Saving Money

Have you ever heard the phrase “a penny saved is a penny earned?” Saving money is important and the more money you save, the more you have. This is because saving money gives you a chance to think about where your money goes and build up money to spend on more important purchases.

How to Save

Saying you’re going to save money is easy, but actually saving money is an entirely different story.

First, you have to have a place to save your money. If you do not have a lot of money to spend, a piggy bank may be good enough. If you want to save at least a couple hundred dollars, you may want to visit the bank and open a savings account.

Once you have a place to save your money, you have to figure out how much you are going to save. You can save in two ways:

• Save a specific percentage of all you earn
• Set aside a specific amount of money each month
• Set a goal to save a specific amount of money

Some people set aside a specific percentage of all they earn, usually around 10 percent. This money is put into savings right away so it cannot be spent. So someone who earns $100 and wants to save 10 percent of all he earns will immediately put $10 into a savings account or piggy bank.

You can also decide to set aside a specific amount of money each month. Maybe you want to try and save $20 a month. If you do, you will have $240 at the end of the year.

Other people set savings goals. For example, you may want to save $200 so you can go on a trip with your school. You can decide to put all of your money toward this goal until you reach it or decide to put a specific amount of money toward the goal each week.

Wherever you decide to put your money and however much you decide to save, you must be able to leave it in savings. If you think you will have trouble not spending the money you have in savings or meeting a certain savings goal, ask a parent or other responsible adult to help you keep from spending your money.

Why to Save

Why do people save money? They save money to get enough to buy something special. They save money to help pay for college or other expenses. They save money so they do not have to worry about money during emergencies. They save money just to save money and watch it grow.

Learning to save when you are younger helps you build financial habits when you get older and have more money to handle. If you practice saving 10 percent of your money now or become disciplined enough to save up for big purchases, you will be more likely to save your money and spend it wisely in the future.

1. Use the “My Savings Plan” Worksheet to create a savings plan.
2. Use the “Saving for Something Special” Worksheet to create a plan to save for something you really want.
3. Do the math. If you saved just $1 a day from now until you go to college, how much money will you save? (Hint: There are 365 days in a year)

1. What are some reasons you can save money?
2. If you cannot save enough money to reach your goal in a specific timeframe, what can you do?
3. Do you have enough discipline to keep your money in savings instead of spending it?