Saving for a rainy day

How many of you out there are planning on taking on a full-time job and buying a house/renting an apartment right out of school?  If you are one of the overwhelming majority of college students still seeking employment you are probably doing the complete opposite.  You're living at home with mom and dad and working part-time so you can still afford to do some fun things this summer right?  Of course!  Well, working part-time is a great way to keep those green stamps flowing in, but where is that money going?  You probably don't have too many expenses, especially if your parents love you enough to not charge you rent, so it may be going to a car payment, cell phone bill, gas, and personal expenditures on a credit card perhaps.  Is the rest going into savings and if so what kind?

You should be paying yourself first and then using what's left for your fun this summer.  What this means is essentially budgeting backwards in comparison to what you're used to.  If you are making, let's say, $400 a week this summer, you should be setting aside atleast 15%-20% (being conservative) of that and putting it into some sort of savings that is growing interest (this means that putting it in a piggy bank in your room is unacceptable).  After you pay yourself for the week then you may use the rest of your money to go to the movies, go out to eat, or have fun with friends.  If you are not disciplined enough to keep the money in a savings account that is "accessible" you may want to look into placing the money into accounts like mutual funds, permanent life insurance, or (if you have enough cash) purchasing some CD's.  These accounts will force you to keep the money in savings and growing with interest.  Saving in this way will give you the cash accumulation you need to achieve some of the goals we were talking about yesterday.  Sticking with a regiment like this will deliver almost $2,900 in just 6 months! And, if you are making more then $400 a week kudos to you and you can expect to see even higher results from your savings plan.

later days

Pete