How to Save Money for Youngster Fast
With the rapid growth of gadget and technology, it has been difficult for most of the teenagers to save enough money for early investment. In this post, I am going to share with you – How to Save Money for Youngster Fast enough to start investment as early as possible.
With the advancement of technology and gadget, it creates a new trend – compulsive buying and incurring of debt. Most youngsters can’t control their spending and hence fall into serious financial debts.
There are a lot of self-help reference books on the shelves at the book stores and not all of them are meant for young adults. This is a big mistake that most people make. Other than that, there are some articles being shared on internet but they are too generalized and probably will not work for young adults.
I understand that owning a credit card is a must nowadays due to its convenience, especially purchase items online (e.g. flight tickets). However, most of the credit card owners tend to spend more than their means.
Have you ever noticed that it is more painful to pay cash than using credit card? Yes, I feel the same way and it has been proven in some studies. It is essential to get intimate with your money if you wish to save more money. In order to develop a habit not to overspend every time you go out – keep your credit card at home and bring only cash with you. Over time, you will spend less as you feel bad seeing your cash draining off from your wallet every time you spend.
I am still doing it until today. It is a great way to help you to keep track what you spend and it allows you to identify how much you are saving from your daily allowance or monthly salary.
Keep track on how your money goes also allows you to think if you actually spend money on the necessary or something that is not. From there, you could evaluate your and plan ahead your future spending.
I have written a post on how to keep track of your spending and How to Spend Money Wisely. Give it a read.
Open the Right Account
A lot of people do not realize that one needs to start saving as early as possible. Some started at the age of ten or early with the aids from their parents. If your parents have not done this at your young age, then you should start saving right after getting your first salary from your part time job.
Right from the beginning, you have to remember that you should make your money to work and earn for you. Instead of getting yourself the newest mobile phone or a newest gadget, you can perhaps save them for your short term investment plan.
Always remember this – The longer you save, the more you save. The more you save, the more you will grow your wealth.
Now, we all know the importance of saving. However, we have to understand that putting your money in a normal saving account is not ideal. The interest rate is so low that we cannot catch up with the inflation. If you are not familiar with investment at the beginning, then you should put your money in a better saving account (e.g. Fixed Deposit Account) that yields higher interest rates.
The best thing about FD Account is you have to either put a fixed amount of money into it regularly or you can’t withdraw the saving until the given maturity date. I wouldn’t call this as investment but it is a better option to put your money aside and hope that the value of your money in the bank is proportionate to inflation rate.
This is the best recommendation from me to all youngsters if they want to save (invest) their money. I set aside $100 when I started working as a part timer when I studied. I regularly invested $100 every month to unit trust and I kept track with my invested money with my agent. Although it is a small amount, it yields extra income over time.
Market performance fluctuates. Whenever the equity market is high, I buy less unit with the same amount. Conversely, when the market is low, I but more. In long term, I gain much more unit in the lower price range.
It is essential to save before you spend. Make sure certain amount of money is set aside for saving every time you earn some money. Let’s say you earn $300 per month, then try to set aside $200 aside for saving and use the rest of topping up your phone credit or meals at schools. This definitely will help you to develop a regular saving habit.
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