Is there any real benefit to saving money as a teen?

I've always wondered if putting money in the bank as an early teen is worth it. I know it is wise to do, but in the bigger picture, 1-2 thousand dollars won't be a significant factor in paying for my college education. Once i get out of college, ill be making what i have been saving for 10 years in much less than i month. So should i spend my money wisely as a teen and have fun, buying what i want or start saving early?|||Where are you saving from, is it a job you have, is it from an allowance? If it's from an allowance then you're saving your parents money, your parents are supposed to support you anway and what you'd be doing is showing them you're responsible and learning finances early which is a good thing. However on the flip side of the coin they are giving you an allowance to use for your everyday needs so you wouldn't have to bother them often for cash for school or lunch or transportation, etc. Your parents have to support you until you're 18 so that's what they're doing when they gave you an allowance. Support means paying for the basics, and if you wanted something special you need to ask them for it. They are supposed to also be paying for your education.





Now if you're earning money then you're supposed to be paying your parents for your keep like your rent, electric and food (and probably internet service or computer if they are exclusively yours). When you give your parents money they are supposed to be saving it and then using it for you later. Although I never got an allowance my parents saved gifts of money from relatives like on holidays and then they paid for my wedding with that money.





Most people get student loans and if you have to do that and should you default because you are out of work and can't repay then your student loans could be offset and you'd owe them back three or four times and might be paying till you're 95, so yes saving for college and paying your own way whether it be in small pieces like working and taking one course and paying for it and then taking another course and paying for it is a good way to go but if you can save ahead and live inexpensively and then pay for a year or so at a time that would be a great idea.|||The real benefit is that you learn HOW to save. It's true that you probably can't save up a life-changing amount of money as a teenager. But developing the ability to put some money aside and leave it alone is very important. If you tend to think "I don't really need to save that money, I want to use it for ______ and I'll save more later" then you will be thinking the same thing in college, and when you enter the workforce.





If you develop the self-discipline to save money without spending it every time you want to buy something, that good habit will carry over later in life.





If you want an example, here's one. Take two people making the same income, saving the same amount, and earning the same return on their savings every month. The difference is that one person starts saving at age 20, then quits saving money at age 30. The other person starts at age 30 and saves until age 65. Believe it or not, the person who only saved from age 20 to 30 will have more money at age 65 than the person who saved for 35 years. It's because of starting earlier and having that extra 10 years of investment growth. I wish someone had explained that to me when I was young.|||It will teach you how to save and budget. It could also be spending money for college (Spring Break anyone?) Don't assume you'll land a high-paying job right out of college; those days are over. There are also alot of start up costs when you move into your own place, ie: security deposits on apt., phone, power and a thousand incidentals. You'll be glad you did; I wish I had.|||The more money you save now, the more money you'll be able to invest later. If I saved all of my money as a kid instead of spending it on foolish things like candy, I'd be able to have more money now since so,me of my investments have gone up in value.|||Start saving. Its a huge benifit. You never know what you might need it for. You never know what you'll be doing after college no matter how much you plan. Good luck!|||This is a personal choice, thus it's called "personal finance".


However, if you saved $2k while you were a teenager, and left it alone to compound it would be worth almost $59k (if you earned an average of only 7%/yr). http://www.moneychimp.com/calculator/com鈥?/a>





Likewise, there are currently A LOT of people that are currently out of work (or underpaid with degrees), because they automatically thought "I'll be making what I have been saving for N years in my less than a month".





Imagine saving up say $100,000 between now and a few years after you're out of college earning that big paycheck. $100,000 * 4% = $4,000/yr (or $333.33/month) that you could take out of that account ... if it isn't a retirement account, that you don't have to work for. Then imagine a few more years after that, it's $200,000 because you saved your paycheck. $200,000 * 4% = $8,000/yr (or $666.67/month). That you have to do nothing to earn, other than risk the money you have and the stocks/CDs/Money Markets you have it in.








Truth be told, if I had saved most of my income from when I started working (at age 12 cutting grass, delivering newspapers, etc.), I would have at least $1M in the bank right now.


Always put at least 10% of whatever you get into an account that you will not touch at all until you decide to retire. 20% would be better.


Here's another calculator that you can use: http://www.moneychimp.com/calculator/ret鈥?/a>





Kudos to you for thinking so far ahead!