how much should he save?

[crosses]

I have a grandson that is 15 years old and working at a local grocery store as well as doing some cleaning duties at a local hair salon at night. He is earning about $150 a week. he asked me how much I think he should be saving and I wasn't sure. How much would you recommend he save of that money?

[karnic3881]

As much as possible! You often hear the recommended 10%, but I think it's better to ask your grandson what his goals are. Is there anything specific that he needs (or wants, but I am more about needs)? If so, he should figure out what that goal will cost, and estimate from there how much he should save. Ideally, if he can take the amount needed for his goal, plus a little extra (just so some $$$ is left over when it's time to pay for that item), that would be great.

[obi_positive]

If he has any expenses, pay them first and save all the rest. If he has a goal of something he want to save for, that might he a motivator to start hoarding.

[Lori63]

My 16 year old works three different jobs-one at fast food, and two sporadically that he usually does on his two days off per week. He will cash his paycheck, then put the others in savings until he needs/wants it. Basically right now his only expenses are gas for the car and Skittles. He is saving for a car stereo-he already has plenty saved, but is hesitant to spend it since his main job ends in a few weeks.

[BAGAGT1]

I think the real question is, how much should he spend? At 15 his expenses should be very small, therefore, he should deposit as much of that as is possible and save it away for later.

[jmjj215]

I would show the difference between long-term and short-term (car stereo) savings. Long-term shouldn't be touched. I would want to make sure he understood that a good percentage (25%?) should be long-term when his expenses are so low.

[Fern]

Well, he's 15 now, so i'm sure he'll be wanting a car in a year or so. That's a great goal to start saving.

You're in a great position to encourage healthy liftime savings habits in him. Encouarge him to put aside $100 a week toward the car, and let him keep the remaining $50 for "play $$," to take out dates, spend on food or whatever. He should be able to enjoy some of it, too, or he won't want to stick with such a stringent savings plan.

[Tree0164]

What are his goals? A car... have him save towards that. Probably atleast 50% of his pay until he has a decent down payment.

College as much as he can.

Teaching the responsibility of money is so important!

[Lori63]

Originally Posted by Tree0164

Teaching the responsibility of money is so important!

I agree. Michael first got a job at 14, and he knew then that when he got his license we would 'give' him a car (a '94 Corolla), but he had to pay 1/2 the insurance and for all gas, oil changes, etc.

College- he wants to go to a smaller school, and most of the ones he's looked at are private, so 4 times as expensive. They for the most part give you alot of money, but he knows he will have to chip in or get loans. We will 'help'.

[Snoopy2645]

Well when I was that age I was saving almost all of it because at 15 I had no expenses so that is my suggestion for him too. Until he gets a car he wont have many expenses & even then he wont have much for expenses. Honestly at 15 my main goal was to save enough so I could buy a trailer or house at 18. I almost made it I bought it at 19 but my goal was to get out of my parents house!!!

[marjorie]

I saved some babysitting money from the ages of 12 to 16. I was unexpectedly invited to England to visit my sister and her then-new husband the summer I was 16. I ended up staying for a month. No way to replace that kind of adventurous experience, and it was totally unplanned. I couldn't have done it without lots saved, though. I might show him some of the financial planning books that show how savings now could mean retirement later. Just a thought

[mbhunter]

I remember when I was in high school, I had a paper route, and my mom laughed at me when I said that I'd save 10% of what I made. She said, "At least half, no question!"

Looking back, that made a lot of sense. What expenses did I have? Nothing! I didn't have a car, and I didn't really have any financial obligations (I realize that some people have a LOT of financial obligations at that age), so the paper route money was essentially all discretionary income.

Kids should be taught to save -- no question. How you teach them is another matter. You can force the issue, but there's also merit in letting the kid blow all of the money on silly stuff. When the time comes around for a big purchase (like a car) then you can remind them of how much money passed through their hands over the past X months/years, and end with the kicker: "If you'd have saved even 20% of what you had made, you'd be able to buy that car." That's a harsh way to teach, but it would probably work. Probably a good medium is to remind them -- beforehand -- that they need to save X dollars for that big purchase.

[crosses]

Thank you all for the advice. I think I'll sit down with him and we can see if there are some things that he wants in the future. I think her really wants an ipod, but I think he's hoping to get that as a gift. Then he will need some money for music. I will see and then try and get him to put aside a good portion of the money too.

[mom-from-missouri]

I would say at least 50%. Take him to your banker. Most bankers love to work with a kid and explain CD,s and saving accounts and interest. Let him have some one on one time with your banker (makes them feel more grown up) and then ask him what he decided to do with his money.