Hello Everyone! It is that time of year! Kind of exciting, kind of trash. School is starting again. We talked today and decided to come up with a school year savings goal. After doing some research we found that the average kid makes around $16 dollars a week in allowance. Teenagers with jobs make more and if you are a Gen Z’er who is older you (hopefully) make a lot more than that. So, sticking to our 40/10/50 plan it is definitely a reachable goal to say that for the school year we are going to save seven dollars per week. That’s it. That is the challenge. Seven dollars per week for the next 36 weeks. If you attain this goal you will have $252 by the end of the school year.
Compound It!
In a previous post we explained compound interest. If you do this for one year here is what it will be worth in the future at a seven percent rate of return:
10 years- $449
20 years- $801
30 years- $1,427
40 years- $2544
That’s compound interest. If you did this every year that you were in high school the numbers are even better. After 40 years the number would be $10,174. We can all do seven dollars a week. Who is in for the challenge?
Sign up for our email list and we will send you updates on what your money will be worth every week this school year. The challenge starts August 21!
Budgeting is easy when you’re young. You don’t have anything to pay for. As a teen it changes. You get a car, insurance, class rings, school dances. Your parents might help with some of this, but they might want you to cover some of it. The sooner you start budgeting your money the better. It is a habit that will be important as you get older.
Our mom gets really excited on pay day because she is a self-proclaimed numbers geek. She pays bills every Friday before she even goes to work. We don’t feel the same way she does about paying bills and math, but we do know how important it is to budget. She asked us all to look at the different types of budgets. Below you will see a description of each and how we have decided to budget our money.
The Zero-sum Budget
This is what our mom follows. Basically you take exactly how much you make and assign every penny to something so at the end of the month you come out to zero. Every week she knows exactly how much needs to go to bills, savings, retirement, etc until it equals zero. In months that she gets an extra paycheck that paycheck is assigned to something. She has spreadsheets and gets really happy to sit down and make sure everything she makes is “spent.”
The Proportional Budget
This budget is much less math. You pick a percentage that you want to save, use for necessities, and use for wants. The one most known is the 50/30/20. 50 percent of what you make goes to necessities, 30 percent to wants, and 20 percent to savings. So, if you make one thousand dollars, 500 goes to necessities, 300 to wants, and 200 to savings.
The Pay Yourself First Budget
This budget is where you take your monthly expenses and whatever is left you pay yourself (put it in savings) and then take care of the rest; bills, food, etc. They recommend you take six months worth of wages and figure it out based on the average.
The Envelope Budget
In the envelope budget you have an actual labelled envelope. You use the money in the envelope for its purpose and only that. The one drawback to this is that cash is not used anymore so it is a bit outdated. The system is made for people who have gotten rid of their debit cards so they can get into the habit of being very strict with their money.
Our Budget- 40/10/50
We are doing the 40/10/50 Budget. It is proportional. We don’t really have necessities because our parents take care of those things. So, we are taking 40 percent of our money and putting it in to savings (index funds, stocks, etc.) Ten percent of our money will go to giving. It may be for a gift or it may be for a friend’s lunch. It could even be for charity, but we feel it is a good habit to get into to give back. Then, the remaining 50 percent will go to whatever we have decided to spend it on. Some of us like Taco Bell, some of us have car insurance, it can be a mixture of needs and wants. I am the only one who really has needs (car, gas, insurance).
Budgeting can be really easy or it can be made into a complex spreadsheet. At this point in our lives it is more about getting in to a good financial habit. Even Bom-bo can get into a habit that will turn pennies into dollars. If she saves 4 dollars of her ten per week for the next year she will have $208 dollars. With compound interest at a 7 percent rate of return will be $3742. However, if she is in the habit of doing this and is making ten thousand dollars a year at 18 and saves 40% she will then have $5040 in the bank. Compound this amount and it comes out to $90,763. Now that is a good habit to get into!
I love Sephora. It’s a go-to gift card request for my birthday and Christmas. When I get the gift cards I want to both spend them instantly and make them stretch as far as possible. I also pretty much never go to the store to buy things. I’m an online shopper. But even if I do go into Sephora I can check out what I want and then make my gift card stretch with one little tool. Rakuten!
Rakuten is an online way of saving. At the bottom of this post I will have a way to get $10 instantly if you shop through them. It’s kind of like coupons in our century. You can search any store you’re planning on shopping at and if it’s on Rakuten it will give you the percentage off that you will receive if you buy through them. Right now, Sephora has 8 percent off. This is what it looks like.
I can click on the code of the free gift I want and then click shop now. It will take me to Sephora where I can do my shopping and anything I buy will be 8% off. Rakuten will keep track of all of the shopping I do through them and then they will send me a Big Fat Check.
Right now if you go to Rakuten and set up an account it will ask you for a referral code. Copy and paste rakuten.com/r/ITSGEN16 and you will get ten dollars added to your account when you make your first qualified purchase.
Rakuten is a valuable tool to use for saving money. I don’t know a quarter of the stores that are listed, but if I’m buying something anyway why not buy it through them and get a check sent to me. I can use that check for more necessities or I can put it in my investment account as money saved. The bottom line is-there are certain things we need to have in life. Why pay full price for any of it if we don’t have to?
At my age it’s not hard to become a millionaire. I don’t think most of our generation realizes that. Everyone writing about it is writing to our parents. They forget that we can make decisions too. I’m going to be a senior in high school this year and it’s crazy how many times I’ve been asked what I want to do with my life and then, when I answer, have them look at me and say “you’re just a kid, we will see where you are in 20 years.” You see, I don’t think it’s crazy to say I’m going to be a millionaire. I have something that they don’t have. I’m young. I have time.
I’m not going to bore you with a bunch of math. I’m just going to give a quick and easy example of compound interest. If I have ten thousand dollars and it makes seven percent next year I have $10,700. If that makes seven percent in the next year I have $11,449. In two years I made $1449 just letting it sit there. Imagine what will happen in fifty. That’s compound interest. There is a good graph that shows it here.
So, it all starts today. We have time. The older generation doesn’t. Anything we do today to save money toward retirement puts us ahead of the older generations. In upcoming posts all four of us will be sharing our school year challenge and the different ways we are going to make our money work for us. If you want to join us the first step is opening an account. You will need your parents. Talk to them. Tell them you want to open an IRA.
A quick explanation on a Roth IRA…it’s an account you can put your income into as a tool to make your money work for you. Look at it this way, every dollar you put in there today will multiply exponentially. There are rules. You have to have income from a job. They tax any earnings from that money before you are 59 1/2, but if you’re saving anyway why not make sure it’s not sitting in a savings account doing nothing. Make your money work for you so you don’t have to work forever. If you don’t have a job there are other accounts. Stay tuned for a list of options you have. It’s coming.
Hello! Bom-bo here! Today we are going to talk about saving vs spending.
Right now, at 12 years old, I have about six hundred dollars in the bank that I have saved over the past two years. There are three main sources of money for me; Birthday, Christmas, and working. I like to have money so when I get it for Christmas or my birthday I make sure to save some.
The third way I get money is from working. I can’t get a job yet so I ask my grandfather if I can do jobs for him. I have painted outside and walked his dog for him. I also water the neighbors plants for them when they go on vacation.
I don’t really have a set amount that I save when I get money. I always save at least half. As long as I do that I can be spend on what I want.
Spending
Even with spending I am careful. I am not going to take money out of my savings for anything so I want to make sure I am spending money on things I really want. I’m 12, so most of the time what I really want is to walk over to Taco Bell. I could just order what I want and have no money very quickly. Instead, I only go between the hours of 2 and 5 so I can make sure drinks are cheap.
Saving is the number one rule for financial responsibility. I figure if I can start that now I am on the right path.
I hire people all the time. I have for years. In the years I have spent I often wonder why no one sat certain people down in life to explain interview behavior to them. It’s the only chance one gets to possibly make money, or more money, get benefits, etc. And yet, all too often, people come to an interview with me and break every unspoken interview rule. So, here is a list of job interview do’s and don’t s.
Do’s:
Show up on time- if you cannot be on time to an interview it is very indicative of whether you will be punctual to your future employment.
Dress professionally- even if you are applying to work at a retail store in an entry level position be sure to stand out amongst every other person you are competing against. This could possibly be another article in itself. I’m amazed at what people find to be appropriate interview attire.
Show confidence- walk in knowing what your achievements are that apply to the position at hand.
Know what intrinsic tools are needed for the job- most jobs have a set of tasks that have to be completed as well as intrinsic tools. Ask yourself whether the job requires big picture thinking, detail oriented individuals, empathy, etc. Once you know the answer highlight your strengths.
Be honest- every company has a hiring process. Don’t bet on them not having one. I cannot count how many times I truly like someone and find myself not moving forward with employment because they weren’t honest. I know it comes from trying to impress me, but honestly is always more impressive. I can teach you the job, I can’t teach you to tell the truth.
Don’ts
Apply for a job you aren’t equipped for- just because you want to fly doesn’t mean you can be a pilot. Actually read the job description and be realistic in what you can do.
Be arrogant- in life you are going to come across people who know more than you and people who know less. Assume the person interviewing you has an inside scoop. They may not actually be trained to do the job, but they’re definitely trained to know the culture of the company hiring for you. Arrogance is rarely part of a culture.
Overshare- this is probably one of the biggest ones. Oversharing can be two fold. There are unscrupulous employers that still have backwards hiring practices and won’t hire someone because they have kids or are married or many other reasons. The other side of it is that telling too much about your life can be a sign that you cannot separate business and personal. That’s important and often a fast track to lack of employment.
Lie- I know I covered this at the top, but I need to say it again. Do not lie in an interview. Ever.
Interviews are easy. Just always remember this may be the only chance you have to get this job. Highlight your strengths and be humble in your weaknesses. Be prepared for any questions you may encounter in the interview. In coming posts we will discuss common interview questions and best practices for how to answer them.
I have done on-boarding for multiple companies. I cannot count how many times someone has said they don’t know how to fill out tax forms. The directions provided with the form are confusing and lengthy. In reality, the form is incredibly easy. Let’s take a look.
Box one is simple; write your name. Your full name. Tuszmo wrote the shortened version of his name the first time around. Don’t do that. Write the name your parents gave you. Next, write your address underneath.
Box two is your social security number. If you have not memorized it, do so now and write it in the box.
Box three is going to be single. If you’re married your parents can’t claim you. That post will come later.
Box four should not apply to you. Skip it.
Box five is what confuses everyone. If your parents can still claim you, write zero. You’re a dependent on their taxes and they will claim you. You don’t have children, you aren’t taking care of any disabled family members. It’s very simple.
Box six is an option to have more money taken out of your paycheck to cover taxes. To date, I have not seen anyone do this, but you have the option to do so.
Box seven is a way of claiming exemption which means taxes are taken out. I have seen people do this. Later, I have seen them have to pay come tax return time. At your stage in life, don’t claim exempt.
Sign AND date your form. Now, you are done. Boxes 8-10 are for your employer to fill out.
I know from experience you will impress your company by being prepared and knowing how to fill out this form. If you are someone who can claim yourself stay tuned. That post will come in the future.
Hi I’m Tuszmo. I’m am the oldest member of Gen Z contributing in this blog. Also the only one that has ever been in the workforce. I found out pretty fast that I don’t want to work a 9 to 5 job for the rest of my life.
My Financial Goals
Retire by 40
Own property to rent
Have a steady source of passive income
Have enough money to support a family
My main goal is to retire by 40. I will do this through investing in stock and also investing in real estate ( one of the best forms of passive income). As time goes on, I will share with you what I am doing now to achieve these goals.
Hi, I’m Bogsworth and I was asked to sit down and really think about my financial goals.
I feel it’s important to have financial goals in life, especially as a teenager. You should be trying to think about how you are going to pay for college, your first car, and eventually, your home. You should even be thinking about how you will provide for your children if you choose to have them. Here are some of my goals.
I want to go to college for teaching, history to be specific. It will cost about thirty two thousand dollars annually for my schooling. I intend to have no student loans. I can achieve that goal by saving money now. By putting $3 away every day for a year, I will have $1095. Imagine if you do this for 8 years. You’ll have $8760! Instead of buying that candy bar, save for college!
Other goals I have are to save for a car and a house. My sister and I plan to rent an apartment together after high school. That will cut the cost in half. By getting a job at 16, you’ll be making an income, and part of that can go to your car and house.
I also want to be able to provide for my children, afford a 4 bedroom house in a nice neighborhood, and not have to worry about money.
I hope this helped you form or review your own financial goals. Stay tuned for the next post!
Hi, I’m Bom-bo and this is my part in the Gen Z money blog. You will always know it’s me because the text will be in orange. Every blog I do will be about my financial goals and what I am doing now, at 12 years old, to achieve them.
Right now, my financial goals are to go to school through college. So, here goes…
Go to College
Have a decent car
Have a nice house, my family is pretty minimalist. I don’t need a mansion.
Have a career.
Right now, I know I am going to live with my sister while we are both in college to save money. I don’t really spend much money and I save more than half of what I get. I do love Taco Bell and there is one close that we walk to, but I won’t go unless it is between 2 and 5 when they have dollar drinks. Stay tuned, in upcoming posts we will discuss other ways to make money as a kid and save money too.
