High School Students, Start Saving

The youth of today is far more in-tune with what’s going on in the world than my generation ever was (geesh, I sound like my Dad now). It’s all linked to technology. Cell phones, blackberries, Internet, and 24/7 programming are all contributing factors. When I was thirteen I was completely naive. The biggest conundrum in my life came on Friday evenings when I was forced to decide between a hostess apple pie or some Andy Cap hot fries to go along with my pepsi-cola. Yes, it was the best of times.
I worked seven days a week (if you want to call it work). I had a paper route on Indian Trail in my home town and made about $40 bucks per week. I spent my money on baseball cards, food, comic books, and even managed to save enough one time to buy a really nice digital watch with a built-in calculator. Nowadays, however, many kids don’t have the option of spending their money so frivolously. Money management is a skill many need to master at an early age if they want to get ahead.
And while I certainly endorse saving, I refuse to toss around outdated cliches like “a penny saved is a penny earned”. It’s not. Inflation, as you probably know, will far out pace any menial interest you accrue on your money in a savings account. What I will say is this however; if you save a portion of your money now, even if it’s just 20% of your earnings, you may wind up saving yourself thousands of dollars down the road.
If you read my blog Why You Should Invest In Education you will see the clear correlation between a college education and the amount of money you can earn. That said, a college education is costly and most students will need to take out a federal Stafford loan, a private student loan, or both to finance their education.
The interest rate on federal Stafford loans currently ranges from 6-6.8%, while private loans vary greatly depending on your FICO score. Obviously the more you owe, the more interest accrues, and the more you pay back, which is why I want you to minimize the amount of funds you need to borrower by beginning the savings process now. I’d much rather you collect 1% interest on your savings now than have 6% interest count against you later.
Start out by setting a modest goal for yourself. If you can mange to save just $39 bucks a week that adds up to $2K per year! The power of discipline the rewards of time.
Remember, it’s never too early to start saving. Perhaps if I saved a few dollars I would have reaped the secondary benefit of saving a few pounds too. But those sweet apple pies were a little slice of heaven.