If you’re a high school student or in college and worked over the summer to make some money, then you can get started on the two actions I talk about at this site – open up an online savings account and start a Roth IRA.
I know you think you need all the money you made over the summer or the part time job your holding during school but it’s easier than ever to start saving and investing when you’re young and it’s crucial to your financial practices throughout your life.
#1 – Open an Online Savings Account
Below is a list of online savings accounts to get started. These types of accounts make it easy for you to open up an account quickly with as little as $1.00. These accounts also make it easy to transfer funds to the account. However, please set this account up so that you are depositing money on a regular basis (for example, monthly) and automatically (say from your checking account) so you’re not tempted to spend all of what you make.
What is APY?
Some online savings accounts currently pay 5.05% APY. APY stands for Annual Percentage Yield. The APY is similar and sometimes confused with APR – Annual Percentage Rate. But it’s different in that Annual Percentage Yield is calculated using the effects of compounding. Typically APY is compounded daily.
Here are some online savings account that allow you to open up an account with a minimum of a dollar to start:
There are plenty of online savings accounts out there and if you don’t want to do a bunch of research then one of the above will do you good. Just get going and set your deposits up automatically every month or whenever you can afford to.
However if you would like to do some more research here are a couple sites to get started with:
It’s extremely easy to say, “Oh, I’ll just do it when I finish college and get a great job.” Well, there’s more going on here than starting to save when you have money. It gets really hard to do it when you hardly have any money.
This is a common scenario for students who finish college and start a new job with a bunch of school loan debt and possibly bad credit card debt. Your money is your money!! Respect it by respecting yourself by doing the right thing – pay yourself first no matter what!!
The money in your life makes a lot of things happen and makes you act and react to life’s events as they are presented to you as well as the relationships you have with other people.
#2 – Open a Roth IRA
If you’re under age, you’ll need your parent or guardian to open a custodial account for you. After that, if you have or had earned income (money from your job) for 2007, you can invest in a Roth IRA.
Try this mutual fund and follow the steps here to get going. If you don’t like this fund make sure you read this and this before you invest in a mutual fund that you’re interested in.
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Some sound advice there