Okay. You have your emergency fund of $1,000.00. (That took me almost a year and I started with money already in the bank!) You have conquered any ‘debt’ that you had by paying back everything you owed. Now it’s time for Dave Ramsey’s baby step three. And this one would be an easy one to skip. For most of us as teenagers, we don’t really have that many expenses. At least nothing like our parents! We don’t have a house payment or an electric bill or any of the other problems that come with adulthood. Although, if you have a car payment it would be great if you had enough in an account to cover those payments, upkeep, gas and insurance costs in case you lost your part time job or source of income.
However, even without a car payment, we do have other things to save for, mainly college and/or a car. So saving for those things becomes step three for us. Obviously, saving up for a car is a huge deal. Even really old used cars can be thousands of dollars. Start doing some research now on how much money you are actually gonna have to save in order to get something that runs and is safe.
College is, in my opinion, much more important. Now we are talking really big money. Now is the time to start looking for scholarships and grants. It is also the time to decide now to ‘just say no’ to student loan debt! Saving as much as you possibly can now will make a difference for you when you get closer to attending college. There are other factors as well, such as choosing to go to a less expensive state school or your local community college.
Ultimately, we are all going to be as old as our parents. Scary thought…..but it’s true. We are gonna want to buy a house and have kids and need a mini van and have to buy life insurance and it will be SO tempting to just spend every dollar that we have coming in. But don’t make that mistake. Take the time to save up 3 – 6 months of expenses as a young adult. Enough money to pay every single one of your bills for at least 3 months in case of some type of emergency. What if you or your spouse loses your job? What if one of you is injured and unable to work for an extended period of time? Many of us have seen exactly these types of things happen to our parents in recent years so we know that it can and does happen.
Have you started seriously saving yet? If so, how is it going? If not, what’s holding you back?