Money Smart Week on April, 2024: What should I save my money for? What is a smarter move?

Money Smart Week 2024. Money Smart Week 2014 Money Smart Week logo Ben

You've got it all wrong. Smart people don't save for things. They save because of things.

If you commit to saving a part of your pocket money every week in a special bank account designated for savings there is no reason you can't have all those things, within reason.

Firstly, you set up a special savings account -- it should have the best rate of interest you can get. Shop around, and keep in mind things like bank fees. For example, it will be an account you won't be making many withdrawals from, so it may be better to get an account that has fees per transaction, rather than a monthly service fee. Find a good account that suits you, and set it up.

Now, if you get paid $20-$30 a week, you can easily afford to save between 20% and 50% of that -- don't worry about not having enough for clothes, we'll get to that later. You put that money in your savings, and it just sits there and grows interest.

Now, when the sales are on (that's the cheapest time to buy clothes) you take out a set amount of money in cash from your savings, making sure that you're not taking too much. THAT is when you go shopping for clothes, because this way you get more great stuff for your money. The best sales are usually the stocktake sales which are every six months, after xmas and in july. If you buy clothes between those periods, you will pay a premium, and your savings will not buy as much stuff -- which, I am sure you will agree, sucks.

Now, eventually, you'll have enough to buy a cell phone or a laptop -- you may find by the time that time comes, you actually want to spend your money on something else, which is fine. The most important thing is that you keep saving, because when you have savings, you can buy what you want, or need, without waiting. You need to think about purchases though. It'd be lousy to spend $150 in savings on something on an impulse and then not want it the next day, so you need to set a time limit to think about purchases.

You should always have some in savings, regardless -- this is for emergencies. If something happened and your parents couldn't help you, that is what that money is for. This is part of being responsible. If you continue saving, you'll be able to use those savings as a house down payment in the future. You just make saving a habit. That way, you can have the stuff you want. :)

How can I be money smart?

First of all, make a commitment to save 10% of everything you earn. Have a special bank account that gets good interest and put your special savings there. Get a good account with low fees. Shop around at multiple banks til you find the account you're looking for.

Now, don't be scared of debt. Debt is a great tool. It's just that some people are cretins and they use debt to buy the wrong things. Only use borrowed money to buy a house, or good quality shares, and even then, try to get the lowest interest rate you possibly can.

You can have a credit card, but only use it to build a credit rating. Buy something like groceries or fuel each week with the card, then repay it immediately with internet or phone banking. Pay an extra dollar, so that your account is in the black all the time. This will improve your credit rating. Never use the card to buy stuff you don't need, like new clothes or movie tickets or meals out. Only use it on essentials, and make sure you have the cash to cover the purchase.

When you are working, have your boss put at least 10% of your income into your special savings account, and the other 90% into your normal account. Do this over your lifetime, and you'll always have a stash of cash to rely on during emergencies, like if you need to buy a replacement car, or a fridge, or you need dental treatment immediately. Having an account for emergency savings has saved my arse numerous times. I cannot stress how important that is.

Always save up and pay cash for everything. Even cars. Save up and buy a secondhand car, and you'll save heaps.

You should make saving just 'a thing you do'. Have savings that are not earmarked for particular purchase. They are there 'just in case'.

When buying a house, you want the biggest deposit you can save, and borrow the smallest amount for the mortgage. If you ever have debt, like a mortgage, pay it back as soon as you can. That will save you thousands of dollars in interest. I have a mortgage and I'm repaying it in five years, not thirty. It is worth working a little harder now and paying the house off because in the future, I won't have a mortgage repayment, I'll own the house outright, and I will have saved myself over $100 000 in interest. Most loan payments are mainly interest. The longer you repay the loan, the more interest you pay.

Go to your local library and get some basic books out on personal finance. They will help you get to understand the dos and don'ts of money.

You should invest some money now before you turn 18. The longer you have it invested, the more you'll end up with. Just like the longer you pay a loan, the more interest you pay, the longer you have an investment, the more interest you get. Talk to your parents about it. If you can save a few thousand dollars, go to your bank and ask if they have a financial planner on staff. They will be able to help you.

Best wishes. You're smart to be so proactive at your age.

money making ideas?

Hi, Dan B!

Yeah, you're smart to not go for a "get rich quick" plan.

Those don't work.

The days of making millions online in a week are over.

The days of making money online, however, are not.

There IS money to be made online, but you need to learn to do it the "right" way.

The best way to go is to start your own business!

When I say that, I mean there are really a number of ways to make money online.

Here are just a few of them:

1. Make a website or blog on a topic that you know about.

Then, you sign up to AdSense and other PPC content sharers, and you make money when people click on your links.

2. Sell an actual product

You can still make money by selling advertising space, but this way, you make money by selling a product.

3. Sell a digital downloadable product.

Like an eBook or some other type of digital product. This way, you don't have to deal with postage or anything like that. It's like an online vending machine!

It's really easy to set up websites like these. In fact, you can buy a website on eBay for very very little time or money, and start making money within a week or two of marketing your website!

Anyways, I hope this post helps you to see other avenues of making money online...

Good luck!

-Andy

P.S. (Just a thought) I just published a free book you can find at my website called "How to Start Your Own Online Vending Machine From Scratch In 10 Easy Steps" - it might help you out..