16 Years Old, How Much Should I Save/Spend?

[CHarney709]

Hi, my name is Chris and I'm 16 years old. I work 2 jobs, both part time, (one of them is mowing, but it takes 4 hours and the official title is "custodian") and I make about $150 weekly/$600 monthly. I'm saving up for a car and I will need money for gas of course. Maybe it's kind of early for me to be worrying about saving but I just want to get on the right track!

My question is, how much should I save/spend? Should I save some money for college? Save some money towards my car, or save some money for myself? Thank you in advance!

-Chris Harney

[Fishindude77]

Great to see you are working and earning money at this age.
My suggestion would be to save about half of it towards future car expenses, and enjoy the rest of it, spending however you choose. You've earned it.

[phantom]

It's good to get in the habit of saving and spending at a young age. (Consider finding a cause you care about and getting in the habit of giving too!) I think saving about half of what you make is a good idea. But, I'd start out defining your goals and figuring out what you need to save to get there.

Do some car shopping to get an idea of how much you'll need to spend to get a car you like. Would a $2000 car be good enough, or would you prefer something closer to $5000? Saving half your income, you could have enough to buy a $2000 car in a little less than 7 months. If you want a car sooner or want a nicer car, you should consider saving more than half your income.

As for college, I would start by talking to your parents to see if they have any plans to help you pay for it. Unless they plan on paying for everything, you probably will want to save something to give yourself more options and make it easier to avoid student loans. Even if you're not sure yet where you'd like to go to college, start looking at how much it costs in general and how much more it will cost than what your parents are going to cover. But, as far as getting money for college goes, you might find that applying for scholarships is a more efficient use of your time than working. If 5 hours of searching and applying wins you one $500 scholarship, that would be like making $100/hour!

I'd probably wait until you've got a car to start saving for college. It's easier to save for one goal at a time, and it will be good for you to see your savings help you get something you really want. If it turns out you need to save a lot for college, keep that in mind when choosing a car and pick a less expensive car so you can start saving for college sooner.

[CHarney709]

It's good to get in the habit of saving and spending at a young age. (Consider finding a cause you care about and getting in the habit of giving too!) I think saving about half of what you make is a good idea. But, I'd start out defining your goals and figuring out what you need to save to get there.

Do some car shopping to get an idea of how much you'll need to spend to get a car you like. Would a $2000 car be good enough, or would you prefer something closer to $5000? Saving half your income, you could have enough to buy a $2000 car in a little less than 7 months. If you want a car sooner or want a nicer car, you should consider saving more than half your income.

As for college, I would start by talking to your parents to see if they have any plans to help you pay for it. Unless they plan on paying for everything, you probably will want to save something to give yourself more options and make it easier to avoid student loans. Even if you're not sure yet where you'd like to go to college, start looking at how much it costs in general and how much more it will cost than what your parents are going to cover. But, as far as getting money for college goes, you might find that applying for scholarships is a more efficient use of your time than working. If 5 hours of searching and applying wins you one $500 scholarship, that would be like making $100/hour!

I'd probably wait until you've got a car to start saving for college. It's easier to save for one goal at a time, and it will be good for you to see your savings help you get something you really want. If it turns out you need to save a lot for college, keep that in mind when choosing a car and pick a less expensive car so you can start saving for college sooner.

Thank you :-)

[CHarney709]

Great to see you are working and earning money at this age.
My suggestion would be to save about half of it towards future car expenses, and enjoy the rest of it, spending however you choose. You've earned it.

Thank you :-)

[boyworldcup]

re: how much should i save / spend?

Its really very impressive to see anyone at this age worrying about such a mature stuff. So if you wanna save then save around $60 a month max and spend other on your other chores.

[Bob B.]

Hi Chris. Great to see you here.

It's good that you have savings goals.

My bias would be toward saving for college. Yes, save for a car. But, don't fall into the trap of wanting a really nice car. A good, reliable $2,000 - $5,000 car is good for someone still in high school.

You don't have to look very far into the archives on this site, especially in the debt forums, to find people who are just 10 years or so older than you are who have $50,000-$60,000 or more of student loan debt from college. That's a lot of money to pay back.

You're working two jobs now, so I suspect you'll also work during college. If your parents have a plan to pay some or all of your college expenses, that's great.

Now is the time to find out about college costs and savings. If you can have some money saved up on your own before you even start, that would help a lot in the future after you've graduated high school and college, and want to start a life on your own.

[Jluke]

What is the reason for the car - need or want?

Who will pay car insurance?

Do colleges allow freshmen to have cars on campus? mine didn't.

I was fortunate that my parents bought a 3rd car (used of course) for the kids.

I saved all of my earnings in my pre-college years and would do the same all over again. Even invested in a mutual fund that helped pay for my first brand new car after college graduation.

This is probably extreme, but you will thank yourself one day if you control your spending now.

For your situation, you presented 3 buckets, so you could save as follows: car (60%), college (30%), spending (10%).

[Fishindude77]

The original poster mentioned nothing about going to college, yet a couple have jumped in assuming that college is a given, and that he should be focused on college.

While college is a good choice for some, it's not for everyone and there are certainly plenty of opportunities to make a very good living without spending several years and a ton of money attending a college.

[phantom]

The original poster mentioned nothing about going to college, yet a couple have jumped in assuming that college is a given, and that he should be focused on college.

While college is a good choice for some, it's not for everyone and there are certainly plenty of opportunities to make a very good living without spending several years and a ton of money attending a college.

Should I save some money for college?

While I agree that college is not for everyone, he did specifically ask about saving for college, which I assume means he's at least considering going. Personally, I think it's good to have a rough idea of what sort of career one wants and then think about what sort of education would help get there. In a lot of cases, that means college, but sometimes it doesn't.

[Fishindude77]

Oops .... my mistake, I stand corrected.

[ExcuseMyIgnorance]

1. Make sure your college expenses get taken care of ie: apply for tons of scholarships

2. Increase your income when you're not applying for scholarships

3. Fu*k the peer pressure. Many people will tell you to go buy stuff so you 'enjoy life' but that's all BS. Frugal people are the happiest people I've ever known. It makes sense. What would you rather have? Depreciable assets or life changing wealth?

Good on you at age 16.

[greenskeeper]

Are you paid bi-weekly? Then you generally get 2 paychecks per month. What i did when I was living at home with my parents was to save/invest ALL of the first paycheck and spend the second one on whatever. In those months that you get a 3rd paycheck put that into savings/investing as well.

I was able to have money set aside for the bigger things in life when you finally move out on your own.

[snafu]

Chris, you've made my day! 16 y/o and willing to save, aware of how important money is and willing to set goals makes you very special. If you were my son, I'd suggest saving 15% right off the top of any and all money, whatever the source. It's a long term savings, minimum 5 years. If parents will support your efforts, I'd go for a low cost Index Mutual fund with automatic monthly contributions.

Remaining amounts could be divided into segments for future car purchase or contribution to college costs. The remainder can be spent or not, to cover your 'wants.'