How much of your paycheck should you save from a first job?

Question

Should kids save 10%, 20%, or more. Wondering what the general feeling is towards saving from a first job when you are still a teen.

Wow, I really phrased that bad.

Answer 1

Wow! What a refreshing question coming from a teen!

If you were a full, independant, self-sufficient individual then the main "savings" number is 3-6 months of disposable income. That way if you have an emergency (or even get laid off) your savings will sustain you and your family.

At your age I would say to start saving at 10% if you feel like you still have a lot of extra money bump it up to 12%. Then try 15%. The trick with saving money is not touching it. Talk to your parents (or your bank) about setting up a CD (certificate of deposit) that you can deposit into periodically or at least a savings account where you won't touch it. Get into the habbit of saving money and your life will have a lot less stress later on.

I saved enough before I was 20 to pay for a $11,000 truck in cash. If you want, you can save for anything!

Best of luck to you!

Answer 2

Here is some food for thought. When you spend money, that money can't be used for something else. Seems pretty simple, but few actually think about it.

Say I saved up $20,000 and decided to go out and by a car with it. In 20 years, that car is going to be worth on the order of 1-3 grand at most. In a good mutual fund (earning 12+%), that money would grow to over $213,000!!! If you left it in for another 20 years (40 years total), that original $20k would now be worth $2.3 million.

It is far easier to save when your expenses are low. I wish I had started sooner. The earlier you start, the sooner those habits will be in grained in you. Now of course you can say, "It sure would be nice to have that $20,000 you are talking about." But if everyone would save $200 a month for their working lives (40 years on average) in a good mutual fund, you would retire with $2.3 million every time.

A good number to go by is generally you should save on the order of about 15% of your take homepay. With you living at home I would atleast double that (30%) and take the remaining money and place it into some long terms savings (money market for emergency money and Roth IRA's for long term investing).

Answer 3

My parents made me save 50% until I was 18. I hated it then, but it was nice to have all that money saved for when I needed it later. Personally, I think 20% is good.

Answer 4

My parents always told me to save half. Sometimes I did, sometimes I didn't - I hated to save it when the spending on things I didn't have was so much fun. I did learn the feeling of not having enough money to do things, and having my parents turn me down when I asked for a loan. I learned to save more from then on or to budget when I had a goal in mind.

Answer 5

I would take about 10% of every check I receive and place it into a high interest account. I'm not sure what the exact name is, but thats what I would do. Plus it'll be good for the long term.

Answer 6

it all may depend on your expenses. but you should try to save at least 20% and every month after, put a standing order to a savings account.

Answer 7

If you are still living at home with your parents, then I think you should at least save 90% of the money you earn! It is a very good habit to get into, and you will be grateful later in life that you learned to control your urges very early in life!

Answer 8

Save as much as you can. Kids don't have the expenses as us older folks.

Answer 9

"I think spend it all

what if die when you are 20? "

log back in at the library when you are retired and living off of catfood because you never saved any money

Answer 10

my dad always said 10%

I think spend it all

what if die when you are 20?