We repeat: You need to save money. Start now. Little by little. Make it a habit. Automate it. Set goals. Don’t quit. Then, watch it grow. Here’s a little bit more about savings accounts and the beauty of compounding interest.

THE BARE MINIMUM

Start with a bank account. Get a checking account and at least one linked savings account so you can move money between accounts. A checking account lets you get paychecks through direct deposit and spend with a debit card.

Some banks even offer benefits to teens setting up bank accounts. For example, Simmons Bank offers a Save10 Youth Savings Account for people under 17, which will match your first $10 saved, give you small bonuses for making A’s in school, and even pay you $100 when you turn 18 years old.

You won’t earn much interest on these accounts, but the point is to have your first tool for saving.

SAVE FIRST
When you get paid, immediately set aside a portion for your savings account(s)—you can even automate this.

AN EMERGENCY FUND

Before you confront long-term goals or fun purchases, you need money stashed in case something bad happens—an injury, a job loss or another unexpected expense. That’s your emergency fund.

Try to save enough to cover three to six months of expenses; a few thousand dollars will get you out of a tight spot. Budget money from each paycheck to the fund, and don’t forget to refill it when you spend some.

Never break into this fund for wants; this is only for unexpected but necessary expenses that you can’t afford with your monthly budget.

10%-15% The amount financial experts recommend you save from each paycheck. (Source: tiaa.org)

PAY DOWN DEBT

Part of your monthly budget might include making car, student loan and credit card payments. These debts accrue interest (and add to your debt). As you reduce your debt balances, you also reduce the amount of interest you're charged. Getting your debts paid down as quickly as possible keeps money in your pocket (money you can put into savings). 

LOOK FOR LEFTOVERS

After setting aside money in savings, paying down debts and paying monthly expenses, if there is any money left, it might be time to up your savings or make larger debt payments. Enjoy spending a little of the extra at times, but saving any excess pays major dividends when you start young.

DON'T BE INTIMIDATED

Feeling overwhelmed, intimidated, or like you don't have much to save anyway are reasons young people are often slow to start saving. But it's easier than it seems, so go ahead. Start now. Be brave, and save boldly.