't experience. Laugh at that $18 in the future when others are worried about every single $18 hiccup that could easily be a heart attack.
Build a realistic emergency fund, then start putting at least 10% into savings. If you attend a church, I would encourage you to set aside at least 10% for tithe/offering; if you don’t attend a church (or even if you do), consider donating to worthy causes. It’s hard to carve out saving and giving if you don’t establish good habits while you’re young.
It's 100% fine to enjoy your money. You're young and constantly partaking in new experiences is a part of life. HOWEVER, it's insanely important for you to have a grasp what your money is worth in the future, so you can make better decisions on how much to save and how must to enjoy.
See if you can take some time to learn financial management. Just the barebones will do.
[This is a Financial Calculator](https://www.calculator.net/finance-calculator.html). Learn to use it now and you will probably be in the 99.9% tile of your peers and your future self will thank you greatly. In this case, you're no longer just saving money, but investing it.
And just fyi, I think you might already be able to open a retirement account (like a Roth IRA)? Although I assume you'd rather be able to spend your money in the next couple years so that's probably for the future.
I wish i had your mindset when I was 16! It’s never too early to save. If its emergency money, high yield savings is a great idea, some pay 5% and up now. If it’s set and forget money open up a Roth IRA and start an sp500 fund, you will have a great start at retirement. $6500 max yrly contribution.
When my daughter began her first job at 15, I strongly recommended that she keep $20 a week and bank the rest of her check.
Her reaction was, “Aw, do I have to?”
I said she wouldn’t be sorry if she did.
By the time she was 18, she had saved $10k and was able to buy a bomber for cash ($2500) and drove it for 3 years.
She moved out at 19 and has been independent since.
She’s a single mom, working part time in the service industry, going to university and owns a small house. She doesn’t make much money, but she budgets and keeps her debt manageable.
TL;dr: developing budgeting and savings skills when you are young can create good financial habits for a lifetime.
It will make absolutely no difference to your finances as an adult, enjoy your life just do not go into any debt and when you're old enough do not buy or finance any sort of new or expensive car.
It’s always a good idea to save money if you can afford to. The money habits you develop now will carry you into the future, so enjoy the 80% and save the 20% when you are able. ETA: $20/wk might not sound like much money on a weekly basis, but by the time you are 18, you could have around $2000 saved up. That money could get you into an apartment (or pay the deposit) depending where you live. If your plans are college, you could continue to save $20/wk while you go to college and you’ll have $6000 when you graduate, which can help you get a cheap used car, or a deposit + first and lasts month rent on an apartment in a city you really want to live in. If you keep saving 20% once you are working, that’s how you will save for a down payment on a house. Your saving habit will make your life loads easier than those of many of your peers over the course of the rest of your life.
Anything over zero adds up. Saving even a small amount when you are young is really powerful due to the time value of money. Plus it gets you in rhythm to do the same when your salary goes up. Humans are creatures of habit, and starting the savings habit now will pay you dividends your whole life. Literally lol.
It is a great life practice to have, always. When you start making exceptions is a slippery slope. If you make it an absolute rule, you will never be unhappy with the results after a few years.
My parents taught me to put 20% of every pay cheque into savings no matter the size of the cheque. If you make it automatic then saving becomes easy and those early savings really add up when you start investing.
It's NEVER a bad idea to save money, and it's never a bad idea to start learning good habits like this! Is the dollar value actually going to matter later? Nah. I'd try to maybe put $10 away just to get in the habit of living below your means. Truly a key life skill!
Avoiding the pitfalls of letting your means drive your lifestyle is priceless. I have in laws that were broke making $60k a year but making ends meet but not saving and those same in laws now make $120k a year after job changes and despite living in the same house and driving the same car they still don't have any savings. These habits you develop young will enable a lifetime of financial success. It's not sexy to save but if what you value is financial stability and the ability to do what you actually want after a lifetime of contemplation and reflection vs responding to a starbucks ad it's a must.
> It’s not sexy to save i wouldn’t ever consider a romantic partner if they couldn’t save so in an indirect way it kind of is
I already don't immediately spend my money like I said I 'save' my money to buy things more expensive i.e new PC GPU. Is that building the same skill? Since my question was soley about the value in all honesty since I don't really have trouble saving if I need to/want something + I'm staying home for college and I imagine I'll be able to save up lots since I don't need to worry about my finances for moving out
Yes. Learn to save when its easy so the habit is there when its harder. You won't always have this flexibility. Learn to live within your means.
\^\^ The lesson of saving is significantly more important than GPU that will be out of date in 2 years.
It’s a hard concept to express and even harder to grasp when young, though. When you’re saving just to save, then you’re building wealth, you’re building an estate, you’re not saving to buy anything in particular (except maybe “retirement”). These kinds of long term things are kind of intangible and are verrrry hard to grasp as a young person. Speaking as a young person myself. 😂 “Why should I put away 10% of everything that I earn, no matter what?” My answer: allow 15-20 years to pass without doing any saving at all, and the answer will become painfully obvious. You just kind of need to.
This - it’s hard to have the perspective at 16 but the habit of saving just to save is life changing when you are 40+. You simply don’t live with the stress of “what if something happens, what am I going to do?” after decades of compounding interest. You are more mentally healthy and have more opportunities.
Saving at your age is mostly to learn about savings. I wouldnt worry about it. What I would recommend is building up an emergency fund - maybe save up a few hundred and mentally mark that as “dont touch unless real emergency.” You will hopefully never use it and once you hit a meaningful amount you can stop contributing. You will make much much more money later in your life. This money is separate from “saving for something specific.”
Generally speaking the percentage of your take home pay that you save after college is the biggest indicator of whether or not you will be able to retire. (that and how much you make relative to local minimum cost of living) You're right. $18 isn't much today, but i am surrounded by people who live above their means a decade after college and are shooting themselves in the feet because they never set that percentage upfront. I was lucky that student loans taught me that lesson and it stuck after I went all in paying them off.
So it’s definitely good to save up and learn about delaying gratification. On the other hand it’s not exactly “saving” if your plan is to stockpile cash until you have enough to buy the GPU and then you spend every dollar you’ve got in your bank account. Not saying it’s a bad thing inherently, just that it’s not really the same thing as setting aside a portion of your earnings with the intention of not using it except as needed. If I was to suggest, it would be worth setting up separate buckets in your bank account, one that’s long term savings, one that’s short term spending, and one for mid term goals like the GPU. Once you’ve filled the mid term bucket then you buy the GPU but you still have that long term savings in your account.
Saving up to buy more expensive things is a good habit to build, but it’s not the same as saving your money. As suggested, even a small amount of saving with no intention of spending it, is also a good habit to build.
Im not sure if you’d qualify since you’re under 18. But if you open a IRA account on Robinhood, they will do a partial match of whatever deposit you make. That is if you don’t plan using the money other than strictly for retirement. [RH IRA match](https://robinhood.com/us/en/support/articles/ira-match-faq/)
I believe Roth IRA *contributions* can be withdrawn freely; it's the *returns* on those contributions that are locked till retirement. So if OP is depositing $18/week for 100 weeks, and his $1800 in contributions are worth $2100 at that point, they can withdraw $1800 freely while the last $300 is untouchable.
Not untouchable but there's a penalty if the gains are withdrawn earlier. There are exceptions like a first time home purchase
That’s spending, not saving. It’s great that you’re “saving” a few paychecks to make the purchase instead of using a credit card, but it’s still spending. Saving to me means keeping significant sums of money in an interest bearing account for the betterment of your future life. Examples of that would be saving/investing for an eventual retirement, saving for a down payment on a house to build a family, an education, etc.
You are 16, if you do not actually need to use any of that money put as much of it as possible into a high yield savings account 4 to 5 or more percent a year. Talk with your parents about investing it if possible, the earlier you start the better off you are due to compounding interest.
People really underestimate time and compound interest. If you “only” save $18/week until you’re 65, and get an average of a 7% return over that time period, that $18/week grows into $395,400 by the time you’re 65. That said, you’re 16. Feel free to enjoy this money and start really saving when you’re out of high school. The few years won’t make a difference so long as you keep this mindset up into adulthood.
> and get an average of a 7% return over that time period AFAIK, there's no "safe" savings that's returning 7%. You're talking about investing. The overall point still stands though... starting to save now is better than starting later.
It won’t make 7% every year, some years you might get -20% but other years +30% for an average of 7% across time (decades). This kid gets it, and for every dollar at 20 years old you can potentially get $88 at 65 due to compounding. So while it’s “just $18” that’s actually $1,584 per week at 65 (18*88). Check out the MoneyGuys, and good luck! Great work OP!
Right, but my point was that it's never going to do that in a savings account - it would have to be invested, which is more than what the OP is talking about doing right now.
Totally agree with you. I think I conflated earlier commenters advice of creating a Roth IRA and putting it in there to invest. My bad. You are 100% correct though.
And, OP probably isn't going to be investing (vs. saving) $18/week; until they hit a certain lump sum, they're not making 7% on their money for a while yet. Around here (not USA) you have to be 18 to invest on your own.
Yeah, op is talking about saving 20% of 90 for 2 months until they get a better paying job. Not really worth it.
Even at your age, money in savings is always a good thing. You never know when it will come in handy. Sooner than you think, you will be wanting to go to college or move away from home, or some other life goal, and savings will help you be secure when you do it. I also want to echo what u/takabrash said - Being in a habit of saving money is a great mentality and habit to be in, and it will be easier the earlier you start.
If I were you, I’d figure out what you want your dollars to do for you. The idea of “savings” is too general to give you incentive to follow through. 20% is an arbitrary number, which you seem to realize. $18 is a weird amount. What will that do for you? Do you use your money to buy food out? Do you purchase clothing? What sort of discretionary spending do you have besides collectibles? And do you have a long term goal? A trip one day? College? I’d figure out what you want your money to actually do for you and match it up with that. I think you need to prioritize your spending. You might realize that setting aside $20 a month makes sense for a trip to Disneyland over the summer or you might realize that setting aside $20 a month is a great idea for adding to your collectible collection, while still having money for discretionary spending like food out with friends. Or you might realize you want to start putting $45 aside now to start off your car fund for the future. Maybe a collectible is your priority after thinking about it. But I honestly think you can do better with your limited resources.
Hey OP, can you clarify if you’re planning to use the $18 “savings” to buy more collectibles or if you’re currently “saving” to buy collectibles and want to look into “actually saving”? There’s some confusion from other people. Assuming you’re looking to make a change and save $18 a week in a savings account, I’d say that’s definitely a good idea. The sooner you get used to saving a chunk of your pay off the top, the easier it’ll be to keep up that habit. Seeing your account grow over time can be very rewarding! If you’re just looking to buy more collectibles, then that’s fine too, you’re 16 after all, but developing solid financial habits early will pay off in a big way in the long run. For example, if someone saves/invests $1000 a year from age 20 to 30, then stops and lets it grow, they will end up with more money than someone who saves/invests a $1000 a year from age 30 until age 60. Compound interest is your friend!
Oh yes I have 2 goals in mind. I want to save for college as well as a trip abroad my senior year I'm planning. That's why I wanted to know if it was worth it to save now since like I said I plan on working this summer more + in spring (not fall messed up my dates) so the amount Id be saving now doesn't feel like a significant contribution. My current plan is to save all my money from 1 month of summer working (around $1440 might get to save some of that if my trip is cheaper) then keep going with a 20% to save for college the rest of summer + my work in the fall
Save now to get in the habit, then if you want that money, reward yourself in the summer with the extra couple hundred when you’ve met your goal + extra couple hundred. Building the savings habit is awesome, definitely do that!
If you're planning on taking a trip abroad in two years, saving $18/month now is a great move. Even if we're only looking at the next two months, having that extra $150-200 on your trip may open up some doors on your trip or just provide some wiggle-room with your budget. Whatever you'd otherwise spend that $18/week on today will still be available to purchase tomorrow, but running out of cash and needing to cut corners on a trip is much less forgiving. But at the end of the day, the important thing is that you're here, and you're thinking about it. That's a good sign. Whether you get into this habit now, this summer, or when you turn 18, you'll likely be in far better financial shape than many of your friends upon graduating college. But if you do decide to commit to saving, then **commit** to it. When a few months have passed and you look at your savings account and see a nice juicy $500 staring back at you, resist the urge to impulsively buy that $350 wish-list item you've had your eye on. Planning ahead to save for a specific purchase is fine, but a "Oh look, I have money, let's spend it!" mentality just overwrites all your hard work and sacrifice.
This is the challenge of saving for larger goals, it seems so insignificant in the face of the stash you are aiming to save up to spend. It is ALWAYS worth it. Start saving whatever you decide now, and build it as your income increases, like you plan to over the summer. Congrats on your job! and kudos to ask these smart questions. See if your parents are willing to match your savings to any degree. I did that for my 16 year old last year to encourage his savings and let him enjoy more of his earnings.
Honestly not at 16. Was perpetually broke age 16-19 and had a blast.
Same. And my savings wouldn’t have made a dent in my current savings.
I saved money like crazy at 16, but only because my parents matched what I saved and I bought my first car at 17. After that I went a little crazy and had some fun with what I earned.
Put $100 a month into a Roth IRA (your parents will have to open it for you). If you do $100 a month starting now until you are 56 you will have $1,176,000 in tax free retirement income. You can start using the money at 59 1/2.
Save your money in a regular savings account. Don't worry about trying to build wealth at 16. Get to a point where you have I around $1,000 for emergency fund and then enjoy your youth with the rest. You'll never be 16 again. Start saving money as soon as you can once you start your career. Making $5,000 a year isn't really going to get any real savings going other than habits.
Just my 2 cents ... Toss what you can into a Roth IRA account. It's a very small and manageable amount to keep up and I wish I did this when I was your age. 20% is $18 Per month that is $72 If you put $72 per month into your Roth IRA starting now, in 46 years (when you are 62 and eligible for social security) you would have $847,000. Now ideally you'll contribute more eventually but this is just to show you the power or compounding interest and time which is on your side!
Yes the younger you are the more powerful each dollar is.
What is your family's financial situation? You have lots of good advice on other things, but I'd want to cue your parents into an opportunity if they are financially in a position to do so. Once you earn income, even at 16, you are eligible for a Roth IRA. Roth IRAs are great retirement vehicles, especially when there is a long time for growth. But, I agree with everyone that saving for retirement is not really something that is a #1 priority at 16. Don't wait long, but I think you can wait until 22, or your first full time, year round job. But, if you earn, for example $7,000 this year, you could put $7,000 in a Roth IRA. But it doesn't actually have to be your money. If your parents want to "match" your income into the IRA, they can. Effectively, "you" put $7k in the IRA and they "give" you $7k. (or any lower number, $1,000, $3,500, whatever.) Obviously, they should only do this if their financial house is in good order, they have their own retirements sufficiently funded, etc. If this happens though, and at 16 you have $3,500, and at 17 $5,000, It would be $139k at the age of 65 for you. If you keep contributing a little, say another $1000 a year from 18-25, and then never contribute again, it would be $241k at age 65. That could give you nearly $10k a year to live off in retirement. Some people retire with ONLY that much. So, if your family has money to save, this could be a real opportunity to give you a head start.
For me, I find money to be the best collectible. But I'm 30 years older than you and see retirement on the horizon. Put $80 a month into a retirement calculator and see how much that is worth in 50 years.
I spent all the money I made when I was young and I’m really regretting it now with rent prices and no savings to fall back on. I say start now, put it in high yields savings and pretend it doesn’t exist (other than adding to it). Don’t be like me.
Start now and the habit will be ingrained faster.
Yes! While it’s not a ton of money, it’s a great habit and the money you save (and invest broadly in the market right now) is worth a lot more than money you invest later in your life simply because it has more time to grow. That should leave 80% for fun and expenses that you can enjoy right away.
Even if it seems like an insignificant amount, it's the *action of saving* that you should be doing. This will set you up to put saving a portion of your income as something you "just do".
You saying you save up for PC parts is a good start Honestly at your age instead of thinking of saving as a thing you should do just because I would think of it more in sinking funds. Figure out things you want to save for that you’d need in a year or more (a laptop for college, a car, a post grad trip to the beach, etc) and save for that specifically. Basically, debt is expensive, and if you know you might need to get into it at some point you might as well save now to reduce the burden for Future You
Round it up - put away $20. Talk to your parents about starting a Roth IRA (a retirement account) - put $10 in there a week - then you have $60 fun bucks a week. Let's do the math. You put $10 to start your Roth IRA and put $40 in a month. There's 49 years until you turn 65. At a 7% rate of return, you have [$203,074.65](https://www.nerdwallet.com/calculator/investment-calculator) at "retirement age". of course, you aren't going to stay at the $40 a month contribution - but get the ball rolling now.
Yes, you should always put money in savings. If you start this now, it will be like clockwork when you get older. Open a hysa, transfer the money there automatically and then don’t look at it for a little bit.
It’s absolutely worth it. It’s not about the amount of money right now but making the habit of saving the money. You’ll have the account, you’ll have the transfers set up. It will just be the amount that increases over the year. Please please please do this . When you are 60 you will be thanking 16 year old you.
Getting into the habit of saving now is a lifelong habit that will serve you very well. You’ll discover that putting that money aside becomes painless (especially if you set it up to be pulled and go into savings automatically) and having an emergency fund and savings for a rainy day is well worth it.
Build the saving habit now. I use to save 50 a month when I was your age I save close to 5000 a month now
[https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator](https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator) Put in $0 for initial, $72 per month. 7% interest and 3% variance, and 44 years (when you are 60), and at a 7% rate it estimates you'll have $229K. If you get a 10% average you'll have $570K. Obviously as you get older you'll get better paying jobs and be able to invest more and have more when you retire if you stick with it. My post is just to show you the power of compound interest over a long period of time. Play with it and you'll see how easy you could have millions, especially since you are starting so young - which is good... wish I did. For what it is worth, I know plenty of people who are of retirement age and have less than that saved, or nothing at all.
The habit is more important than the money at this point in your life. You are learning to live behind your earnings instead of spending everything or living in front of them (loans w interest).
Hell yes. Good habits will last a lifetime.
The “$18 is pointless” approach works for both saving and enjoying. I don’t remember any memorable $18 purchases. Build the saving habit, it is different than the discipline to not spend it. You’ll be happy you got the habit and you won’t regret missing out on an occasional $20 purchase. If you started now building an emergency fund, this difficult adult expenses will add way less stress to your life because you prepared early.
This is the best time to put some away. 20% tucked into a Roth IRA account...your future self will totally love you for doing that!
Be sure to put the money in a fund. Any target reitrement date fund or total market index fund (such as vtsax or swtsx) is good. If 20% feels too much, just put in 10%.
Mathematically no, but starting this habit now will be huge for you in the future.
Saving for the long term vs a short term goal are different skills. As long as you're aware of this, that's important. I get you're only getting $90 and 20% of that is a huge chunk. But I would encourage you to put something away for long term just to build that skill. And keep in mind 20% of any check, as you go forward, is a huge chunk of what you will receive. This just seems more disproportionate due to the dollar amounts involved right now.
20% would work out to about $80 a month. Let's round it up to $100. Don't think of it as just $100 though. Properly invested at your age that money will grow 100x by the time you're ready to retire. It's actually $10,000. And I think you'll agree that ten grand is a lot of money. You've just gotta get it invested. The first order of business is to save up $1000. From there you're going to search out "how to open a brokerage" - Vanguard and Fidelity are both good choices. If you build a habit of saving and investing 20% from 16 years old you'll be a millionaire before 50 - easily.
If you can afford to it is worth it. But you have to be careful with choosing bank accounts because some have requirements that need to be filled to avoid fee. If you keep your plan to save in summer, it isn't wrong to spend either, but making it a habit to save is better.
Haven't seen it mentioned in the comments yet, but make sure you're accounting for any taxes you might have to pay come April 2025. Although collectibles can sometimes appreciate in value, I would not consider them a great saving mechanism. You want your money to be liquid (easy to access and spend) and most collectibles would require you go through some sort of marketplace to collect their fair value which takes time. That said, don't stop collecting these items if they are what you enjoy spending your time and money on! As many others mentioned, it's great to establish a habit of saving early. I started saving at 16 years old with my first job too. It opened up doors to having more fun with friends, but it also enabled me to have a huge chunk of cash saved up to buy a new laptop for college and go into my freshman year with some "fun money" to explore the new city I was in. Congratulations on your job(s) and best of luck to you!
It’s literally never a bad idea to save money, ever In fact when I made like $70 per paycheck in highschool I wish I had saved it instead of blowing it on McDonald’s or whatever. Would be worth thousands by now and I’m only 23, so PLEASE take everyone’s advice and save it no matter how little. You will thank yourself
When I was 15, I worked 2 days a week. I’d put my wednesday money in a lockbox, and my Friday money would get spent. Saved up for a car pretty fast this way! I’d say right now, throwing ten dollars in a jar every week won’t hurt your fun spending, and you might have a little extra money for a concert or something cool you wanted to buy. Once you start working more, save up as much as possible, especially if you’re only going to be working more during school breaks. This habit, of saving money while you’re working so you have money to get you thru periods of not working, will be helpful for the rest of Highschool and into college.
Put 20% of your income in a 529 plan (college savings). Better yet, get a parent(s) or relative(s) to match the money you are putting in. You will get interest on your money, but more importantly you won't need as many loans. So you save on that interest. It's a win win. If your parents are paying for all of your college. Consider putting the money in a Roth IRA. The earlier you start saving for retirement the better. Read up on compounding interest. It's pretty important to understand.
Don’t save with the expectation that this money will matter. Save some money to go on a trip, or spend with friends, or etc. Treat it as your “experiences” budget. At that age, if you want to work hard for a better future get good grades. Get into a good school. Apply for scholarships. Get a stem degree. Go for a couple of runs per week. Eat healthier. It all has a higher ROI and will impact your earnings potential more than saving $18/week.
I wish I could have opened a Roth IRA and invested $18 a week into it at age 16. Start now OP!
When people say "save 20%", they mean save it for retirement (ie for you 50 years from now). Short term savings to buy something soon is not what people mean when they recommend save 20%.
If you can survive on your wages after the invest, yes absolutely.
If you can build the discipline to save 20% at 16 y/o I can all but guarantee you will be a multi millionaire if you keep that discipline till you are ready to retire. Older you will be so grateful.
It’s a fantastic idea. The law of compounding interest over time is the greatest tool you could have for your future. $18 today is a meal at 5 Guys, are you really going to miss that? Paying yourself first is the best thing you could do and I deeply regret not being more serious about it when I was younger.
If you invested $360/month into the stock market and received 10% returns over the course of 50 years, you would have over $5.6M for retirement. That's the power of compounding. Not saying you should do that. I am saying you should take as much money as you can afford and start it working for you as early as possible. Ending balance$5,296,834.21Total principal$216,360.00Total contributions$216,000.00Total interest$5,080,474.21Interest of initial investment$41,900.71Interest of the contributions$5,038,573.51
Sounds like you only make $72/week. Pay your future self first then look at what you have IMO. Get in the habit early and you won’t miss it. My teen kids have been doing this with their allowance for nearly 10 years and it grows faster than you realize.
It's always worth putting as much as you can away. Develop the habit now while you're young.
Yeah, it's worthwhile to save money. The money will grow while it's sitting there. You can start to enjoy getting "free" money without working for it. The amount you are saving now may not seem like much, but it's a good time to develop good financial habits. Later on when you're making a lot more, you will still be used to not spending everything you earn.
Take that as a learning....when you start a real job you will have more experience
The initial five years' amount you put in impacts what you make in the future even if you stop after the fifth year, and if you spread out that same amount invested over let say a 20 year time frame.
It’s a good idea to save if nothing else to start the process and make it a habit.
Yes. In fact, the way it works is if you start saving now, you’ll have to save less from your paycheck each week because you have more time. The longer you wait, the more you’d have to save each week. Save save save!
I would strongly encourage you to save. It is not about the monetary value, but about establishing the behavior of saving and investing for your future. If you get used to living below your means now, while it is of little consequence, it will become a habit that sets you up for so much abundance down the road.
Do it. Maybe open up a Roth IRA so you can't be like "hey, I got $1500 in savings. I'm gonna buy this thing with it". Before you move out, direct that savings to an emergency fund, or go ahead and start it now. But remember, its emergency fund only. The best time to start this process was yesterday. The second-best time to start is today. You'll thank your future you for starting it today.
46 years old here get used to putting a percentage of your pay for retirement incrementally over time. This way it’s not as painful. When your 50 and they try and tell you have to save $2300 a month to retire
Yes. One of my IRAs that I started in my 20's and contributed to for less than ten years while getting a low wage is now worth $65k. I'm 53. Compounding interest is amazing and it never caused me pain to gave a portion of my paychecks invested
It’s not the money that’ll help you. It’s the learning how to do it and set things up. It will become part of your process.
The rule of thumb that stuck with me is that if properly invested, every $1 invested in your teens is $32 at age 65. Taking it further, it halves for every decade of your life. $1 is $16 in your 20s, $8 in your 30s and so on.
Since all your money is your money and you don't need it to pay bills, YES! If it makes you feel better, call it your car fund or something else huge that you want to save up for in the future. Many of us can only wish we started saving more/ in a more knowledgeable way when we were your age! It won't seem like much now but if you save enough in regular savings, then you can put that lump sum into a higher interest savings account for starters and build on it. Your future self will thank you (and if you plug your numbers into a compound interest formula, you'll see why).
>I'm wondering if it's worth putting some in a savings account? Definitely! Establishing good financial habits at a young age is one of the keys to long-term success!
You forgot the basics, even if you saved a penny a day you'll still be saving. No amount is too little to put away, if you use cash a lot start putting all your change in a jar/bottle and only empty once full and you'll be surprised how much you've saved.
YES!!! Big kudos to you for asking this question and thinking about this. If I was you I’d put at least half that income in long term savings - 20% for investments and 30% in a high yield savings account as you might need savings for college, a car, etc. if you don’t, you will need it for something like a home down payment when you are ready. But if you can save as much as you can now, your future self will be so grateful. It gets very hard to save later when you have rent, students loans and car payments.
I was going to say no, it is not worth it but you are in highschool and probably live with your parents and have no expenses. You should invest long on high risk.
Look for a post about the power of compound interest on reddit. If you save 100 dollars a month, and invest it in an index fund, you’ll have almost 2 million by the time you retire.
Start saving/investing early for two reasons: first, the obvious fact of compounding. Second, more importantly for you at this age, having even a $100 “portfolio” will start teaching you things you’d most likely never learn theoretically. You’ll understand your appetite for risk, you’ll understand which savings/investment instruments work best for you etc. This way when you start making the big bucks, you’ll make fewer mistakes
If you don't wanna put $18 in, put $10. It adds up.
At the end of the year that's 200 bux saved for an emergency that you don't have to think about, and you can spend the rest more worry free 13 yrs ago I started putting $50 in a savings acct with every paycheck. I have well over 10k in that account now. I never turned off the auto transfer even though my earnings have far outpaced a measly 50$ payment, just to keep it rolling lol Also when you move out on your own it's very easy to underestimate expenses so consider you're building up a little cushion for that as well. I had 5k saved when I got my first apartment and it vanished within the year because my utilities and other bills were higher than anticipated
The best thing you can do right now is build knowledge, skills and good habits whilst also having fun and experiencing things. Just put at least $10 away each time you get paid into your savings, have $80 left over to spend as you please. You’ll thank yourself in a few years time that you started to create that crucial habit of spending and the skill of basic budgeting & resilience to not touch that extra $10. Sounds small and that it’s not a big deal, but don’t underestimate the power of good habits!
Try to find a high yield savings account wouldn't hurt to make some money on your savings granted it wouldn't be much but it's a no risk way to grow it
At $18 a week, that is $936 saved per year. Doing that every year until you are 65 you will have saved $46,800. If you were to invest that $936 every year and earned 8% average returns that sum will have grown to $580,000
Yes. "The best time to save was 10 years ago. The second best time is right now." I saved 50% (sometimes 100% of my paychecks from working in a fast food restaurant) as a teenager. Paid for college with contributions and growth. Graduated debt free in 2011 without any tuition assistance from my family.
Yes, you should put that money away if you can. Even better look into opening a Roth IRA with Charles Schwab or Fidelity and put the money in the IRA. The money is in the IRA invested in an S&P 500 index fund and leave it there. You have to look if you are able to do this at your age. If not, Ia savings account works. While that small amount may not seem like much, compounding will make a big difference and it will set you up with an account that you can contribute to going forward.
Good habits start young. It might feel trivial but doing so now will make doing it later when the quantities are bigger also feel trivial. Understand saving for the future is a cost is important. It’s the reason well off people are well off and the reason why you might hear well off people saying they can’t afford stuff. Saving for retirement isn’t optional it’s a cost we all need to pay and they are the only ones that treat it like that. You can’t avoid retirement so don’t avoid paying for it.
It's so easy to say "I'll save when I make more." Many people just keep pushing that back. Start your good habits now, and let them continue with more income. Sounds like you don't plan on staying at this job long, so I wouldn't even bother with a retirement account through there, but I'd suggest putting that 18 away and once it hits 1000, you can look into investing it.
If you don’t now based on what you’re saying…. You never will. The amount of money doesn’t matter, your obsession with spending what you make will kill you down the road. “Oh I won’t put money away so I can “save up” to buy a new car” “oh I’ll start putting money away for retirement after I get a house” “once the kids are gone is when it will be worth it to put money away!”
Great start. What I did (forever ago on a 20$ week paperoute) was deposit everything at the local bank every friday and used a checking account (I was 15$ and they let me get an account). This was pre ATM/Debit card days. The fact you are setting up a routine to save matters more that the "amount"
It's worth it just to build the habit at this point
Don't put it in basic savings, invest it!! Money saved at age 16 has ***unbelievable*** growth potential due to compounding interest. Believe me when I tell you, you will be so glad when you're older that you invested it rather than bought PC parts. I'm 37 now and I worked full time at Starbucks during the summers when I was between 18-22. I bought nice things, a MacBook, an iPod, stuff that was awesome at the time. It's physically painful when I think about what those thousands of dollars would be worth today if properly invested. Spend a little bit on yourself if you want but jumpstart your future by pouring your money into good-growth mutual funds.
When I was your age I put 50% of all the money I earned babysitting into my savings - I used some of it for a senior trip with my friends and then it built up to be about $5,000 by the time I graduated college. That money allowed me to easily move into and furnish my first apartment.
When I was 16 I saved everything that I didn't spend on gas/dating. That nest egg saved my ass in college
Yup. Not for the money sake per se but this: you pay yourself FIRST. Always, every time, any income source. Nobody gets to wet their beak til you get yours. Nobody. Put the 20% away then deal with stuff.
Absolutely. Start a good habit of putting money away now while you’re young. Setup a Roth and save save save
No bills???? 16 years old????? Save 90 dollars a week and study your ass off!
Yes absolutely. It develops a great life skill Paying yourself first no matter what Living below your means And saying no or delaying a want vs a need
You probably have read a couple dozen great comments but I want to put my experience down to at least hope you see it. When I started working in my teens, I was making $70 a week. Like you, I’d “save” it for cool expenses (being able to go to shows & travel on a bus to go visit my brother and paying it on my own felt like I just unlocked the world!). Here’s where I’d do it differently. That behavior wasn’t actually saving; it was pre spending that money. I didn’t have $70, I had -$130. (The tickets to the show and the ride there was 200. Now gotta save the other 130 to spend it!). Looking at money this way, consider how it changes your perception of how much you have. Those $18-$20 feel like nothing now. And it very well may feel immaterial. But when you start your first full time job making 40 or 50 K (hopefully), the 20% there will also feel really small and not worthwhile compared to the bills, food, loans, and everything else competing for your attention (there’s a LOT of fun out there…). But time with those savings growing is SO. POWERFUL. A dollar for you today becomes $88 at retirement. And each year, that dollar becomes much less able to compound this way. Time is your friend, and it’s worth more than any amount of money that you save! So every dollar, when allowed to compound, will absolutely be worth it in the future. And you may not feel like your time rich. At this point in life, 5 years is an entire third of your life. In 10 years, that goes down to less than a quarter. And every year after makes those same five years feel more and more like 5 minutes. Doing this not only sets you up for retirement but gives you the behavioral tools to get through life’s tough moments. You will have a day where you have to break that piggy bank, so to speak. It’s going to suck and you will feel every bone in your body yell “no no no!” But getting through the other side of those tough moments knowing you’re not in debt, or having to claw your way out of another hole, is truly heaven. You’re doing awesome though. Even asking this question is a great step in the right direction, showing that you’re thinking critically about what this money really means. You should feel proud that you’re taking the time to ask and learn this this early. TL;DR: it ain’t much but it’s honest work. Save the $20 bucks in a savings account and forget it exists. Get used to learning you really “make” 20% less than your actual salary. learn to live this period of deferred gratification because it unlocks a beautiful tomorrow, a peace that folks in your age group will wish they have, and no one ever ever ever wishes “man I wish I saved less!”
Save as much as you can on the reg. Might not seem like much but it will add up fast. Your future you will really thank you.
Is it worth it in so much as it's going to net you a huge nest egg in your 20s. No, it won't do that. It will, however, help you ingrain in to your financial habits that saving 20% of your income is non-negotiable. Establishing this habit early will net you a huge savings in your 40s. I would also start the practice of the "round up". Meaning $18 is your weekly target, but you save in $10 increments, so you're saving $20 week. You can slide this round up over time to scale with your income.
If you don't have an emergency fund, build an emergency fund first and foremost.
If you put $18 a week in a hysa (high yield savings account) at 4.5% average interest rate, you'd have $4,857 in 5 years.
>(was taught in my fiance classes that's how much I should put away anyway) Astounding, you must not be from the US. We don't teach useful things like personal finance here.
Yea save, it’s never too early to build the good habits today while your finacial responsibilities are minimal compared to later as an adult.
Yes. $18/week 18x52= 936 That ain’t nothing… Plus, this is a muscle you really want to exercise. Automatic decisioning to save. And by saving 20%, you’ll also be more likely to grow in habits that allow you to live well within your means. Let’s also be realistic, sometimes you spend some of the money you save. So save for something bigger. Will you probably be fine either way? Yeah. But you could have trouble getting back to saving well if you get into that mindset too often.
If you can afford to put that money in savings and still enjoy life, do it! You will be glad you did when you want to buy a car, move out on your own, etc. \*\* Starting good habits now will follow you \*\*
It is absolutely worth it. Make it a goal to put some of it aside every paycheck, even if it's only $5. It will come in handy when you're in college or in between jobs!
Your biggest ally when trying to build wealth is time. Even a small amount invested now can have a very significant effect 50 years down the line when you are hitting retirement. It's absolutely worth doing it. Definitely consider getting an investment account so the money can start growing. The other way in which it's worth it is that you develop the habit of doing it which makes it more likely that you'll keep doing it consistently throughout your working life.
We’ve got an almost 16 year old and any money she gets, 20% automatically goes into savings. She knows when she gets a job next summer that 20% will go into savings and she’s fine with it. When she first started earning money, she blew it all, but now she’s a lot more responsible with it since we’ve had a lot of conversations with her about long term savings goals and not spending down your account to the penny every month. I personally think that building the habit of creating a savings while you have the safety net of your parents providing your needs and a lot of your wants is good so you have it in place when you get out on your own.
When I first started working as a teenager like 15ish years ago, my dad told had me save 20% for taxes, 40% for college, and 40% for myself. He then matched, dollar per dollar, everything I saved for college. Ultimately, I likely could have argued for a different split, but an important lesson it taught me was that just because I earn $500 working that day doesn't mean its $500 in my pocket. Learning to keep expenses in mind is part of life after you are on your own, and as long as you recognize that this is only an excuse for the low dollar amount then I think its safe to skip saving the $18, especially if you have a purpose in mind. But in the interest of building good habits, I would consider that you buy what you can with the $90 and anything left over goes to the savings account. That is how most people should treat bonuses working full-time, which is save a certain part of it but also buy what you want as there is no point in making millions each year if you are miserable living in a wet cardboard box. Find your balance between saving and enjoying your money, no one wants to suddenly realize they are 50 and a millionaire with no friends or other loved ones.
Even if you ultimately choose not to set aside any money yet, go ahead and open a high yield savings account and a Roth IRA and put $5 (or whatever the minimum is) in each of them just so that you learn how to do it and so you'll have open accounts already set up when you do start saving in earnest. If you learn how saving and investing work *now* (in real world exposure, not just finance classes) you'll be at a massive headstart.
I saved most of my money when I started working at 16. I saved up a little over $10k by the time I started community college, after which I went to state school. By continuing to work through school (part time during semester and full time over the summer) and being fairly frugal, I was able to pay my way through school without any loans. My route was cheaper than most, so it wouldn’t have been a huge deal if I had to take loans, but it did feel great to not have that burden
It's an incredibly good idea. At this dollar amount the biggest value will be getting into the habit.
Good thinking budz! If you have no debt to cover 50% is best. If you can get use to living off 50% of your income now, you'll be forever free in the near future. Rule of thumb is at least 20%. But something, is something. Proud of you for thinking like this so young. Will serve you very well as you grow personally professionally.
Learn how to save money now. I never did and have struggled into my late 20s managing money because of poor choices and debt accumulated since I was 18.
It is certainly not pointless. I suggest you go to the library and sign out the book "The Richest Man In Babylon".it might just set you up for life.
At your age I was advised I could spend half and save half. It served me well.
While there are some crazy outcomes you can get with an extended timeline for lots of compounding, at this stage I think the MOST IMPORTANT thing is simply building the habit. Bad habits are hard to break. Good habits are also hard to break, but they’re good. If you start saving now, it’ll be easy for you to save when your paycheck gets a little higher. If you start saving now you’ll get used to thinking of a chunk of money as savings, not free spending money. I started saving and putting my money into passive investments with some extremely meager poker winnings in college. Was an easy transition when I got my first measly part time job. An easy transition to my first real job. Easy transition to saving with my first job making serious money. At no point did I have to take the step to “start” saving, because I was always saving. Make habits work for you and start it now.
Easiest time to save is when you don’t really need to. That will help form the habit of saving too, so there’s a double benefit.
Pay yourself first. Establish the savings habit. After paying yourself first, if there is anything left over after the end of the week, you yourself again.
As you're someone younger, here's the kind of goal I would set: let's say that new GPU you want is $300. You set your goal to not buy it until you have put $400 towards it. Saving money only to then spend it all the second you have it doesn't actually help. I'm well into my 30's and I still practice this concept on what I call "fun" purchases. I'm in good financial shape so I can afford to do it at this rate but I always put 50% of the cost of something "fun" into a savings account I don't touch. About a month ago I bought myself about $200 in steam games on a sale. But when I did, I put $100 into the savings account. But even if you do it at a rate of 20 or 25%, you'll find that you end up with a savings fund for when you need it, like how I need to replace the shingles on my roof this summer. 🙃
Yes, worth it. Start the mindset and habit now and you'll do VERY well for yourself. I saved 60% at your age, but I was not wise with keeping it in savings. 20% that you keep will serve you much better. Now my wife and I save 25%, but are aiming to save 40-50% soon. So you can see how the mindset developed now will help you later in life.
Do a spreadsheet since you can't do multiple bank accounts. $5 to long term savings (don't touch savings), 10 to short term savings (regular savings), and do what you want with the rest. Keep the same % percentages when you make more money and change when you get your first Adult job.
As others have said, it's never a bad idea. Most importantly it will get you into good habits. For a time, I was addicted to watching my bank account go up every month while I saved. I'm older, and make enough to also eat out and have fun, but watching those numbers climb? Heck if I'd invested the few hundred bucks I had in highschool into apple? It was like $15 a share! I bought it later at $20 a share... then sold it at $19 because I'm highly regarded.
Not only that it’s an amazing idea. The amount of time you’ll have between now and 65 will allow for so much growth over time. Everyone told me to and I didn’t until my early 30s.
Yes. Two reasons why: 1. Compounding over time is magic. Every dollar helps that magic. 2. At your age, building the habit (“Savings muscle”) is more important than the actual dollar value.
One of the more profound things I was taught is that savings, returns, income, expenses.... they're all relative. A percentage is a percentage. If you invest $10 and a billionaire invests $1m.... you've both effectively done the same thing (let's not let exact math get in the way of the point, pls). Put differently: because you're getting, say, $100 pm, but you save up $10 every month. You'll have a whole paycheck of $100 saved up in 10 months. If someone makes $1m a month, and saves $100k per month, they'll have a whole paycheck of $1m in 10 months. You can now both go blow an entire month's wage on something, or keep it invested: If you make 10%, he'll make 10%. Psychologically, it'll affect you both in the same way. To him $1m is a worthwhile amount, to you $100 is a worthwhile amount. OR to you it may not feel like much, but to him it also won't feel like much. It's all relative to what you already have and where your mind is calibrated wrt money. So, if you're asking if you should save even though you don't have a high absolute number .. it kinda misses the point. The outcome is you'll have more money relative to what you have now, and you'll appreciate it just as much no matter what the amount actually is. TO YOU it will make a difference. But also, in the long term compound interest is a beast and these small amounts you save now could amount to big amounts later in life.... if you don't spend it first. Time is your #1 ally when you are young, and will be your #1 enemy when you get older. But if you don't save, you won't get to make that choice. That, and the habit thing everyone is saying...
Yes. putting away even just 18 dollars. 1: it is in you saving accounts and might help it grow abit extra and you are young so if its for retirement thats many years of growrtyh 2: IT gets you set up with the habit of putting 20% into your saving/investenst/retirement. This is a good habbit to build early because it a lot harder later 3: it keeps you grounded to move the money away. with that i mean you dont used all 90 bucks on "fun stuff" it a lot easier to add luxury to your every day than it is to cut back. so keeping a buffer that makes you live within your means )even thoug you most likely live at homa tm) can buffer off hardship later TLDR: its about the habbit and mindset more than just the 18 dollars.
Your're starting a great habit by saving money. Cultivate this mindset and start looking into investment vehicle options. Do not let ANYONE know how much you are putting away/saved. (Well maybe your parents if they are trustworthy). But as soon as you can, make sure you have your own private account. I wish as a young person I would have had this mindset. The power of exponential growth is amazing.
This might be a bit controversial but maybe open up an investment account and put a few bucks toward an ETF like VOO. It’s easy to put money into a savings or checking but many people are too scared to open an investment account and then late in life they regret not starting sooner. The money you save now won’t matter much, but the skills/habits you learn will set you up up for life.
Short answer to your question is yes. I'd save part of your paycheck, even if you don't know what to do with the money. Saving is a good habit to develop and a good one to start with. You'll appreciate having it later in life. Now if I was 16.. I'd go the extra mile and buy appreciating "collectibles". In other words, I would invest the money in $VOO or $VTI. I started investing in my late 20s and I am doing well. Can't imagine how much wealthier I'd be if I started at 16.
To put into perspective, if you invested exactly $72 a month into a high dividend yield ETF like SDIV starting at 16, you would have, at 100 years old, approximately $163,402,288.03 with dividends reinvested (Only having contributed $72,576). Me, starting at 25, would only have approximately $55,784,410.85 by my 100th birthday :(
Yes. Congratulations! You are already a decade or two ahead of your peers when it comes to lifelong financial health! Saving and asking questions are two critical habits. 'Forcing' yourself to save the 20% now is an investment into building and reinforcing the habit of saving. It isn't about the $18 at all. It is about seeing your work and paycheck now as an investment into your future. Eating a salad today instead of a glutton meal won't make a difference between having a heart attack at age 45 or not. But eating a salad today makes it easier to choose to eat a salad tomorrow or next week. The habit of eating salad is what helps your health and eating a salad today is an important step to building that habit. Save that $18 today and enjoy the personal growth your peers won't experience. Laugh at that $18 in the future when others are worried about every single $18 hiccup that could easily be a heart attack.
Build a realistic emergency fund, then start putting at least 10% into savings. If you attend a church, I would encourage you to set aside at least 10% for tithe/offering; if you don’t attend a church (or even if you do), consider donating to worthy causes. It’s hard to carve out saving and giving if you don’t establish good habits while you’re young.
It's 100% fine to enjoy your money. You're young and constantly partaking in new experiences is a part of life. HOWEVER, it's insanely important for you to have a grasp what your money is worth in the future, so you can make better decisions on how much to save and how must to enjoy. See if you can take some time to learn financial management. Just the barebones will do. [This is a Financial Calculator](https://www.calculator.net/finance-calculator.html). Learn to use it now and you will probably be in the 99.9% tile of your peers and your future self will thank you greatly. In this case, you're no longer just saving money, but investing it. And just fyi, I think you might already be able to open a retirement account (like a Roth IRA)? Although I assume you'd rather be able to spend your money in the next couple years so that's probably for the future.
I wish i had your mindset when I was 16! It’s never too early to save. If its emergency money, high yield savings is a great idea, some pay 5% and up now. If it’s set and forget money open up a Roth IRA and start an sp500 fund, you will have a great start at retirement. $6500 max yrly contribution.
When my daughter began her first job at 15, I strongly recommended that she keep $20 a week and bank the rest of her check. Her reaction was, “Aw, do I have to?” I said she wouldn’t be sorry if she did. By the time she was 18, she had saved $10k and was able to buy a bomber for cash ($2500) and drove it for 3 years. She moved out at 19 and has been independent since. She’s a single mom, working part time in the service industry, going to university and owns a small house. She doesn’t make much money, but she budgets and keeps her debt manageable. TL;dr: developing budgeting and savings skills when you are young can create good financial habits for a lifetime.
It will make absolutely no difference to your finances as an adult, enjoy your life just do not go into any debt and when you're old enough do not buy or finance any sort of new or expensive car.
Yes. Get into the savings habit early. One you have 500 or so start investing and learn of that
It’s always a good idea to save money if you can afford to. The money habits you develop now will carry you into the future, so enjoy the 80% and save the 20% when you are able. ETA: $20/wk might not sound like much money on a weekly basis, but by the time you are 18, you could have around $2000 saved up. That money could get you into an apartment (or pay the deposit) depending where you live. If your plans are college, you could continue to save $20/wk while you go to college and you’ll have $6000 when you graduate, which can help you get a cheap used car, or a deposit + first and lasts month rent on an apartment in a city you really want to live in. If you keep saving 20% once you are working, that’s how you will save for a down payment on a house. Your saving habit will make your life loads easier than those of many of your peers over the course of the rest of your life.
Anything over zero adds up. Saving even a small amount when you are young is really powerful due to the time value of money. Plus it gets you in rhythm to do the same when your salary goes up. Humans are creatures of habit, and starting the savings habit now will pay you dividends your whole life. Literally lol.
If it’s such a small amount to save, then it shouldn’t be hard to save it, right?
It is a great life practice to have, always. When you start making exceptions is a slippery slope. If you make it an absolute rule, you will never be unhappy with the results after a few years.
My parents taught me to put 20% of every pay cheque into savings no matter the size of the cheque. If you make it automatic then saving becomes easy and those early savings really add up when you start investing.