Do I waste to much money?

Question

I am still a teenager and I am not proud to say I am spoiled. I get anymost anything I want. I would like to know if I saved up some money as a kid a few thous would it really help out in the longshot as an adult. Or do you think its fine that im living out my teenage years buying the xbox having a nice t.v. and all the stuff I want. Basicly this is my question. Do you think its stupid that i keep spending money on things like my t.v., i phone, snowboard, xbox games and not saving money or do you think its fine that im using most of my money for now and i will assure you once i am on my own i will have my own job and wont get any money from my parents and wont spend anything and will save them. I know right now i have about 20 grand is that good right now or am i behind and i should start saving up?

Answer 1

I think it's best to be balanced. Life isn't very fun without money, but life isn't all about it, either. Saving money isn't much better than spending it if the money doesn't work for you. Take $5000 and purchase a CD. Take $13000 and open up an IRA and diversify the rest among bonds. Take $2000 and have some fun.

Answer 2

That is a good amount but you can never have too much saved. Why don't you try saving a certain amount each time you get money and spend the rest on the things you want? The more money you have saved up the easier it is to get apartments/homes, new cars, etc. Plus it will make it easier for you to take vacations and such. Think about it this way when you buy something:

In 6 months or a year will I still be using it? If not, it probably isnt worth the money. If so take the amount of the item and divide it by the 6 months or 12 months or however long you think you will use it. Then ask yourself would I be willing to spend that much per month every month for that item.

Example: Computer $600 plan on using it 12 months... cost per month would be $50. If it is worth $50 a month to you then get it, if not use the money on something else.

Answer 3

Well it is not stupid, but not informed. With $20,000 is pretty good unless that is for your college.This point in time you do not have a lot of bills to pay, so it would be the best time for you to get started.
Example: $50 per month in an Roth IRA @ 10%
From age 16 - 55 ( 39 years) after adjusting for inflation and inflating savings will grow to $93,821.61 or $290,474.10 without adjusting for inflation and inflating savings.
For every 6 years you delay investing you will have to double the invest amount to get the same total return.

Answer 4

Go to the library or book store and look at the chart on page 120 of "Financial Peace Revisited" by Dave Ramsey.

That will help explain why you should start saving small and early instead of big and later.

Here's an example I posted to someone on a different board:

"We both invest $50,000. I invest $50k today compounded annually at 11%, and you invest $166.66/mo ($2,000/yr) for 25 years compounded annually at 11%.

We both invested $50k, but in 25 years I'll have $679,000, while you will only have $262,600. If I continue to leave my money alone, and you continue to invest $166.66 a month forever you'll never catch up to my account."

I busted out the investment calculator just for you and if you invested $20k now and left it alone at 11% for 30 years you would have ~$458,000 saved before your 50th B-day!

Let's see what happens if you invest $20k now and $2,000/yr for 30 years: That runs up to $900,000!

If you do $20k now and $3,000/yr ($58 per WEEK.) for 30 years you'll be a millionaire! You'll have $1.12 MILLION dollars before your 50th Birthday!!!!!

Just so you know what a movie and an Xbox game really cost you: If you invest only the $58/WEEK into our little scenerio for 30 years at 11% it would be worth $662,000.

Answer 5

I did not get past the header. If you CAN ask the question, the answer is YES. If you have 20 grand as a teenager, you have ZERO excuse it you don't retire a multimillionaire.

Answer 6

i don't spend my money on things that will be out of date tomorrow. instead i like to go to sporting events or skiing. I would spend $1000 on skiis before i spent $400 on a game console. Good luck!

Answer 7

i think its OK to buy a few nice things but that stuff becomes obsolete almost as soon as you buy it and something bigger and better comes out.

but $20,000 is about $19,000 more than I have so you're doing alright haha

Answer 8

You're doing better than me. I don't even have $20, & I'm 24!