#TeenFinance #MoneyManagement #FirstJob #SaveVsInvest #PartTimeJob
Congratulations on your first job at 15! It’s never too early to start thinking about how to manage your earnings, and it’s great that you’re already considering options for what to do with your money. In this article, we’ll discuss some valuable tips on how to make the most of your paychecks, including whether you should start investing or continue saving, as well as the benefits of picking up more work shifts.
## Importance of Financial Planning
It’s excellent that you’re already thinking about how to handle your income at such a young age. By learning smart money management skills now, you’re setting yourself up for future financial success. Here are a few reasons why it’s important to start planning your finances early:
1. Building financial habits: Developing good habits early on can set you up for a lifetime of financial stability and success.
2. Prepare for the future: By saving and investing wisely now, you can build a solid financial foundation for future goals and emergencies.
3. Learn the value of money: Earning and managing your own money can teach you valuable lessons about the value of hard work and responsible spending.
## Save Vs. Invest
One of the most common questions people have when they start earning money is whether to save it or invest it. Let’s break down the benefits of each option:
### Saving
– Immediate access to funds in case of emergencies or unexpected expenses
– Low risk – your money is safe in a savings account
– Earning interest on your savings over time
### Investing
– Potential for higher returns compared to saving
– The opportunity to grow your wealth over the long term
– Learning about the stock market and other investment options
Given your current situation, it might be best to focus on building up your savings for now. Having a solid emergency fund can provide you with a safety net for unexpected expenses.
## Side Hustle
You’re doing great with your current job, but considering picking up additional work shifts is a fantastic idea. Here’s why:
– Increased earning potential: Working extra shifts can boost your income and provide more financial freedom.
– Skill development: Taking on more shifts can help you develop new skills and gain valuable experience in the workforce.
– Balancing work and school: It’s essential to find a healthy balance between work and school, but picking up occasional extra shifts can help you save up more money without overwhelming your schedule.
## Final Thoughts
At 15, you have a fantastic opportunity to start building a solid financial future for yourself. As you continue to save and potentially invest your earnings, you’ll gain valuable insights into the world of finance and build essential money management skills that will benefit you for years to come. Keep learning about different ways to grow your wealth and consider seeking advice from a financial advisor or mentor as you continue on your financial journey.
Taking steps to manage your money wisely now sets a great example for your peers and puts you on the path to future financial success. Keep up the excellent work and continue to seek out advice and knowledge about personal finance – it will pay off in the long run. Good luck! 🌟📈💰
Congratulations on working at 15! It’s a bit less common these days but it will pay off big time in work ethic down the road but even more importantly, you are learning how to work alongside other people and have a relationship with a boss.
I employ about 500 people, many of them fresh out of college and believe me, it shows when it’s someone’s first job.
Picking up an extra shift here and there won’t hurt! Just don’t forget to be a kid!
I would be putting your money into savings account and then once you got about $1000 dollars, look into what’s called a “CD”.
It’s a safe and short term way to invest with a bank.
I’m going to guess you’ll want the money to buy your first car possibly? This could be a good avenue.
When it comes to finance, there never really is a “correct” answer, you need to educate yourself and decide what is best for you and your goals.
Good luck!
Save as much as you can and invest
Work ethic is your most valuable asset in your financial growth, very important to mature emotionally in this way by starting early. Keep it up! There’s a flow chart for how to manage the money you’re making. My main callout is thus:
The hard truth most people are hit with is investments are a rich person’s game. It’s important to be smart about it and the sooner you start the better you’ll be. But at It’s core, the best advice to give a young person is this:
Think about what life will be like as an adult. What will it be like when you’re on your own? Anticipate your cost of living. The cost of your dreams. Make a plan to get there.
The big lesson is this: the vast majority of people don’t get paid enough money to invest a significant amount. They are too busy working their current job to train the skills to get a better paying job. When you are young, you still have many privileges- free roof, free food, time to learn anything and everything. Make sure you pick a career path that will give you the resources to achieve your dream.
Build credit and build mental health/strength. The biggest pitfall for anyone young is buying something completely unnecessary or for keeping up with appearances.
At 18, I bought a new 2013 Camaro with an apr of 7.99% & a pricetag of 34K at sale. It forced me to be highly conscious of my finances but could’ve been avoided if I wasn’t mentally weak.
Nowadays, I only get 0 APR vehicles & just live well below my means. I’d get a nice motorized bike or a really beat pickup truck/utility vehicle. I wasn’t factoring car insurance either, and it was the same cost as my loan. I’d say truck or utility vehicle because when you’re in your early 20s and late teens, you move around a bit and it’s garbage with a coupe or sedan.
I’m at 815+ credit score, and the real estate market is complete garbage but as soon as it crashes, I’m ready for it.
i dropped out at 17. I’ve been working since i was 15, just like you, and i’m about to turn 21. my biggest regret is i was a dumb kid and didn’t save a dime of it. Now i’m playing catch up trying to build an emergency fund at 20. Save it, get an emergency fund, invest, lots of options. But whatever you do, don’t spend it on silly stuff like i did.
If I was 15 I’d start a Roth IRA
I know people are going to suggest other stuff like emergency funds etc etc. But let’s be honest the OP is a 15 year old, his parents are legally his emergency fund.
If the OP doesn’t even max out a Roth IRA, and just puts say 4000$ in. At 7% that would be 160k completely tax free at retirement, and at 10% it would be nearly 800k
If the OP maxed out his Roth IRA just this year and never contributed again at 10% he would literally have OVER 1 million dollars completely tax free at retirement (I get it contributing 6500 dollars to a retirement account at 15 is a big sell, but it’s also life changing money if done correctly)
I get it he’s 15 and there’s other things he can do with the money, but he’s posting on personal finance so my assumption he’s looking for something financially savvy.
Not to mention a ROTH IRA can always be an emergency fund anyway incase things truly get dire. But to me a well funded ROTH IRA at 15 is a gamechanger
(I imagine you’d have to have a parent as a guardian on your account)
I assume ur in high school, im 20m, work as much as u can, pick up some shifts, only work as much as u can handle and dont let it stress you so much, where ur at now is more than likely just a job so dont be afraid to leave to make more while ur young or to something u like more. Save up ur money as much as possible, but like others said be a kid and have fun. Dont forget to do ur taxes in april-ish since ur working. Im all for the HYSA and not a CD. Id have a checking then a savings then a hysa for majority of savings. Look at fees n such and id bank with a local credit union for ur checking and savings, they hsve limited to no fees
Id keep saving. Do you have college plans? Career plans?
Just get in the habit of learning about personal finance continuously! I know it feels like this big scary confusing thing when you’re young but in reality it’s just something you learn over time like anything else. Two resources that are great to start with are NPRs Lifekit money podcast and articles from Nerdwallet. I’d also suggest eventually opening a brokerage account and putting even just like $100 dollars into an index fund when you’re old enough(this is mostly just to get you used to the concept of investing and get set up for further down the line, don’t stress about investing a ton yet it’s more about learning). Another idea is if you plan on going to college and know you might have to take on loans you could start setting aside some money in a high yield savings account (I agree with everyone who’s mentioned those so far). But the general jist is just focus on learning! Goodluck 🙂
You need to tell us more. You are 15. Do you have any plans for how you will eventually support yourself?
At your age, the best investments you can make are in your knowledge and skills, but it should be with direction and purpose.
Tbh you are smart asking this question at age 15. I would say just work and find a good job.
If you want to make big money learn how to sell or invest. Not telling you have to invest but learn the basics.
If you love games making money by investing is like a game it’s fun.
Fail more. One day you will understand why
Stay in school and look for good paying jobs. Whether that’s a 4 year degree, trade school, or starting your own business.
Don’t sweat the small stuff now, enjoy being 15.
INDEX FUND!!!
I opened a money market at my credit union. (And a checking account for my direct deposit)
The money market is a higher interest savings account that you can still withdrawl from at any time unlike a CD (certificate of deposit) which you cannot withdraw from at any time but it has a higher interest rate.
You want a higher interest rate because this way your money will make money each month and your credit union will pay you dividends (free money for you, literally). Dividends do have to be claimed on taxes tho.
You don’t have enough quite yet to start investing imo which is why I suggest the money market.
Then when you have enough, you can take half from the MM and open an ETF (exchange trade fund). This will be monitored and balanced by the company it’s with (like Charles Schwab). This IS invested money at the will of the stock market, but they do the investments for you so you can focus on school while your money makes you more money (be aware that you *can* lose money in stocks but as long as you’re not trying to withdraw immediately, you will make that money back again in a few months to years)
Having a money market was huge for me at your age and still is today. It’s where it all began for me. I’ve been so blessed. Those dividend payments are awesome. $30+/mo generally. I get about $200/mo.. but I probably have a little more than you at this point!
Best of luck!!
1. Remember to be 15
2. Take the extra shifts if you can/want to
3. Put the money in the bank, try an online HYSA
Save as much of it as possible. Future you will love you when you go to buy a car or go to live on your own.
Work out a budget and see what you need week to week (I assume your guardians are footing the bill for almost all necessities but it’s good to train good habits early). Then I’d suggest dividing the remainder among some combination of ideas suggested in here. A high yield money market account such as Wealthfront is great for the short term since it allows for liquidity and 5% annual returns, and a Roth IRA for the long term to get a head start on your retirement. If you find yourself maxxing the Roth, diversify further.
Main point: The fact that you even care about this and aren’t just eager to blow every paycheck at your age bodes very well for your future.
EDIT: Forgot to say get accustomed to living below your means. Have a cushion/safety net, always be prepared. Life happens and things can change in an instant, just because you are making money today doesn’t mean you will be tomorrow. I’m sure you’ve seen stories on this sub, one financial misstep can lead to a lifetime of debt. Be smart, especially when it comes to credit and financing.
I remember when I got my first job at age 12 and being so excited that minimum wage was just raised to $4.75.
I was so stoked…..
You are 15, be a kid, have some damn fun before you lost that option in life. It will come soon enough.
Save. You’ll need that money for college and if you don’t go to college you’ll need it even more.
Save, save, smart investments. Insurance
You’re doing better than most, the saying goes it’s never too early to think about retirement. I’m in my 20s and I’ve been ready to retire yesterday.