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Saving for Students





Soltair
Do you think it is wise for young people (around 16-18 years old) to save up money if they earn a salary of some kind? I personally take saving bonds (I have currently 2000$ deposited that way, and another thousand growing with my new job) at an average 3,5% interest rate/year. Is it reasonnable or am I losing my time? Do you think young people should spend their money and have fun with it while they can or save for the future?
joxang
Savings bonds are definitey the way to go, though I'm sure you could find something higher than 3.5% if you shopped around a bit.

If you're in England, tax free ISAs are an excellent option. Both these and the medium term savings bonds have interest rates at around 4.5%.

MAke sure you choose to receive gross annual itnerest. There's not enough money in your bank right now to make/give yourself a decent monthly income, and you'll get many more dollars if you choose to get your interest annually. The rates are nomrally higher.
ahsanrao
yup .. saving Bonds a cool idea... ye we should adopt the habbit of savings ... as it also improve any countries economy in a way.
Soltair
The things I have a bonds that I can change once a year. The first year, I get let's say 3,2 %. If the cash stays there, the second year I get 3,5%. Then again, a third year will bring in 4,25% interest rate. Then I must take a new one with the interests of the moment.

Problem with saving is that so little people do it. When I took my saving bonds the clerk was so confused that she had to call the national bank center to make sure you could buy bonds even if you weren't 18 years old Wink So it must not happen quite everyday...
Meggsy
Bonds are a rather low grothw asset. You could also look at putting some money into a high growth asset. Since you are young you can leave that money invested for a long period of time and ride the stock market highs and lows.

Start saving as early as you can, the nature of compound interest means the interest you earn in the last 10years (I think) of an investment is greater than all the previous years combined. The earler you start the more you will have. Remeber "it's not timing the market, it is time in the market."
Intrigue
Yeah, its vital that you save for your future. Ultimatlely the choice of investment has to be up to you, depending on your situation. If you can afford to take some degree of risk then do, if you want to maximise your potential returns. Just remember, don't take unnessesary risk.
freeedy
I do get your point, you are to yong to save and to think in the future. You rather prefer to spend it on cloths, friends and parties. This is a time of your life that will actually define the rest of it. Many of the great inventor, even contemporary, have started creating smanll businesses or devloping small ideas at those ages. The common denominator that limit there ideas was the lack of budget. If they had invested in previous years they will had more oportunity in developing there ideas. As this there are a huge amount of stories. The only thing through is that if you wasted all your money now you won't have for later when true emergencies appear. So save a little part of your income, it won't do any harm.
Soltair
freeedy wrote:
I do get your point, you are to yong to save and to think in the future. You rather prefer to spend it on cloths, friends and parties. This is a time of your life that will actually define the rest of it. Many of the great inventor, even contemporary, have started creating smanll businesses or devloping small ideas at those ages. The common denominator that limit there ideas was the lack of budget. If they had invested in previous years they will had more oportunity in developing there ideas. As this there are a huge amount of stories. The only thing through is that if you wasted all your money now you won't have for later when true emergencies appear. So save a little part of your income, it won't do any harm.


That's exactly my point of view so far, I was never the spend-much type of guy anyway... And I hate spending time in stores Razz I rather wanted to know the people's opinion on this topic.
vinx_18
Yah.... can you give me some tips to save up some money? How ? PLease...
eagle1
Soltair wrote:
Do you think it is wise for young people (around 16-18 years old) to save up money if they earn a salary of some kind? I personally take saving bonds (I have currently 2000$ deposited that way, and another thousand growing with my new job) at an average 3,5% interest rate/year. Is it reasonnable or am I losing my time? Do you think young people should spend their money and have fun with it while they can or save for the future?


I pulled most of my money out of savings bonds and put them into growth stock mutual funds. Government bonds are the safest but also have the lowest rate of return. The mutual fund may be a little more risky but pay off much more. With the diversification of the mutual fund the risk is low. I think people should try and put away about 15% for retirement.
eagle1
vinx_18 wrote:
Yah.... can you give me some tips to save up some money? How ? PLease...


Do a budget a couple days before you get paid and live by it. The budget has worked wonders in my life. Make sure you factor in a line item for savings at the top. www.daveramsey.com has some great budgeting tools.
Soltair
It also depends on how old you are. I just look at other people who are as old as me: some have jobs, other do not even think about it. Be it the case or not, most of them spend their money on gadgets, scrap cars or the likes. Why waste your money on things you won't use anymore in a few years? Just wait a bit and get something decent when you truly need it. That's how I am thinking, personnally... Wink

Oh, and I am not quite ready to take any risk with my money. My upper studies are at stake.
robbinsjd
Best thing to do with your money and if you are young is to invest in an annuity. Which is basically a savings account with a high interest rate with a CD. Just add 100 dollars a month and comound the interest. You can have a million dollars in about 40 years. This is because the money grows expontentially, and all the compounding of this interests is what causes this.
curupira
When I was a kid, sometimes my uncle would give me a bill of a large value. Something like US$ 10. First two times, my parents allowed me to spend it. Latter, they made a savings account for me. I agreed because of the propaganda about a savings account that time. People would make big money out of it, years later. 15 years later I went there, the money was devaluated by inflation.

If you have a good reason to spent your money, do it. If you can use it good, just do it. Otherwise, learn to produce money. That's much better.
zeene
curupira wrote:
When I was a kid, sometimes my uncle would give me a bill of a large value. Something like US$ 10. First two times, my parents allowed me to spend it. Latter, they made a savings account for me. I agreed because of the propaganda about a savings account that time. People would make big money out of it, years later. 15 years later I went there, the money was devaluated by inflation.

If you have a good reason to spent your money, do it. If you can use it good, just do it. Otherwise, learn to produce money. That's much better.


Good thing you leant the hard way that putting your money in savings account it not the best way to go - Inflation.

As teens, the grat pressure facing us is having our earned money spent (mostly on insignificant things) but definately, we should save as much as possible and only buy things we need (not want). That is by asking yourself this question: "Do I really need ths stuff or I could do without it or get a cheaper alternative"

As par the best way to save, the wisdow is not to pile up money but to make your money work for you, and the working money do some more work. That's something i'll call investing and re-investing.

Bonds, Stocks, savings are options but recently a trend pop-up that seems good and quite profitable - gold coins; consider those.
chrismen
Of course save. When I was in high school I saved over 50% of what I made. I always took aside 50% and put it into a savings account. Now that I am in college and have less time to spend working that money has really really helped me.
magesh_lalla
in deed.. we need to save.. thts gonna help us in need.. none knows when the need is gonna come
ZealousZ
i think saving is the way to go, but not to the extent where ALL your money goes into savings

soltair, it sounds like you invested in a "safe bonds", i saved my first $1000 into one of those but the return is really low, i found a "no-loss gamble" bond, with a return in the range of 0%-23%(23 will probably never happen) and the rate is about 9% this year

also if you're investing, COMPOUND INTEREST is the way to go
TribalArt
Yeah i think its a good idea because the money is left to do something productive.

Also if you have the spare money and no need for it then yeah!

Finally it avoids spending too much on having a good time [drugs etc]

And you get something better out of it at the end.
jmwarshay
One thing to keep in mind is that 50% of a student's available income (after taxes) over $3000 is included in the expected contribution for the next year. So if you earned $8,000, paid $500 in taxes, you would be expected to contribute $2250 from your income (8000 - 500 - 3000 = 4500 x 50% = 2250). So it's a good idea to save your money if you work, because there is a good chance you will need it for college. Saving is a good idea anyway.
Divinaeon
While I think saving bonds are really good and can save up a lot of money, I think it is really REALLY wise if you save the money you earn from a salary. You can do this while having fun with it at the same time though...I recommend a sort of system in which you divide your money up. Personally I put 80% of what I make into my savings account (for college, car insurance, and whatnot) and the other 20% in my checkings account to spend on whatever the hell I feel like. It's personally up to you though...it's your money, and you get to choose what to do with it. That's the beauty of America.
yy1124
i won't call that saving, but I only take about 30 percent of my salary for spending and keep all others in the bank. I am leaving with my parent so the room rental will not be a problem and i have no other commitment that needs me paying...
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