Amazing Kids! Magazine

Saving for Short-Term Goals

By Fatima Yousuf, Money Smarts Editor and Contributing Writer

 

I admit it: I love to spend money. There’s no feeling like being able to choose and purchase whatever you want from a store. As a kid, there are certainly many things to get, whether it be the newest video game or the latest hit movie. And considering that we kids don’t have to worry about making money to support ourselves, it’s very easy to get caught up in spending money. Unfortunately, when we grow up, we eventually will have to learn to make our own money and spend it responsibly. In order to prepare for this, it is important to learn how to save money and spend it responsibly while we are still young and have financial security.

There are several ways to make money as a kid. Some kids can work, some receive allowances, and some have even started their own businesses! When making money, it is helpful to write down some goals as to what you want to buy with it. If you are older, you may want to consider spending money on a car or saving for college. If you are younger, write down some toys, movies, or video games you may want to buy. For some goals, you won’t have to save for very long before you have enough money. These are called short-term goals, and these are the money goals that most young kids will have.

After you have written down everything you want to save for, you need to start earning money! This process can be difficult since you may feel encouraged to spend your money every time you see something nice. However, if your goals are important to you, then they will be worth the wait. When saving money to buy something, there are four things to consider:

  • How much money is saved already
  • How much the item will cost (including any taxes)
  • How much money is expected to be earned each week
  • How long it will take to save

In order to calculate how long it will take for you to save enough money to buy something, you can use the following equation:

Weeks Needed to Save Enough Money = (Cost of the Item You Want – Money You Saved Already) / Money Earned Every Week

For example, say I want to buy a movie that costs $15. I already have $5 saved in my piggy bank, and I earn $2 every week through my allowance. I can use the equation to determine how long it will take for me to save enough money to buy the movie:

Weeks Needed to Save Enough Money = ($15 – $5) / $2 = 5 weeks

This means that it will take 5 weeks for me to save enough money to buy the movie. You can use this equation to figure out what you want to buy first and figure out whether or not it is worth the wait.

Planning out what you want to buy and the time needed to save enough money is a great way to make sure that you can achieve all of your short-term goals. Through this process, you will become more organized and financially ready to manage your own money!

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