Savvy Students Financial Guide


Ariana Barron, Writer

In part 1 of Savvy Students, we discussed how to make and spend money for teenagers. However, now that we know how to make money, how to save and invest your money! It is a common misconception that you don’t have to save money until you are in your 30’s, or that you need to be a millionaire to invest. These are the myths that cause americans to continue to struggle in debt. So, let’s figure this out together.

First, let’s discuss saving money. Saving money can be for anything, but accountants suggest that 20% of your income should be put into savings. What you save for is all up to you, but here are somethings you should save for before you try to save for a Tesla or a Macbook:

  1. Emergency Fund/Rainy Day Fund
    1. I find that this is the most important, especially for students going off to college or already pay their own phone bill, gas costs, car insurance, etc.. It is suggested to save up to three months worth of living costs in case you lose your job or source of income.  
  2. Retirement
    1. You are never to old to start saving for retirement. The sooner you start, the less you have to save over time. Start saving at 18 years old, you will have 47 years to save as much money as you think you will need. Remember the effects of inflation as well when you decide how much you would like to save.

Due to inflation, sometimes saving directly is not the best way, that is why it is important to invest your money. Not only will it help the economy because the money is still cycling through the economy, but if done right, investing can have major payoffs. When starting out, it is best to find a stock broker to invest your money for you. They have more experience with stocks, so it is best to leave it to the professionals until you have enough experience to do it yourself. You can start investing with as little as $100 dollars of spare cash! Just leave it and watch it grow over the years. This could eventually be used for your retirement!

I know this is a lot to take in, but it is never too early to think about finances. Learn now as a teen before you become an adult so you don’t make the mistakes that lead you to a pool of debt. Be smart with your money, no need to show it off. You work hard for it, so don’t waste it on frivolous items. If you are interested in learning more, I would suggest reading “Rich Dad, Poor Dad”, by Robert Kioski. Kioski discusses differences in the journey to being poor versus rich, and how to make the right financial choices. Remember, this is just some basic knowledge and suggestions, please continue to research financial literacy to make the best choices for you.