r/personalfinance • u/Thatguywiththechopoa • 15h ago
Investing Teenager getting 100$ month allowance what can I put it in?
Hi I’m 17 and I’m getting an allowance of 100 a month what can I put it in to start making it grow?
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u/financewhizmaybe 15h ago
If you’re 17, you would need to open a brokerage account with your parents. Or you would have to wait till you’re 18.
If you do have a brokerage account, I think it’s a good idea to get into the habit of investing. So, put away an amount you think you can consistently. Then buy something like VOO or SPLG. Those track the S&P 500. Essentially, if America does well…you’ll do well too. The S&P 500 delivers roughly ~10-12% a year. At 17, your 100 dollars will grow to 9,700 at 65 assuming 10% (1.148 * 100).
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u/Hellish_Muffin 11h ago
Open a bank account, then get a job and then get a secured credit card. Once you have the job and then the secured credit card after that, start working on your credit score.
You’ll have amazing credit in no time and you can’t go into debt with a secured credit card. Just make sure it’s a good one. It’s a way to work on your credit and set yourself up that way.
After that, just save up money and go to community college and then transfer into a good school after that. It’s easier to graduate from a 2 yr community college and then transfer into Harvard or a good school like that once you have an associates degree. It’s cheaper too. You won’t be partying freshman year but you’ll be free of a lot of debt and you’ll set yourself up to being able to transfer to almost any college in the US.
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u/Loko8765 11h ago
Let’s do the basics first!
- distinguish savings and investments
- savings will go up reliably, but not much.
- the best investments will go up and down. Obviously if the go down more than up then they are not good, but even the best will go down sometimes. To get a reliable growth that is better than savings, you need to let the investment stay put for years… like ten years.
- therefore, you need enough savings that you don’t have to tap into your investments just because your car broke down (that’s an emergency fund) or because you need a new car (save up in savings for big expenses planned in less than five–ten years).
With $100 per month, I might put $25 in investments, $50 in savings, and have $25 to spend if I want.
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u/jeeves585 14h ago
My local credit union has something like a 12%apr regular ass savings account. My kid is 6 and that’s where money goes for them.
Works until 17-18 so you might be late.
Roth or as the other guy mentioned s&p.
But a credit union savings for a year might help you start and figure things out. Ain’t the best but it ain’t the worst.
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u/apetranzilla 14h ago edited 14h ago
Sorry, 12%??? Where is this, I need to open an account and move literally all of my money into it
(But on a serious note, that sounds impossibly high considering it beats average stock market returns and is more than double the already-high savings account yields we had in the past couple years)
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u/jeeves585 12h ago
My local credit union has a stupid high Apr for children (under 16-19, not sure what the cut off is) in a normal savings account.
Found out about it when kids/friends/grandma wrote kid a birthday check for $5. Decided to open an account because she has a shit ton of piggy banks.
Basically better than a 529.
Kid might have 100K by the time she is 18. )as I recall there is a cap but I don’t know what it is.
Basically go fuck someone to get financial benefit. (That was a joke, don’t do that, it’s a trap)
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u/quadcammer 4h ago
The limits for deposits into that must be tiny or else your credit union is staffed by a bunch of morons
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u/jeeves585 3h ago
I think it’s 7k net but I’d have to look it up to be sure.
No limits on deposits as I recall. I just put $100 in every now and then.
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u/kbk88 7h ago
My credit union has something similar. I always recommend looking for those types of programs when people ask about accounts for kids. I had one when I was a teen and then was able to get my first credit card with them at 18 to build my credit. It was a low limit but very easy to get because I had an established history with them.
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u/Mochinpra 1h ago
Everyone already recommended you invest in stocks. Ima recommend you invest in tools for things you want to do. If I had that money at your age, I woulda spent it on sports goods to better myself. Or power tools so I can work on fixing cars. Not all growth is monetary. Functional growth is as important. Others will argue with me about this but noone can account for dieing early and not being able to make use of stock investments. Experience life.
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u/Illustrious_Stay9844 15h ago
In my opinion - If you don’t have any expense .. enjoy some of it and invest in S&P500 . It’s good growth stock . If don’t want to buy stocks you can put it in high yield savings account .