Saving up Those Dollars!

The first step to begin investing is coming up with cash to fund those investments. As youth, money is often very limited and quickly spent when acquired. Understanding the value of those small sums in providing the basis for long-term investments is a key step. Here are some tips to help you save those dollars here and there - they really do add up!

Saving up that small change. This is one of my favourites, as it is easy and effective. Try setting up a piggy bank and saving up all the coins you get for a month or two. You will see they can quickly add up to a significant sum, on the order of a couple hundred bucks or more over the course of a year. Often people tend to view change as being somewhat useless and spend it extra carelessly – this is an incorrect mindset for young people who want to establish smart and long-term investment strategies.

Use cash over credit cards to spend less. While having a credit card can be extremely useful, it tends to make young people dissociate the value of money as credit cards provide immediate satisfaction for a cost down the line (resulting in impulse spending). Using cash to pay for expenses is a great way to make sure you are aware of the money you are spending. For this reason I tend to prefer using cash instead of credit or debit cards.

Keep track of your spending. Keeping a solid tab of where you are spending your money can be a good step in realizing where it’s all going (and looking for where to cut back). While I prefer using cash, it is true that paying by credit card does passively do this for you - although I do not find this service outweighs the cost. Either way, keeping track of spending at least for a short period of time (~1 month) is great for finding leaks.

Getting a job (and putting some aside regularly). Many of us will start working our first job sometime during our teenage years. We will have that exciting feeling of receiving our first paycheck and feeling richer than we ever have. While the temptation to go spend it all the following day (or the same day for that matter) may be strong, you have some key advantages to save money as a kid: you likely have very little expenses if you still live at home (probably free food, no car payments, no rent, no tax, etc.) these are saving benefits that you may never experience at other moments in your life! While as a teenage your motivation to go to work is likely to spend money and enjoy it, having a goal to save $x/paycheck is a great strategy that adds up and builds good saving habits.  

Assessing your phone plan. Realizing how much your phone is actually costing you per year may be astonishing. I’ve had friends who were paying in the range of $100+/month for phone plans, while I was playing around $20/month. This represents a yearly difference of a whooping $960! That is simply massive for smart teen investors looking to put aside their limited cash. Be critical about how extensive of a phone plan you really need (or if you need one at all), perhaps look around at other companies or call your company and discuss with them how you could get better value out of your plan to meet your specific needs.

So, can saving money really add up?

If you save 100$/year from gifts you receive at birthdays/Christmas from your 12th birthday onwards as well as saving on average $100/year from saving your loose change, returning cans and bottles and so on plus assuming you can save 50$ off your weekly paycheck for 4 summers of work leading up to turning 18, you would have $3,800 put aside! And now being 18 you can take that nice sum and get to serious work with it. This is a very realistic goal.

Hopefully you have gotten some ideas and motivation to start saving. While your investing potential may be limited (in some cases) until you turn 18, your ability to start saving is definitely present and significant!

Share below any other money-saving ideas you have!

- Yinvestors.

keywords: saving money, how to save money, ways to save money.