Stash Your Cash

AN ARTICLE FOR MIDDLE SCHOOL STUDENTS

“Why should I save money now? I’m only in middle school,” you say.

Think about this: A new game system costs $200 or more – perhaps that seems like more money than you’ll ever have.

Now think about this: Buying a soda from the vending machine five days a week costs about $1.50 a day, which doesn’t sound like very much. Multiply $1.50 by five days then by 52 weeks … that’s $325, which is enough for a top-of-the-line system. So now, what looks more attractive … the $1.50 a day for a soda you could probably do without or saving for a new game system?

Pay Yourself First

Budgeting and saving is all about prioritizing and deciding what is important to you. When you evaluate your income and expenses, decide how much you plan to save every week BEFORE you spend anything.

By doing this, you are paying yourself first. The money you save will benefit you later, whether it’s to purchase a new game system, a bike, or more important, go to college.

You might decide to put a certain dollar amount away each week or a percentage of your weekly income if the amount of money you earn varies from week-to-week. For example, you may want to start out saving 25% of your weekly income, or even 50% if you don’t have many expenses.

Break the Piggy Bank

Your money does not grow under the mattress, in a piggy bank or in your desk drawer. Keeping money around the house or in a wallet may tempt us to make impulse purchases on things we don’t need or really want. The best place to keep money set aside for savings is in a savings account at a bank or credit union. If you are saving for college, you can put your money into a special kind of account called a 529 college savings account.

Kids under age 18 will need a parent or guardian to open and co-sign a savings account, but the money deposited will still be your money.

Savings accounts earn interest, which is added to the balance and helps your money “grow.” Interest is money the bank or credit union pays you for letting them use the money deposited into their institution. Interest is compounded, meaning the interest is calculated on the current balance either monthly or quarterly (four times a year), so the more you deposit and the bigger the balance, the more interest you earn.

There are many types of savings accounts and interest rates available; if you don’t already have one, a basic savings account may be all you need to start. Some banks and credit unions have savings accounts with lower or no maintenance fees just for students, so ask the banker when opening an account.

Saving money is a good habit to start and one that will stay with you all your life. You are not too young to start saving … high school and graduation will be here before you know it!



This information is provided by the New York Higher Education Services, Corp. (HESC), the state agency that helps people pay for college. HESC is the nation's largest in-state loan guaranty agency and provides more grant and scholarship money to college students than any other state in the nation.

Free college and career planning help, federal and state financial aid information and online applications for government grants, scholarships and student or parent loans are available on the HESC Web site.


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