How to Save Out of Your Pocket Money
Everyone wants to have more than enough money in his or her pocket to be able to do meaningful and productive things. This makes savings important, so I will be addressing questions that run through the heart of teens about savings. I will also be sharing my personal experience with savings.
Saving money simply means setting money aside to spend in the future. There is no one “right” way to do it and no amount is too small to save. It is important for teens to understand that the amount they save is not nearly as important as the habit of saving on a regular basis.
Small amounts saved consistently over time can grow into significant savings. It is a common saying that “Ideas rule the world”. But think of this, there are many ideas that might be running through your heart right now. Thinking on those ideas does not make you the ruler of the world if you cannot execute these ideas.
So I will say that the executors of ideas are the ruler of the world. Among several reasons why we should save out of our pocket money, is to help us achieve our goals in life.
Taking a clue from my personal experience, I had a goal to start my Master’s degree immediately after my NYSC. In order to accomplish this, I saved minimum #10,000 each month out of my Allawi (also known as salary as a Corper). At the end of my service year, I had #120,000 saved in my account.
I was able to use this to accomplish my goal which was to further my education.
When Should You Save?
Do you know that over 75% of teens agree with the statement, “I am young, so saving money isn’t that important”? It is never too early or too late to start saving. People of all ages can benefit from saving. However, the younger teens are when they start saving, the less likely they will develop financial problems. Starting younger will also give them the advantage of time – time for their savings to add up bit by bit. By putting savings in a bank or investing it, teens can let their money work for them. The time is now.
How Do We Save?
For young people like us who have few expenses, the process of saving is fairly simple. We only have to decide whether we are going to spend their money or save it. It is simply a matter of committing to save. In addition to a commitment to save, we need to come up with a plan that allows us to both save money and cover our expenses. I will be sharing with us two tools that are helpful in creating this plan. These tools are goals and budget.
A goal is something to work toward. Simply knowing progress is being made toward achieving a goal can motivate us to stick with it – despite the effort and sacrifice along the way. That is why setting financial goals is an important part of the savings process. Teens who know exactly what they want to accomplish with their money have a far better chance of making it a reality. A goal will also need to be realistic to achieve. Goals that are set too high will simply set us up for failure and may discourage us from pursuing our goals further. For example, if our monthly allowance is #2,000 and we have #1,200 worth of expenses, setting aside #1,500 savings is not realistic. A more realistic goal is to save #800 each month for a longer period of time.
While goals provide motivation to save and a target to shoot for, a budget is a plan for spending and saving that will help us get there. The first expense everyone should put on their budget is the amount they plan to save each time they receive money. Setting aside money at the beginning of the budget period ensures there is money to save. Otherwise, the money may run out or be spent on something else.
Lastly, a wise man once said: “More money won’t make you rich without discipline”. We believe that you will be disciplined enough to save for the future that is uncertain.