how to start on saving money?

Question

iam a student of 16. i often get pocket money from my parents, at least 4-5 pounds a week, just at random. the problem is that i like to spend it off on something. i can't resist but get into a shop and buy something out of any amount i have. i want now to seriously save up for an occasion so that i can get something valuable and big at the end. how to start saving and get rid of my ''spending off' habit...please help..

Answer 1

Lots of good answers here.

Let me add to the "save and see" technique. Try this site: http://www.moneychimp.com/calculator/compound_interest_calculator.htm
Plug in $1000 current principal (initial investment), $1000 annual addition, 5% interest rate (possible in some money market accounts) and just 4 years to grow. In 4 years, you will have $5,741.14.

I wish I had done this when I was your age, instead of buying all those compact discs. Argh.

By using the "save and see" method, you may get hooked on maximizing the growth of your investment, just like Yahoo!Answers users are hooked on these imaginary points. You'll be using psychology (on yourself) to your advantage.

Answer 2

I know the feeling of money burning a hole in your pocket, you feel like you have to spend it, even on trivial things, and before you know it, all your money is gone. Do you have a bank account? At 16 I think you're old enough to get one. That's what I did as a teenager. I had my parents deposit my allowance directly into a bank account for me. I had them do it once a month, instead of weekly, so if you get 5 pounds a week, they could give you 20 pounds every month, and put it into a bank account. That way you know you have it, but it's not in your pocket for you to spend. Then when you know you need money, to go out with friends or what not, take maybe 5 pounds out and try and stretch it out to last you as long as possible, and don't touch the rest in the bank account. That worked for me. Seeing the money physically made me want to spend it, but not holding it or having it in my wallet made me almost forget that it was there.

Answer 3

In many gift shops you can get Terramundi pots - they're money boxes but with a catch - once your money goes in, you can't get it out and you have to break the pot to get it. An incentive indeed to save! But be realistic - don't put all your money in every week, just aim to put at least half in. Even better - put at least half in but try to alternate weeks so that every other week you put a little more than half in!

They're great because you can feel them getting heavier and you can hear your money - last time I had one I managed to save up £184 just using pound coins and any other loose change (not pennies and two pences - it's more gratifying to have coinage worth more than that in there) that I had lying around at the end of the week.

Or you could look into opening an ISA at your local bank or building society - it's a high interest savings account, but it does involve you being proactive and going to the bank to put your money into the account.

Whatever option you choose, give yourself no excuse to miss a payment, but don't cut off your spending money completely otherwise you'll find it much harder to save. Good luck!

Answer 4

Here's something you might find helpful. I'm not sure how
the monetary system in your country works, but a good
thing to do is to try and save change. If you go into a store
and buy something, use a larger currency, even if you
have the right amount in smaller currency. Buy doing this
you will begin to accumulate allot of change, then start
saving the change as often as you can. Before you know
you'll start having a saving.

Answer 5

There are two approaches to this: you can either put money in the bank so you don't "see" it, or you can put it somewhere that you can see it grow.

For example, take some empty pringles jars, wrap them in mailing paper (or gift wrapping paper if you're feeling festive) and cut a slit in the liseperate them by usefulness. (1p and 2p would go in the "useless" jar, white coins, 5/10/20/50 in another, and pound/two pound coins in the last one.)

Then, each time you fill one of your jars, you can spend it. When you fill a 1p/2p jar, you can probably buy something small, probably 3-4 pounds. When you fill your 1pound/2pound jar, you can buy something bigger. The advantage of this method is that you can see your money grow and see how close you are to your goals. Maybe even label each jar, one can be a dvd jar, one can be a clothes jar, etc.

Answer 6

It's called willpower. Young people of your age are almost always spendthrifts with little to spend.
All too often, the goals set are far ahead of reality but if you think about what you are spending the money on now, are you needing all that you buy or is it bought because the cash is burning a hole in your pocket.
Save gradually, at first and you will see the benefit of shrewdness in time.
Good Luck

Answer 7

It's not easy, but one of my favourite ways to save money and not spend it since back when I was your age is to stick it in a money box (I used to use an old sweet tin), then hide it out the way like at the back of my sock drawer. Now I'm plummetting towards 28, and just fling all my change in the sock drawer........ the problem with this being it's a pain in the a*se trying to find it when I need it, hence why I recommend the moneybox to keep it all in the one place.
That way, the money is out of sight and you won't think about spending it as much

When the box starts feeling a bit heavy, go stick it in a savings account, such as this one offered by the Halifax
http://www.halifax.co.uk/savings/instantsaver.asp
Not sure if you're eligible to open one of these yet:
http://www.halifax.co.uk/savings/variablewebsaver.asp

For further advice on saving (and other stuff to do with looking after your money as you get older), I recommend this article:
http://www.fool.co.uk/savings/information/how-to-save-more.aspx
http://www.fool.co.uk/news/your-money/savings/2006/09/05/ten-tricks-to-boost-your-savings.aspx
http://www.fool.co.uk/news/your-money/savings/2006/08/01/the-savers-greatest-enemies.aspx
http://www.fool.co.uk/news/your-money/current-accounts/2006/07/20/your-essential-banking-guide.aspx
http://www.fool.co.uk/current-accounts/information/choosing-a-current-account.aspx
and for when you're old enough.....
http://www.fool.co.uk/school/2006/sch060130.htm (how to profit from shares)

Meanwhile, these articles on the original US version of the fool has some good advice too......... some of the terminology may be different, and some of the things it suggests not available in the UK, but the general advice is good:
http://www.fool.com/savings/savings.htm
http://www.fool.com/money/banking/banking.htm
http://www.fool.com/school/13steps/13steps.htm

Answer 8

Two thoughts - if you are working and supporting yourself, it is wise to save half your age as a percentage. So if you are age 30, save 15%. This will really prepare you.

If you are 16 with no expenses, I would suggest you pick a target. Say 75%. Save 75% of everything you get. This gives you a hard and fast rule and it allows you to spend the remainder without feeling guilty.

Answer 9

I have the same problem :P lol but u know what i do? For example in ur case imagin u only get 2 pounds and keep the rest in the bank or in a folder and put it ontop of ur cupboard and keep puting the 2 or 3 pounds u get in there and then keep the rest for stuff u wanna buy ;) :)

Answer 10

Hi again, Adi!
You need to have a goal. If you don't, what point is there in missing out on the little things?
Think of something you would really like, then make yourself a chart for the wall, showing how much you have saved, and how much more you need to reach your goal.
Keep a container in your room to save the money in, it will be great to watch the money mount up.