Saving from a young age has many advantages. Saving can help form habits and the sooner money is saved, the faster interest will be earned. You can use your savings to pay for school fees, buy special items, or continue saving until you're an adult to pay for your first car or house down payment. Saving is simple, but not easy. You must be able to manage your finances, resist the temptation to waste money, learn powerful saving techniques, and take responsibility for your actions.
Step
Method 1 of 4: Creating a Savings System
Step 1. Take four jars
To get used to the culture of saving, you should have a system. You can use four jars to determine how the money will be used. Ask parents if they have four unused jars at home.
If you don't have a jar, you can use four empty soda cans. The soda can should be large enough to fit a coin or punch a hole in the side with scissors. Ask your mom or dad for help
Step 2. Label each jar
In this system, you will label four jars according to their purpose: “Saved,” “Used,” “Donated,” and “Developed.” You can determine how much money is allocated to each jar when you receive money. The labels on each jar have different meanings:
- Saved. Fill these jars with money that won't be used now or in the near future. Use these jars to save money to buy large items, such as bicycles or video game consoles.
- Used. Fill this jar with money to use every day or for something you want to buy next week.
- Donated. Fill the jar with money that you plan to donate to charity or give to someone who needs it more.
- Developed. Fill this jar with money that will be invested in a savings account so that the interest accumulates over time.
Step 3. Decorate your jars
To make saving fun, try decorating your jars with pictures that inspire you. Cut out pictures from old magazines and glue them to jars. Make sure you ask your parents for help in cutting and pasting the magazine pictures into the jars.
For example, paste a picture of a bicycle in a “Saved” jar or an image of a person helping others in a “Donated” jar
Step 4. Use these jars to determine how you spend your money
Each time you receive money, determine the amount that is divided into your four jars. For example, if you receive Rp. 40,000, you should set aside Rp. 10,000 to each jar or put Rp. Everything is up to you!
Always remember your goal of saving when dividing your money into four jars. Don't forget, the more money you save, the closer you get to your goal
Method 2 of 4: Setting Goals and Habits
Step 1. Think about what you want to do with your savings
One of the reasons why many people can't reach their financial goals or can't save is because they don't know what to do with their money. Do you want to go to college? Buying a laptop? Buying a car? Determining what you want from the money you receive is the first step in saving.
If you have trouble knowing how your money should be spent, consult with people you know well, such as your parents and close friends. Brainstorming with others can help define your thoughts and revive your dreams and goals
Step 2. Set a saving goal
Once you know what you want to do with your savings, calculate how much money you need to save each week or month (depending on how many times you receive money, your salary, or another source of income).
- The basic rule is to save IDR 10,000 every time you receive IDR 30,000. Saving 1/3 of your income may seem overwhelming, but it's the only way to build your savings to value. Saving 1/3 of the money earned is one of the best saving strategies ever. Once started, you will get used to it.
- In addition, consider the amount of savings you want to have and when it will be achieved. This will help determine how much money is saved each week or month. If you want to have IDR 1,000,000 in a year and you receive IDR 50,000 per week, set aside IDR 20,000 every week to achieve your goal.
Step 3. Ask your parents to help you open a savings account
Getting a savings account is a great way to save money and earn some interest. In addition, a bank account will encourage good saving habits.
- If you are under the age of 18, the savings account may have to be in your parent's name. Joint accounts are one way banks offer accounts for children. Your and your parents' names will be on the account for liability and legal reasons. It looks complicated, but you won't be able to spend money too easily because your parents will know if you withdraw funds from your account.
- Look for a bank with as few fees and minimal balances as possible. Many banks provide savings options for “young savers” with zero or minimal fees.
- Don't forget that some banks may offer custodial accounts. This account is an investment instrument that prohibits children from gaining access to the account and the funds in it (usually between the ages of 18-21 years). If this is the only option from your bank, try finding another bank with a standard savings account or wait until you're a bit older.
- If you don't want to open a savings account for some reason, you can create your own "bank" by keeping the money in a lockable container and giving the key to a parent or other trusted person. Better yet, as long as you trust your parents to control your savings, they can open a new account in their name and deposit your money in the bank.
Step 4. Monitor the amount of money received
You can develop and stick to a budget only if you know how much money you're getting. Find out and monitor the amount of money received from various sources (e.g. pocket money, gifts, income, baby/child care money, etc.)
- If you have a bank account, you can easily monitor the amount of money you have. Just search the internet for a bank statement or visit a bank branch office and ask for a statement. Print and save your bank statement in a binder to help monitor the progress of your savings. This will come in handy when you have to calculate taxes or monitor a mortgage.
- There is a smartphone application that makes it easy to deposit money into your account. Many banks allow their customers to take pictures of checks using their mobile phones and deposit them into their accounts.
Step 5. Create an expense logbook
Keep receipts or make a list of all items purchased, even food. Write down the date, item, and amount spent. That way, you know exactly where the money is being spent.
There is also a personal finance app that you can download to your smartphone to keep track of your expenses. Some of these apps even let you take a photo of your receipt which is then calculated in the app. This method is great for reducing your expenses
Method 3 of 4: Reducing Expenditures
Step 1. Bring as little money as possible
Don't carry too much cash in your wallet, and try not to always carry a debit or credit card. That way, you won't always be tempted to spend money on unnecessary items or make impulsive decisions when you're in the store.
Instead of carrying all the things you might need (all available cash, debit cards, credit cards, etc.), carry only what you definitely need. Just take a few tens of thousands and (if you insist) one credit card when you go to (for example) the supermarket
Step 2. Save money before spending
Whenever you receive money, whether as a gift or pocket money, immediately set aside some for savings. This will ensure that you don't spend money that you intended to save. The good thing is, when the savings have been set aside, the rest is free for you to use! Of course, you also still need to enjoy life and have a little fun.
Imitate US behavior. The US government cuts tax revenue before its citizens receive their salaries. If you immediately set aside the savings portion of your income and store it in a place that is difficult to access, you will never have time to think that the money can be spent. (quickly out of eyes, quick out of mind)
Step 3. Use money only for things that are important
For example, spending money in the future is a wise move. You can take pride in using the money earmarked for investing and increasing your earning power in the future.
- For example, save if you plan to go to university. If you aspire to be a singer, take a singing class. Spend money on nice clothes if you plan to work in an office. Money can be spent to promote yourself, and in the end make money.
- However, if you adhere to good saving habits, a small amount of spending is still allowed. Think of it as an investment in your present happiness.
Step 4. Put value on money
Rupiah is Rupiah, but what does it actually mean? Do not forget, overall (except gifts) money is something that is received in exchange for doing something. When you work, you trade your time, energy and thoughts for money. You need to decide if what you want is worth the time and effort it takes to earn the money and buy the things you want.
- For example, if you receive IDR 50,000 per week and want to buy a video game for IDR 500,000, that means you need 10 weeks of pocket money to buy the game. The saving time is quite long, so think about whether buying the video game is worth it or not
- What's more, can you buy the game while balancing other needs, such as putting money in "Used," "Donated," and "Grown up?" jars. Every time you spend money, you make an exchange. Rethink the value carefully and make an appropriate decision.
Method 4 of 4: Increasing Income and Savings
Step 1. Find odd jobs for neighbors and friends in your neighborhood
Obviously, you can save if you have money to save. Increasing the money received will also increase the money that can be saved. Even if you're not old enough to take on a traditional job, there are ways to earn some extra money.
- Start a lawn mowing business in the summer and a snow dredging business in the winter. You can even clean up dry leaves in your neighbor's yard in the fall. Charge rates according to the type of work performed and the size of the page being worked on. Advertise your services by distributing and pasting brochures and asking neighbors if you can put ads on their fences.
- Provide pet care services. Pets need to be taken care of and many employers prefer to use the services of a trusted child or teenager rather than sending their pet to a cage.
- Take care of the neighbors house when they go on vacation. Take care of the pets, water the plants, and pick up the papers. This is a great way to foster neighborhood harmony while making money.
Step 2. Sell the item
Open a toast or lemonade stand in the summer. Collect used video games at the nearest game store, or sell old clothes that are still in good condition. If you are used to buying and selling items on the internet, try selling used baseball cards, electronics or collectibles on various sites on the internet. Hold a garage sale once or twice a year.
There are many great ways to earn extra cash by offering products for sale or exchanging your old stuff for cash. Use your creativity to reach your saving goals
Step 3. Save the “gift” money
If you receive money on vacation or on your birthday, always set aside at least half of it for savings. Sometimes, some even provide bonds for college or money allocated for long-term savings. This money is saved in the bank, not in a piggy bank.
Don't forget the principle of "quickly out of the eyes, quick out of mind." Immediately set aside your savings portion. Convince yourself that you only have Rp. 60,000, not Rp. 120,000 from your birthday by eliminating half of it in an instant
Step 4. Save your change
Put all the change from leftovers or other money in a jar or piggy bank and count them every once in a while. You'd be surprised how much change you collect and save without any effort!
Many banks (especially if you have an account there) have coin counting machines and are free of charge. So, don't ignore the change you receive
Step 5. Negotiate with parents
See if your parents are willing to “match” your savings to encourage good saving habits. Say, you deposit IDR 400,000 in savings a month. You can ask your parents if they are willing to match your savings and add IDR 400,000 from their savings.
