Must-know money managing tips
It's important to learn how to manage your money at a young age — before you have to start paying for some pricey things like college or a car. To make your cash count for more, check out the Make Change Count campaign, jointly sponsored by the Boys & Girls Clubs of America and the Charles Schwab Foundation, which encourages smart saving and financial fitness! We recently chatted with Carrie Schwab-Pomerantz, the president of Charles Schwab Foundation, and she gave us all of her must-know money managing tips. Check 'em out!
GL: For teens who have never saved before, how do you recommend that they begin to do so?
CSP: First of all, talk to your parents about opening a savings account. And make sure that your savings account has as few fees as possible. To start out, save 10% of your income — whether that be from birthday gifts, allowances or money made in your after school job. If you can do that for the rest of your life, you will create a nice nest egg.
GL: How early should teens start saving for their ultimate big expense: college?
CSP: There's no rule of thumb, but by about age 16, most teens are thinking about saving for long-term expenses, like a car or college.
GL: How should you begin to create a budget for any big expense?
CSP: Know your goal. Then, draft a budget that will allow you to achieve that goal. Consider how much you make each month (your income) and how much money is needed to afford your big expense. Then, consider your other necessary expenses each month and calculate how much money you will have left over to begin to put away.
GL: What are some of your favorite (and oh, so easy) saving tips and tricks?
CSP: At your birthday, when you get money, take a little bit out to spend on fun activities, but be sure to give the majority to your parents to put into a savings account. You could also ask your parents if they would be willing to match however much you save each month. And always remember, the more you put money away somewhere else, the less you think about it and the less you feel like you’re losing something. It will accumulate so fast!
GL: How does the Make Change Count campaign and pledge work exactly?
CSP: Go to MakeChangeCount.com and click on "Take the Pledge." In doing so, you'll be committing to save money, spend wisely, plan for college and share what you know. Then, you can share your pledge with your friends on Facebook and Twitter. We want to create a movement of teens talking about the four tips and their decision to take the first step toward financial well-being. There are also all sorts of resources available on the site about how teens can keep saving and spending wisely.
Have you taken the pledge yet? What are some of your best money management tips? Blog about it, babes!