Eleventh grader Caitlin Keegan of Dunkirk, MD is Navy Federal’s Youth Super Saver of the Year! She was kind enough to share some of her wisdom about managing, budgeting and investing:

“As a kid, money management is usually simple.  Parents typically control the decisions behind your spending, but it’s never too early to form good habits. Being smart about money is not something that comes naturally. A good way to practice is to start asking your parents about how they use their money. I didn’t start doing this until the first time I went to buy pizza by myself.  I realized, staring at the receipt, that I didn’t know how to calculate a tip!  When I got home, I asked my mom and she showed me what to do. I would rather learn basic things, like calculating a tip, at home with my parents than on the spot.

I spent an afternoon doing an activity that completely shifted how I viewed money.  I used the Internet to look up the median salary for the career I wanted to pursue.  I also looked up realistic numbers for necessary monthly expenses, such as housing, insurance, heating, and food costs.

I added in costs of things I wanted, but did not need, such as vacations. I was amazed at how stretched my budget was when I included everything I wanted.  In fact, there was a deficit, which I decided to consider as debt.  The debt continued to grow month after month.  However, when I decreased the cost of housing and “traded in” for a cheaper car, I had more wiggle room.   I also realized just how drastically costs can change depending where you live.  I could go a lot further with a dollar in Memphis than in D.C.

Saving and investing are great skills to practice while you’re young.  In addition to forming good financial habits, you will also be able to take advantage of compound interest if you don’t withdraw your money.

The longer your investment sits, the more interest you will collect.  If your money sits long enough, it will begin to grow exponentially fast, similar to a snowball rolling down a hill. Or, you may feel more comfortable with starting with a high-yield savings account, such as the SaveFirst account from Navy Federal.  I use my SaveFirst accounts to save for more immediate major purchases, such as costs associated with college.

Money plays a huge role in our lives.  Learning to manage money as a kid will make your life much ‘richer’ in the future.”