Many teens find themselves at a point in their lives when they start wonder­ing about getting a part time job. For some this is an exciting prospect, for others it feels like a chore. When you need to start working will be depen­dent on your financial needs. So how do you know if you are ready? If some of these statements apply to you, it may be time to start looking for a job.

• You are constantly broke
• You are getting tired of always asking for money
• You desire financial independence
• You think it’d be fun to meet new people
• You need to start building up your resume
• You want to buy a car so you can stop taking the bus or relying on your parents for a ride
• You are planning on attending university and will be paying for some or all of your education.

It’s important to think about what kind of job you would be interested in and able to do. There are countless options out there for students wanting part time work over the summer, including working in the food and beverage industry, babysitting, landscaping, retail, office work or marketing products at events across the city.

How much will you make?

Many high school students step into the workforce with a minimum wage type job. In Alberta, the minimum wage is $9.40/hour.

Before you get a job, you need to realize that it is a big commitment. You may find you have less time to participate in your favourite activities or spend time with family and friends. You will need to learn the art of finding a balance between your work and your personal life.

At this stage of your life, your expenses are probably pretty low. It makes good sense to save as much as possible while these expenses are low – even if you’re not earning that much. If you feel like you don’t have enough to save so you shouldn’t bother – think again!

Even saving as little as $5 or $10 a month can add up – especially if you have it in an account that earns interest and is compounded.

Once you get into a saving habit and you’ve got a pool of money set aside, there are only two things to remember:

1. Don’t spend it

2. Watch it grow! To do this, shop around for an account with the best interest rate.

Interest:

At first, it may not seem like your savings are growing by much – especially if you don’t have that much saved up to begin with. Eventually though, the interest you do receive on your savings will cause them to grow. The more money you have in your account – the more interest you get.

It’s important to look at how much interest your account pays. If your account pays 2%, you will be making $2 at the end of the year on the $100 you have in that account. If your account pays 8%, you will be making $8 at the end of the year on the $100 you have in that account.

Now this may not seem like that much of a difference, but what about if you have $1,000 in that account? Or even $10,000? At $10,000, you will be receiving $150 in a 1.5% account, or $400 in an 4% account. Now – the difference is significant.

Let’s take a look now at the different types of interest:

Simple interest: pays you the stated rate on the money you have in your savings – and that’s it. If you have $2,000 in your bank account right now and the interest rate is 3%, you will earn $60 on your money at the end of the year.

Compound Interest: is the interest that’s paid on the initial deposit, and also on any interest that’s been earned in previous periods. Compound interest is better than simple interest because it lets you earn interest on the money you saved, plus on the interest you have already made on that money. It gives you interest on your interest.

When will my money double?

A good way to see how many years it will take your money to double with compound interest is to use the Rule of 72.

The Rule of 72:

The years to double my money = 72/rate of return compounded annually. That means if you grow your money at 10% compounded annually, it will take you 7.2 years to double your money (72/10 = 7.2).

At 8% compounded annually, it will take you 9 years to double your money (72/8 = 9).

That means if you have $2,000 invested in your account at 8% interest and left it for 9 years, you will end up with $4,000.

If you do not have one already, credit organizations will soon be trying to offer you a student credit card. Used properly, credit cards can boost your credit rating and make managing your finances simpler by reducing a multitude of payments, some of which can be made automatically to a single payment per month.

The bad news is that credit cards can be really expensive and these costs can sneak up on you and overwhelm you before you know it. Credit cards come with many fees, some up front, some hidden in fine print agreements that can create unexpected problems for you.

The worst aspects of credit cards only appear if you are late on your payments. Interest fees and interest charges can pile on quickly, especially when the attractive interest rate you were offered to get you to sign up suddenly increases (as per the fine print agreement).

Credit cards can weaken your resolve and lead to overspending. If you have a credit card, you should never ask yourself if you can afford the monthly payment for all of your purchases. Instead, as with everything you buy, you should ask yourself if you really need it and if so, if you can afford to pay for it when the bill comes due at the end of the month.

Keeping track of payments tip: only have 1 credit card!

Payments can be easily tracked online and downloaded. Personal finance software or spreadsheets can help you track and manage both your spending and payments, helping you keep track of your budget.

Tips for Credit Card Management 

1. Shop for credit carefully– check interest charged and annual fees and apply for the credit card that suits your budget.
2. Pay off the entire monthly balance to avoid interest charges, or make the biggest payment possible you can, over and above the minimum monthly payment.
3. Remember bargains are not really bargains if you end up paying interest on your credit card.
4. The dollar you spend today on credit is one dollar you won’t have in the future. It’s important to understand whether the purchase is a “want” or a “need.”
5. Keep your credit card receipts and review your credit card statements monthly to make sure there are no errors.
6. Set a monthly limit for each credit card – once you reach your limit, put your credit card away to avoid over-spending.
7. Remember the monthly budget for your credit card spending is a maximum spending limit, not a minimum.

Have you ever walked into a store to buy a sweater, only to leave with that sweater, a pair of jeans, a belt and accessories? Many of us have a problem with impulse buying and purchasing items we don’t really need.

If you’re an impulse buyer, here are a few tips to help you resist:

• Avoid or limit trips to malls and online buying sites
• Pay cash for items – it’s harder to part with than swiping a credit or debit card
• Leave your credit card at home
• If you see an item you really want – sleep on it. Do you feel you still can’t live without it the next day?
• Keep in mind your latte factor – and that small items really add up

Before I buy:

Don’t just blindly buy an item – really give some thought to your next purchase. Ask yourself the following:

1. Do I really need it?
2. If I don’t need it, do I really, really want it?
3. Will this item make me happier?
4. Am I sure I will use this item often?
5. If I buy this item now, will I have enough money for stuff I might need or want later this week, or later this month?
6. Will buying this item interfere with paying off debt?
7. Do I have the money for this item now, or can I wait to buy it so I can
8. save for it?
9. Can I get it cheaper somewhere else?
10. Do I have an item, or can I buy a cheaper item, similar to this one?

If you think about these questions and answer them honestly, you’ll get a good idea of whether or not you should buy the item. If you said yes to questions 1, 2, 3, 4, 5, 7, and no to 6, 8 and 9, chances are this is a good purchase for you.