How Much Money Should a 12-Year-Old Have Saved Up?
As a 12-year-old, saving money is an essential part of learning financial responsibility. However, the amount saved can vary significantly based on several factors, including the child's background and the types of activities they engage in. This article explores how much money a 12-year-old might reasonably save and provides practical advice on setting and achieving savings goals.
Factors Affecting Savings Amounts
Much of a 12-year-old's savings are influenced by socioeconomic factors. For instance, a child from a family with considerable wealth may save a substantial amount by the age of 12 due to regular allowances or other financial contributions. Conversely, a child from a low-income household may struggle to save anything at all. According to various sources, a 12-year-old might save anywhere from ￡100 to ￡500 (or approximately $133 to $666) over three months. This range can be affected by the nature of the work or activities engaged in.
How to Determine Appropriate Savings Amounts
The amount a 12-year-old should save ultimately depends on their individual circumstances and financial goals. It is important to remember that even a small amount is better than nothing. Here are some key points to consider:
Income and Savings Goals: Assess how much the child is earning from part-time jobs, gifts, or allowances. Set realistic savings targets based on this income. According to Q2, a 12-year-old working diligently for about three months might earn anywhere from ￡100 to ￡500 ($133 to $666).
Independence and Responsibilities: Being 12 does not necessarily mean financial independence. Savings should be used for needs and wants that are age-appropriate. For example, a musical instrument might be a good goal to set, but college savings are not realistic at this age.
Current Savings Goals: Children with birthday and holiday gifts might have a modest amount saved. This can be used for necessities like school supplies or for fun activities such as going to the movies or attending events.
Practical Advice for Saving Money
Based on personal experience, here are some tips for saving money as a 12-year-old:
Saving Priorities: It's often better to focus on immediate needs and desires rather than distant goals like college. At 12, you can't earn enough to make a significant dent in college costs. Instead, use your savings to invest in yourself by purchasing books, enrolling in classes, or participating in activities that enhance your skills.
Shareholder Savings: Encourage the child to save a portion of any gifts or allowances they receive. For instance, some children are required to save 50% of their youth allowance for unforeseen circumstances or future needs.
Regular Contributions: Encourage the child to save a consistent amount each month, even if it's just a small percentage. This habit can significantly benefit their financial future.
Remember, the key to successful saving is setting realistic goals and maintaining consistent effort. By following these tips, a 12-year-old can develop a strong foundation in financial management and set themselves up for long-term success.