Ideas on how to save money, create a budget

By Staff Writer: Alexis Klask

If someone told me that I could be a millionaire by the time I’m 55, I would tell them there’s no way. There is no way that I could save that much money with all of the expenses I have to pay and especially not when I have to pay for college.

In actuality, this is a very possible achievement.

By saving five dollars a day, the amount of $35 a week can add up over the course of 40 years. If the amount of money someone is putting into a savings account is compounded at 10% annually, that person can have about one million dollars.

What’s the big deal about saving anyways?

What isn’t the big deal? Saving money rather than spending is an ability that has lost popularity over time. According to statisticbrain.com, the total amount that United States teenagers spent in the year of 2012 was $208.7 billion.

The majority of this spending can be easily correlated with the teenagers wants. By this I mean new shoes, or some expensive coffee from Starbucks, or maybe a new video game that just came out.

I don’t quite understand why it is necessary to go to a fast food restaurant every day after school if someone has perfectly good food at home. Why buy another stylish jacket if there are already three others just like it in the closet?

The point I’m trying to make is that when buying something, whether it be food or new accessory, it’s important to ask the question, “Do I really need this?” It’s a question that should be asked when making any purchase, because that amount spent could be money saved towards a college education or a new car.

It’s also vital to know how to manage money. Not everyone needs to be a financial expert to understand when one’s goes into debt. It’s important to monitor the income made per month and to know the amount being spent on miscellaneous items that may or may not be needed.

Developing a type of budget is proven to help in a time of financial crisis. Just recently, the government shut down because a federal budget could not be approved. After a compromise was set, it’s now possible to create a healthy economy with ideas that derived from a financial budget.

I personally set aside a certain amount of money for each event going on that month, every month. This usually includes money for car insurance, gas, a new movie coming out, or maybe a new book being released. I also make sure to set aside a fixed amount for food or beverages I want to buy.

With this system, I have calculated my current average income per month from my job, and I first subtract the amount of money that I need to pay for things such as gas and car insurance, etc. After that I can devise a plan that will allow me to spend money on other items that may not necessarily be needed.

Alongside a budget system, I also found out that it is very important to save money as well.

Maybe it’s hard to save five dollars every day. Instead of five dollars a day, why not try saving $15 each week. That way, in a month, $60 will be saved. $720 a year may not sound like a million dollars, but if it’s not touched and stays in a bank account for a year, $720 turns into $795.39 (if compounded at a 10% interest rate).

Basically, this means that by placing the money saved into an account for a measly year, the bank will give an extra $75 just for using their bank.

Knowing how to save money and how to manage money is a characteristic that represents an enormous amount of responsibility. Acknowledging how to do that as a teenager is a feat that most adults in their 30’s can’t accomplish.

The world is full of people who end up on the streets because they can’t necessarily understand how to reserve their money for the items they need. Understanding how to function correctly with a savings account and knowing when and when not to buy a product is something that can benefit everyone.

Rather than wait for the time to come when all of the money is gone, why not begin practicing practical ways to save and overall influence buying habits?