1. Learn to tell the difference between needs vs. wants. To counter the lifelong effects of advertising, it is important you distinguish the difference between a need and want. A need is something you must have (like food, shelter and clothing). A want is something you would like to have that’s not a necessity such as name-brand sneakers or the latest video game. When you have enough savings to cover your needs, then you can focus on your wants.
2. Get rid of costly everyday habits. A $4 coffee drink five days a week equals more than $1,000 a year. Write down your everyday expenses in a money diary. It’s a great way for you to learn how the smallest expenditure can add up!
3. Develop a monthly budget. Compare what you earn in a month (in allowance, babysitting, etc.) to how much you spend in a month. Then using this information, construct a monthly budget to start saving! At such a young age, with simple investments and saving $250 a month, you could be a millionaire by age 40!
4. Start saving; pay yourself first. With the average American spending beyond his or her means it is easy to get caught up in the trend. It will seem tough to see the benefit of this at first, but a savings plan is the cornerstone for financial freedom.