you're at the mall with friends and you see the most amazing shoes, just calling your name. You are ready to try them on when you peek at the tag. Your heart sinks as you realize buying these shoes now would set you back a couple paychecks. So, what do you do? Buy the shoes or save your hard-earned paychecks? You should dream big - then build the groundwork for your better tomorrow with a solid financial plan.
Make a savings plan for those shoes, or even better, a bigger purchase like your next phone or computer. Say there is a laptop you're eyeing, and it costs about $500. Make sure to add it to your monthly budget. Then, depending on how much you can set aside each month, figure out how long it will take you to save up for it. Maybe it looks something like this:
With a credit card, you can walk into Best Buy and walk back out with something as pricey as a laptop all within a couple of minutes. However, giving yourself more time to pay upfront instead of using credit is way more beneficial to your wallet. When you save to cover the cost in its entirety, you only pay the $500 to purchase it right then and there. Making a large purchase with your credit card may earn you reward points or seem helpful because of a low monthly payment, but it also means that the $500 price tag will begin to accrue interest. Over time, you'll find that you have actually paid closer to $600, $700, or more after adding up all the extra money you paid in interest to the credit card company.
And in the same fashion, things like birthday present money and scholarships can help decrease your savings time. Using a savings account like our Future Funders accounts will give you an extra edge as you gain interest on the money you've deposited. Plus, get rewarded even more with a stamp card! Make 8 deposits of $25 and get $25 added to your account from SunWest. You'll be reaching your goals before you know it!
Get an account that will help you earn more through dividends on your savings so you can fully take advantage of your earnings. With the proper planning, all of your dreams will be within your reach before you know it. From new shoes to a laptop for college, you will be able to enjoy the present while you create a solid foundation for the future you deserve.
Get more practice managing your money with our Future Funders accounts for ages 13-17.
October 23, 2020
Published by SunWest Credit Union
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