Learning how to save money early in life is important! Every young saver is unique, but most people who save regularly as adults developed the habit as a kid. The first step to getting started on the right track is opening an account at the credit union! Click here for details on opening a youth account at PSCU. Whether you have a lot or a little, these tips will help you start saving money.
Tip 1. Start at the finish line
To begin, start at the end. Yes, that sounds weird, but you need to know what you’re aiming for before you get started. Are you saving for college? Maybe you want to buy a car. Be clear in your mind about your goal. Post a picture of it where you’ll see it every day to remind yourself what you’re saving for.
Tip 2. Keep track of your spending
A lot of adults panic at this step, but it’s not hard. Begin keeping track of everything you buy in a notebook or on the notes app on your phone, adding up the total at the end of the week. You can also use an online budget app, like Mint.com, to keep track of your expenses and totals.
Tip 3. Make a plan
To save successfully, your expenses should not be greater than the total amount you want to save each week. Let’s say you want to save $35 every month for college and your allowance is $15 a week. That means you’ll want to save $8.75 each week. But if you spend $10 every week on fast food or snacks, that’ll leave you with only $5 to put into savings. If you spend less than $6.25 (15 – 8.75) per week on snacks and put the rest in savings, you’ll make your monthly goal.
Tip 4. Watch Your Money Grow
When you save your money in an account at the credit union, you can earn interest (also called dividends). The credit union pays you for keeping money in your account, plus you earn interest on the interest you’ve already earned, that’s called compound interest. The higher the interest rate, the more money you’ll earn.
So, you see, if you promise yourself to put a bit of money into your savings account every week (and don’t take it out), you’ll watch it grow so fast, you’ll soon have enough to pay for something really special! Here’s a calculator to help you figure out how much you need to save to meet your goals: https://www.interest.com/calculator/savings-calculator/