Beware that you do not lose the substance by grasping at the shadow. -Aesop
A lot of teens these days have an allowance, or they receive money from a part or full-time job. They usually don’t make a lot of money however they spend what little they make on new shoes or new clothes or whatever the latest fad is. It’s not uncommon to ask a young person to describe success and they will describe it as having material things, a nice car, jewelry, and the list goes on. But ask the same young people what they know about saving…and they know that they should…but that’s about it.
As a teen myself, I must admit that my interest in saving money would not exist if my parents hadn’t insisted that I do it. By that I mean I am no different than anyone else, when I have money I usually want to spend, or when I know that there is something that I would like to purchase I tend to set a plan to get the money expressly for that purchase.
Based on what I have learned… can I give you a tip on what you should do with your allowance, or any money that you receive? Two words…Savings account.
Savings accounts are accounts that you open to deposit or save your money, and they are usually operated and maintained by places such as Banks, Savings and Loans, or Credit Unions. These places pay you interest for allowing them to keep your money there.
Some Savings accounts require you to keep a certain balance, or certain amount of money in the account at all times to keep the account open, and some of them charge a fee when you go below that required amount. Some people might think that is hard, but keep in mind the goal is to encourage you to save money…not spend it.
Every young person should have a savings account (everybody should for that matter.) It is always a good thing to have a savings account. Having a savings account helps you become able to buy the bigger things you may need in the future, like a car or even a house payment. This is really a great way to become wealthy.
Just by putting away a small amount at a regular basis a person can be well on their way to becoming a wealthy. Even saving as little as $20 a month you could increase your money with added interest from a savings account. For example let’s assume you open a savings account that pays 6.5% interest, you faithfully deposit 20 dollars each month what would you get in:
- 2 years, you actually saved $500, you earned 36.66 in interest giving you a grand total of $536.
- 5 years you actually saved $1,220, you earned 288.79 in interest giving you a grand total of 1,448.79
- 10 years, you actually saved $2,420, you earned 1,004.55 giving you a grand total of $3,424
- 20 years, you actually saved $4,820, you earned 5,114.68 giving you a grand total of $9,934.68
As you can see by twenty years you have more than doubled your money. Imagine what your savings account would look like if you decided to save more than $20 a month, or you were receiving a higher interest rate.
Obviously by looking at the example you should see that the key is in being consistent and by saving for as long as you can, the longer you leave the money in savings the more you earn from the interest.
I’m not saying that you have to put all of your allowance in savings…where’s the fun in that? But I am suggesting that the more you put away in savings today then the more you will have to enjoy later. It is really easy to do and that my friend is a Wise choice.
Happy Savings!
by mmogmillioniare
About mmog millionaire: MMOGMillionaire, is one of the co-founders E.M.M. Enterprises, a Real Estate Investment Company based in the Midwest. His entrepreneurial endeavors include, Marketing and Development and Sales at an International Trade Company, A budding Wholesale EBay Business, Several Online Shops and Bookstores. MMOGMillionaire is constantly testing and trying out new ways for young people to make money, his goal is to share this information with young people worldwide.
Filed under: Creative Ideas, Feeding the Pig, Life and MOney, Tips/Tricks, Young Investors, kids and money, kids and stocks, young entrepreneurs
