MoneyTalk

How can I save money for my ‘new’ used car?

Dear Mr. Suffrin: I’m 13-years-old and I’m 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 that’s $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 you’ll be able to earn 5 percent interest on your savings, the $500 you’ve 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 you’ll need for a rainy day.

The money should be invested in short-term certificates of deposit (6-month to one year) or a combination thereof. CDs yielding at least 5 percent are what you want.

The CDs should mature on the date the money will be needed for the car purchase. Talk to a banker or broker for details.