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- I’m only 15, but reading “First to a Million” made me want to start thinking about retirement.
- I want to achieve financial independence, so I’m saving now to take advantage of compound interest.
- I have a job and I save 50% of what I earn. I give 10% to my church, and the rest I keep for expenses.
Ever since I was young, my parents have always included my five siblings and me in discussions about money. They taught us to save our money and spend it wisely.
We are all homeschooled and have a personal finance course in our curriculum every year. Because of this, I started learning about money from an early age.
Why I started thinking about retirement
At first, I didn’t like our personal finance lessons because I was always an anxious kid. The thought of not having enough money for necessities made me feel bad. After learning more about the right and wrong ways to use your money, I no longer feel anxious about money (especially).
One thing that has helped me feel less anxious is finding a job. Another thing is a book that my family and I are reading called “First to a Million”. It is aimed at teenagers and explains how to become financially independent, which means that you have enough money set aside to no longer to have to work.
It was a revelation for me. I love my job, but I certainly don’t want to do it, or any other mind-numbing job, for the rest of my life. That’s why I’m starting to prepare for my retirement now.
I take advantage of compound interest
There are two types of interests: good interests and bad interests. Bad interest is the type of interest you pay someone when you get a mortgage or have a credit card balance. Good interest is when someone pays you, like when you have money in a bank account. I learned that you have to take advantage of the good interests and avoid the bad interests.
Here is an example of the power of compound interest:
- If you save $1,000 per year starting at age 15 and earning an annual return of 7%, then at age 40 you will have $70,327.93
- But if you wait until you’re 25 and save the same $1,000 a year, you’ll only have $27,477.53.
Starting early makes an amazing difference.
I start young
I know one of the biggest advantages I have right now is my youth. Ever since I was so young, I haven’t had a lot (or any) of expenses. So it’s time for me to start learning what I can, save money, invest wisely, and plan for my future.
Starting to learn about finance when you’re young is one of the smartest things you can do. Take advantage of the time you have now, because before you know it, you might have more commitments like a full-time job, a family, student loans, and a mortgage.
I live modestly and save my money
Even though I earn some money from my job, I don’t buy the latest trends and I don’t go out to eat all the time. Instead, every time I get a paycheck, I sit down with my dad and go over it. We put half in savings and give 10% of the tithe to our church, and whatever is left over I put in my expense account. I save a lot, but that doesn’t mean I never spend my money.
Instead, I choose to spend it on things that are really important to me. I bought Animal Crossing for our family’s Nintendo Switch, a weighted stuffed animal, and a few things too. But it’s just more important to me to save most of the money I earn.
Another thing I do to prepare for life is build my credit score. I don’t have my own credit card, but I’m an authorized user on my parents’ cards, so I have a good credit history. I also know not to spend more money than I can afford.
Saving for the future is really important, and it’s better to start yesterday, but it’s good to start now. Take advantage of the resources you have. Use the magic of compound interest, grow your money, and you can have a financially stable life and a comfortable retirement.