How to save up money at this age.. any suggestions

[avalystl]

I am 17 years old, ever since I got a part time job i began saving up, I opened a bank account [savings and checking] in my savings i have about $2000. Sadly I'll be using quite some of that as well as other money i'll be receiving [still working] for college when I enroll this Fall.
As tempting as it is to buy cute clothes and go out with friends 24/7 i'd rather save money that would potentionally help me in the future.

Since i was little i remember crying hearing my parents argue and fight about money.. my mom put us all in debt of over $100,000 yes not even lying. To this day my dad is the one that is paying the price [literally] monthly and hes gonna die not debt free.. sad to even know that since he had nothing to do with my mom's addiction. Anyway, ever since these traumatic memories, I did not ever want to experience that,put my future kids in pain nada. So unlike a majority of my friends, i know how to budget money right and save up. I save up about 80 percent of my pay check most the time.When i'm in college i plan on depositing at least 50 per month, so by the time i graduate i'll have another 2 grand and some more..

I am predicting that by the time i graduate college with my bachelors I will have to owe about 25k in student loans..

I'm planning to save up for a retirement account, some investment/savings interest [like a money market fund, etc]. I don't want to sound creepy since i'm no where near getting married but after that i plan on saving already for a wedding, future house payments, new car, etc.

When is the best time to open a retirement account you suggest? Maybe when I hit 20? What other advice and suggestions could you give? I really want to inhale all this knowledge in me so I don't grow up making financial mistakes.. especially being raised around not the smartest decision makers..

I am going to major in Accounting. I know i'll have to work very hard to get a promising secure career for my future. I want to get a good pay job right after i graduate college.

[GenWhyJ]

Hi there
You sound like a smart person for your age. I started working full time at 17. In the beginning I would spend my entire pay within days. When I was 18 I started to get serious about saving. I'm 21 in a weeks time & have $19,600 so far, so starting from an early age certainly makes a difference.
In regards to opening a retirement account, the sooner the better. I'm not sure if you are referring to superannuation. If you are your employer should have opened one for you when you commenced employment. In Australia they have to contribute 9% of your weekly wage if you earn $400+ in a calendar month. You can also make contributions via salary sacrifice. The government will match dollar for dollar up to $500 a year.
I certainly think its worth contributing yourself. I haven't yet so have only accumulated $7,000 In 4 years which is not a lot.
You sound like you have some plans thought out in regards to your finances. Now it's a matter of putting them in action. You are doing well

[feh]

Kudos to you for thinking about retirement at such a young age.

That being said, I don't think you need to yet. Your expenses will be larger than your income for the next few years (while you're in school), so just focus on living frugally.

I think you can stick to savings/money market accounts for now.

[sblatner]

When you can afford to put away money for retirement, you should open a Roth IRA. Our son is 17 and opened one in 2012. He had earned income (from a W-2) so could open one. The money goes in after tax but when you are at retirement age, you can withdraw it tax free.

Once you graduate and start paying more taxes, hopefully you will have a job where they offer a 401k.

I'm not sure if I would recommend you opening one now as you need to pay for college but if you think you can spare some money, you might want to think about it. We found that we couldn't open the account online as he is not 18 but when we printed the application and mailed it in, it worked.

Also, if you are not 18 yet, you will have to have a parent "co-sign" with you. If you wait til you are 18, you can do it on your own.

[BMEPhDinCO]

I agree about opening a RothIRA - even if you need to withdraw the CONTRIBUTIONS for college, you'll still have it open and interest in there with more interest being generated from that interest! I would also try and squeeze out as much as possible (like even $50 a month) to put into that account throughout your time in college.

My final piece of advice, coming from a similar situation as you, is to realize that money in the bank, while making us feel cozy, isn't all life is about. Set aside $100 a month to SPEND - you can use it on yourself, buying gifts for others, donating, whatever you want but you have to spend it every month. Otherwise you'll end up like me, when I was 25 and terrified of buying a gift for my new husband because that would be *gasp* spending money. Not a good thing. Save, spend resonably, live carefully but be happy.

[grumpter]

It's never too early to start saving but I wouldn't suggest dumping it in a retirement fund (unless you are meeting an employer match). Keep the money in your control and when oppurtunity arises use the money you have saved to invest.

[Growyourcash]

The stock market keeps going up and up. I would not buy in right now. I bought in during the great 2008 recession and have no regrets. Warren Buffet once said to be afraid when others are bold and vice versa.

I would open the Roth IRA because its so easy to get the money out. The market could go up for 3-6 months if you want to buy in and get out soon otherwise look into CDs or just any way to earn interest.

I have put together a website to help adults to start earning passive income. Your doing a great job earning and saving. Now its time to get paid.

[swapnil]

I think its a great decision to think of retirement and future from such a small age and I respect your decision, I think you should invest some money in 401K retirement plans they are better for saving for retirement if I am not wrong also try and lock some of your income in diversified portfolio of securities like shares, bonds, mutual funds so that you can earn a good bit from it which you can utilise to save for your marriage and future life also you can keep aside a small part of income for your personal expenses no need to cut off your personal happiness for future, I am to planning to save by now I am 21 and I have to plan for the future too.

[parafly]

I'm going to disagree with some of the other posters and advise against opening a retirement account at this point.

You are still very young and have big college expenses coming up. You would be much better off saving your money in an online savings account paying upwards of 1% in interest guaranteed. You need short term, easy access to your funds without worrying about market fluctuations, and a Roth IRA is not designed to meet these needs.

[Wino]

I'm going to answer the post's topic and not your actual post.

To save money, you have to spend less than what you make.

There's the secret of wealth. Write it down.

[MonkeyMama]

I would *not* be saving for retirement right now. When I was in college, my #1 priority was to get through college debt-free. Though $25k in loans sounds relatively reasonable for an accounting degree, have you considered working more and cash flowing more of the costs? Any cheaper options for degrees? I just throw that out there because if you think you will come out with $25k debt, you probably will. If you think you will come out with $0 debt, you probably will. A lot of it is mental. Beyond that, I understand you are working with what you are working with and not every one can graduate debt free - just want to check the mental side. I'd be applying for every scholarship imaginable and working working working.

Regardless, continue saving, but keep that money to help you deal with life and finish college. If you graduate in 4 or 5 years and commit to *always* save 10% to retirement the second you graduate college, you will be do extremely well. Funding retirement at 17 is nice if your parents will be paying your way through college or funding it for you. IT seemed utterly useless to me, as I paid my own way through college and much more needed that money to survive. By going to college I was able to significantly increase my income and make up for not saving anything all those years I made less than $10k. That was my focus - finish and start earning a real income so I could start saving for retirement, etc.

My takeaway was completely different from BMEPhDinCO. Being able to easily save most our income out of college bought us tremendous financial freedom very quickly. (Used to living on very little). I really did not have the luxury to spend *Any* money in college - but still remember those years as some very carefree and fun times. At that age, everyone is broke, and there is plenty to do on a shoestring. Helps not to go to a college where wealthy parents send their kids, probably.

[Copper]

You are intelligent in this younger age. You will be succeeded one day for sure. I wanna suggest you to avoid tours and expensive items like cars.And you need not to attain all the parties.

[MakeAStash]

Note that an IRA (traditional and Roth) need not be exposed to volatile investments, so, for example, you can keep IRA dollars in a savings account paying 1% if you wish.

[parafly]

Note that an IRA (traditional and Roth) need not be exposed to volatile investments, so, for example, you can keep IRA dollars in a savings account paying 1% if you wish.

To my knowledge, there are no institutions which offer a savings account paying 1% as an IRA account investment option. You're probably thinking of a money market account, but the interest will be much lower than a traditional online savings account.

In any case, an IRA is not designed for short term savings. There are accessibility and tax situations which must be taken into account. I can understand using a Roth IRA as supplement to an emergency fund, but if you KNOW that the funds will be needed in the short term, there is no point in using an IRA account over a savings account or CD.