The Importance of Saving | Teen Ink

The Importance of Saving MAG

By Anonymous

   Savingmoney when you're young age is an important lesson. All good lessons and habitsbegin early, and saving is a skill that everyone needs. Many people - adultsincluded - do not have a good sense of saving for the long run. Besides being agreat way to ensure you have enough money for your old age, saving money when youare young can only help your future.

I have been lucky to learn thislesson early because I have had a lawn business since I was ten years old. Of themoney I make, I spend approximately ten percent and save the otherninety.

Making sure you don't spend too much and continuing to save is agood way to accumulate wealth. I have put my earnings in a bank, and withinvestments and regular interest rates, have almost doubled my savings. Yourmoney will double after twelve years at a modest rate of six percent interest.Many teens I know spend all the money they earn so it never has a chance togrow.

Teens should realize that now is a prime time to begin saving. Inhigh school many parents pay for almost everything, so expenses can be small. Ifyou have a job, you should have fun with some of the money. But you should alsosave some so that it will grow for you without your working, and begin planningfor your future. When you spend money, you not only lose that money, but also theinterest you could have accumulated by saving it.

After high school,college is expensive and then "real" life begins, with expenses such asfood and rent. If you can hold onto a good portion of the money you earn as ateen, going to college and buying a house will be much easier. The earlier youbegin saving, the more time the money has to grow.

If you are in yourthirties without any savings, you will always have to play catch up. If you canjust save $100 a month for five years at a ten percent interest rate, that moneywill be worth $7,750 in five years. After 25 years continuing to save $100 eachmonth, your savings will be worth $132,000. These statistics show that theearlier you begin saving the easier it is to create a nest egg.

Later inlife it can be hard to start saving because life is more expensive and you mayonly have enough to pay your bills. If you want to buy a house and have a family,you need capital, which comes from savings.

Many say money cannot make youhappy (which is true), but money can help you lead a stable life.

Saving early will mean you will have to work fewer years when you are older andallow you to spend time doing things you want. You also want to be financiallysecure so you can live the way you want without worrying. Also, you will be ableto retire at a reasonable age.

Think: if you have two million dollarscapital when you retire, that money growing at a modest five percent annualinterest rate will produce an income of $100,000 a year without you working anhour. That is without even mentioning the possibilities of wise investing in thestock market or mutual funds, where sometimes you can increase your capital by ahundred percent!

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This article has 2 comments.

i love this so much!

Claudette said...
on Oct. 12 2014 at 11:00 pm
hi! the article is so nice, can i know who was the author for this?