Expert: Gina Boykin - 1/23/2009

Question
hello my name is Richard.. im a 21 yr old male.. i want to invest and make my money grow.. instead of putting it in my bank.. cause im always wasting it.. how do i start..

Answer
Start with a goal.  What do you want to accomplish first? Do you want to save up $1,000 to put away as an emergency fund? Do you want to have money for retirement? Do you want to save up to buy a house?  What is your reason for saving...other than not being broke :).  Start there.  If you’re having a problem staying motivated enough to save, cut out a picture of what you want and put it somewhere that you will see it every day.

Since you may have a spending problem, do a little experiment and write down everything you spend money on for the next 30 days.  You may find out a lot about yourself, and where your problem areas are.  This will also help you create a spending plan, otherwise known as a budget. You can get simple budget forms from the internet or use a Microsoft Excel template.

So at this point you have goals and a plan.  You’re more than halfway there!  Now you just have to stick to your plan.
Education is also key.  Your goal will determine what you need to learn, though.  If you want to save up for something in the near future (like in the next 10 years), then the money should be in a plain old savings account or certificate of deposit (CD).  For this, you can learn about CDs and how they work.

For your long-term plans (10 years or more), you’ll have to learn about stocks, mutual funds, bonds, or maybe even real estate.  Start with investopedia.com and youngmoney.com. Those are great sites to learn the basics, and you can decide what type of investing you’re interested in.