How to Manage your Savings

Devon Chambers

As a teenager, the thought of saving money may linger in the back of your mind. However, that thought may never be acted upon as a student. It is possible that you spend your paycheck right away. Maybe this money is spent on dining out, purchasing new clothes, or even on new and upcoming video games. A portion of your paycheck may have to be given to parents for car insurance as well. All of these transactions do add up, but there are ways to save money to make sure you can use it towards other important expenses. 

There is no doubt that teenagers spend money on things they do not necessarily need. Renolon claims, “adolescents spend an average of $2,600 per year on food and clothing.” Say you buy an Aroma Joe’s rush every day before school, costing roughly $4.50, and there are 180 days of school. That is $810 spent on an energy drink over a 10 month time span. Assume you made $11 an hour. That would be equivalent to 74 hours of you working in order to make that $810. That is a large sum of money that could go towards college funds, investing, or even put towards retirement savings. As cliche as it sounds, it is never too early to start saving. Merrill, owned by Bank of America, states you should have at least one million dollars or more by the time you reach retirement. 

One way to decrease the amount you spend is to stop buying for the name. For example, Lululemon sells mens shorts for $70. You can find similar, high quality shorts from Old Navy activewear for a fraction of the price. Champion and Nike are popular brands for sweatshirts, and as you can assume, they are pricey as well. You can find simple, classic sweatshirts at Target that will certainly keep you warm on cold days. Now onto eating out. It is totally okay to treat yourself once in a while, but you would save yourself a lot if you are able to eat at home. $20 worth of groceries could last you a few meals, while one Chick-Fil-A or Panera Bread meal could cost you the same. 

There is a common saving method known as the 50/30/20 rule. Marko, also known as WhiteBoard Finance on Youtube says, “this divides your paycheck into 3 separate categories as follows: needs, wants, and savings/debt repayment.” Needs are something that you depend on, or cannot live without. This means 50% of your pay goes towards insurance, groceries, utilities, and housing. Then, you use 30% of your paycheck to put towards your desires such as hobbies, shopping, and dining out. The last portion is quite simple. WhiteBoard Finance mentions that this 20% is used for, “6-12 months worth of emergency funds, retirement, credit card payments, and student loans.” This method is only an outline, meaning this may not suit everyone depending on situation, age, and/or income. 

There are so many ways to save money. However, spending money has become easy with debit cards and contactless payment. This opens the door to impulse shopping. As tempting as a clothing item or product may be, you should consider when you will use it, and how long you will use it. This will save you money in the long run, which will allow you to invest and save for other aspects of your life. Even transferring as small as $25 every paycheck will add up for short term and long term goals.