MONEYTALK with Al Suffrin
Whatís the best way to save money for my Ďnewí used car?
Staff Report - Nov 09, 2006
Dear Mr. Suffrin: Iím 13-years-old and Iím saving my money so I can buy a car when I turn 18. I earn $60 a month babysitting for neighbors. I also get $40 per month for doing my chores around the house. My mom gives me $10 for every A I make on my semester report cards, and I always get three or four of them, so thatís $60 to $80 per year. She pays for my clothes and other expenses. How much should I save for my car - and where should I put the money? I have $500 in the bank now. - Looking Ahead in Hahnville
Dear Looking Ahead: Assuming youíll be able to earn 5% interest on your savings, the $500 youíve already put away plus the $110 per month you anticipate making will grow to $6,442 four years from now, when you turn 18. Whether the $6,442 is enough for the car and your rainy-day account depends on the type of car you want and what you feel youíll need for a rainy day.
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