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I am a 16 year old student. Trying to save for a car currently, which is hard, for I have to buy my own lunch during the week which can run me around 10$ a day. I make either 40 or 80$ a week straight cash from my job. I only work 2 days a week. Starting in June I'll be working roughly 7 hour days 5 days a week at minimal wage. If you could help me with a savings plan I would greatly appreciate it.
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Pack a sandwich or leftovers from home for lunch, immediate $50 per week improvement to your bottom line. -
$10 for lunch is steep for anyone let alone a 16 year old. I'm 29 with a decent income and I can count on one hand how many times I paid $10 for lunch this year. You have to start packing a lunch. If you haven't already, ask your parents if they can take you to a bank and set up a custodial checking/savings account with you. There are many banks or credit unions that have low minimum balance requirements and minimal fees. Some even run promotions where they will deposit $25 or something just when you join. Given that you are a minor and a dependent of your parents most of your needs should be met by them. Other than using some of your earnings for entertainment spending you should be able to save the rest. The more you are willing sacrifice in entertainment spending right now the sooner you will be able to afford a car. If your weekly take home is $170 a week and you bank $150 and only give yourself $20 to spend each week you could afford a $2000 car in about 14 weeks.
An important concept of saving that you should take with you long after you move on from your minimum wage job and graduate high school is "paying yourself first". Paying yourself first means that when you get paid the first thing you do with your earnings before paying any bill or debt is to pay yourself in the form of savings. People that pay themselves first are less likely to live paycheck to paycheck or rack up a lot of debt. You will know you are winning with money when you no longer know or care when you receive your paycheck because you know you have lived on less than you made and the money is always in the bank.Comment
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Brilliant to start a savings plan age 16. Good on you for having initiative to find work part time during school year and 35 hrs a week during the summer. Do a bit of research to locate an institution that pays you for opening a new account as every little bit helps. A Credit Union is usually a good bet as they have no cost savings & chequing accounts. The downside is their small numbers of ATMs. There is a fee for using non affiliated ATM machines; it's important to avoid fees and charges against your account. Read the small print and verify how much you will be charged for each transaction.
If your summer employer has automatic deposit, use that benefit. I suggest you give yourself an allowance, decide how much you will spend each pay and when the sum is gone, spending stops until the next pay. I don't know your lunch room facilities but if possible, take whatever leftovers remain from the previous night's dinner to reheat in a microwave. Failing that take a salad box with some chopped chicken, beef, fish...whatever you'll eat. Better yet, invest in a wide mouth thermos to hold stew, casserole, baked potato + topping available, chilli + rolls or whatever you like.
Home made food costs half what is paid in restaurant or take-out and often healthier. An entire ready-to-eat grocery store, Rotisserie chicken and bagged salad or coleslaw costs less than $ 10. as does Cheese slices, quality loaf of bread + an apple or orange and makes more than one meal. Learning to make a few meals is an important skill for a 16 y/o.
The 1st lesson in money management is to understand and differentiate between Savings, Needs and Wants. If you Pay "Yourself' 1st, you have automatically saved for Number One...You, at least 20%. 'Needs' suggested 50% covers items you are obligated to pay. Once you have a car you will need insurance, operating [gas] and maintenance [oil change and repair like brake pads]. The final 30% category is 'Wants,' entertainment, restaurants, fun and choices you make.
Money management is a learned skill, it takes practice, concentration and determination somewhat like driving a car. If you don't have a plan or route you don't get to your destination.Comment
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