There is no “golden rule” on how you should save money. The best advice that we can give you is to find something that works for you, and to start small. When you start saving as a teenager you have time on your side. You can work your way up and be more comfortable. If you just dive in the deep end, you’ll be likely to get discouraged and stop saving all together.
Create a Savings Plan
Yes, we recommend you should start small and work your way up, but be strict on yourself. Take the time to make a plan and stick to it. Your savings will add up quicker than you think if you get yourself into regular habits. One great way to work is in time increments, say 6 months. Make a 6 month plan to save $40 each paycheck. If you get paid weekly that will add up to over $1000 in those six months! If that’s comfortable for you, consider upping that amount to $45, $50 or whatever is comfortable. It’s plain to see that small amounts can add up quick.
Money Saving Tricks
There are tons of savings tricks out there that you can try to help you save money as a young adult. Here’s a closer look at just a few of them.
The $5 Bill Collection
This one doesn’t involve any bank accounts or fancy calculations, just cash and an old pickle jar. The idea is to identify a certain bill, like the $5 bill, and vow to not spend them. Every time you get a $5 bill you put it into the jar. The obvious downside to this savings trick is that using cash for purchases is becoming less and less common. You can do the same thing with any other bill, or all change.
Find something that you’re extremely passionate about with a big price tag. Maybe you want a certain car, the latest iphone, or a new game console. Then split it 50/50 (or better) with your savings account. You’ll be more likely to save if you’re working towards something that you really want.
Direct Deposit Savings
If you’re job offers direct deposit – take advantage of it. You should set this up to deposit a set amount or percentage of your income to a savings account. Out of sight, out of mind – it’s like the money was never even yours in the first place. That is, until you use it for a big purchase years down the road and can avoid putting yourself in huge debt.
Learn to Cook and Pack Your Lunches
Going out to eat is the arch nemesis of your savings account. Make it a treat and not a regular occurrence. At an average of $10 per meal, even just 4 days a week you’ll spend $2080 over the course of a year. Save it, don’t eat it!
Track Your Spending and Your Saving
Knowledge is power. Being aware of your spending habits will help you adapt to changing times, make better decisions, and get into a regular rhythm of saving. Make a log of your spending and review it each month to see where you can make changes to improve your money management.
If you don’t have a bank account yet, consider opening one. Have you ever had cash just burning a hole in your pocket that you spent on something you regret or didn’t really need? We all have. Having your money in a bank makes it less tempting to use on impulse purchases. Not only this but most banks have apps and online banking, making it easier for you to track and review your spending.