Tips to Save Money
Did you know that teenagers that start saving are saving around $290 each month? Which amounts to a whopping $14,000 over the four years of high school!
Pretty amazing, right?
Right and it is easier than you think. We have laid out a few steps for you to follow as you embark on your savings journey.
Step 1: Start Earning
Before you even think about saving, you need a steady stream of income. You can't save if you don't have money coming in. For adults with jobs, this is a given. But for teenagers that are trying to balance school with extra-curriculars, having a job is tough. However, saving smart is not about the amount of money you make but what you do with what you earn. Making $100 a week part-time as a waiter or cleaner for example, can add up.
Step 2: Plan
Planning is key. Learning how to save money in college or how to save money for a house is tough but sitting down, researching and then making a plan to achieve this goal is the only way you make it happen.
Those that are diligent with their savings know why they're saving and how they they are going to do it. Start by asking yourself exactly what you are saving for. For teenagers that save, over 40% are saving for college. Having a clear defined savings goal ensures you stay disciplined to put money aside and motivated to earn. Simply telling yourself you're going to save in hopes of 'having a lot of money in the future' is too generic. Be specific.
Step 3: Make it easy
If you can reduce the effort it takes to save, you're giving yourself a better opportunity of sticking to your savings plans and achieving those goals.
Here are a few easy ways to save money:
- If possible, have a portion of your paycheck sent directly to a savings account. This forces you to both save and live within your means.
- Start saving less, but more often. Like many things, it is how we mentally frame a decision that determines the difficulty. For example, having a massive cut of your paycheck taken out each week makes it tougher to save long-term. You do not want to save too much, too soon. Instead, start saving little and often. Learn to walk before you can run. Over time, you will become more adjusted to living frugally and can adjust your saving habits accordingly!
Step 4: Invest
At this point you have successfully saved up some money and you are starting to wonder what you could do with that money to make a return. Put it in the bank? Low savings rate. Put it all in Bitcoin? Potential to lose a large sum.
There is no perfect way to approach investing. The greatest investors of all time would agree.
The question you must ask yourself: What type of investing makes sense to me?
Have a look at your current financial situation and make a judgement call. You could save half and invest the other half, little and often, for example. Have a look at our Loved return calculator here. It will give you a better idea of the potential your money has to grow.
Learning how to save money fast and invest accordingly is tough. Loved knows this, we really do. That's why we're here in the first place, helping you and your loved ones grow and prosper financially. Our investing app is designed to help you take that leap with as little as $5 and invest little and often with your goals in mind. By investing often you get the benefit of dollar-cost averaging, so the price you pay is averaged over time as stocks rise and fall and you don't get tricked trying to time the market.
If you're curious, open an account and put your savings to work.