That is wayyyyy to broad a question to answer effectively but I would suggest you don't go below nothing. I am below nothing at the moment (although not by much) and am clawing my way back up towards nothing. It sucks to be working towards nothing so avoid that.
If you can save a little money in your very early 20s do but I don't think it is that big a deal as long as you don't stack up debt. For example if you want to go on a trip around Europe and have the money, do it.
You could put together an emergency fund to help you hit the ground running when you start working seriously. The typical number thrown around it to have enough money to survive for 3 - 6 months. I missed out on some opportunities when I was your age like European holidays with friends because I didn't have the money. So having some cash in the bank isn't just for rainy days and retirements, it is also for fun.
The exact amount would depend on your specific circumstances, but I would try to keep your account above $2,000 if possible. If you suffer some minor calamity (car accident, sudden injury or illness that requires hospitalization, etc.) your insurance might not cover everything.
From what I understand of 18-year-olds, if you earn more than you spend, you're ahead of the curve. Most 18-year-olds are broke.
If you want to be way ahead ... save up a grand or two as an emergency fund, pay off any and all debts, then increase your emergency fund to 3-6 months of living expenses. Don't ever go back into debt. Always live below your means. Pay cash for everything. Start investing early. You'll be rich by the time you're 40.
This is really the point. I'm approaching 24 and living frugally to get out of debt. If I'd been a bit wiser at your age right now I could be living frugally to put money into a retirement fund and travel more. Don't make my mistake.
I'm 35 and have been doing the same. I owe on the house and my student loans finish up in 4 years (Public Service Loan Forgiveness). Other than those two, I have paid everything off... well, thanks to a kidney stone I own a hospital $2k now, but I can knock that out by Christmas. I have also gotten rid of cable and switched to high speed internet, Netflix, Amazon, Hulu, and OTA local HD. Saves me about 80 a month and I get a lot more movies.
Im 28, own my house, both trucks, and motorcycle, all free and clear... I have no debt to speak of aside from a student loan, and I do whatever I want when im no working without much worry of the cost.
That doesnt change the fact that until I was 23, I was broke as shit, and had nothing other than my computer, truck, and clothes....
How much money should you have? $2000 emergency fund, and about 6 months living expenses.... Are you likley to be able to achieve that at 18? Highly unlikley without help, unless youve been working union jobs all your working life
I'd go with the Dave Ramsey approach... Build an emergency fund. Start with $1000 (or for an 18 year old, $500), then work your way up to enough to cover 6 months of (barebone) expenses.
You should be working toward 500-1000 in an emergency fund, and be saving a pre-determined amount every month in a savings account. Whatever you can do comfortably.
I graduated from college a couple of years ago, and I remember how hard it was to save money. If you want to build an emergency fund of the 500-1000 dollars then that is good. I have a hard time thinking of something that 1000 dollars isn't going to take care of when you are 18.
But I will give you the same irresponsible advice that my grandfather gave me: Live life. You're 18. Travel. Get drunk ("in a couple of years"). Party. Have fun.
In a perfect world, yes you want to start saving for retirement asap. But I see no issue of instead of a retirement fund you have a travel and beer money fund for a few years.
Now with that being said.... Many will tell you this, and listen to them when they say: stay clear of credit cards man. Trust me there are other ways of building credit. Just don't apply for them. Stay clear.
I have a hard time thinking of something that 1000 dollars isn't going to take care of when you are 18.
There are plenty of car repairs alone that can run more than $1K.
I hear ya there, I just had a engine head repaired a couple months back and it cost a nice sum. But I think 1000 for emergency is good at a young age, plus heck I know plenty of 18 year olds that can buy a car for $1000 bucks if need be to get them around.
But you're right. I maybe am look at this from a little to personal view where locally public transit plays a lot larger role.
Guess it depends on where you live. Even at 18, I wouldn't want to be caught without a car in Texas. I commuted 30 mi. to college, though. If the car goes down around here, you need enough liquidity to get it back up and running again, or you're almost literally up a creek without a paddle.
I don't like mass transit most anywhere ... but I certainly wouldn't want to rely on it out here in God's country. Its shaky, and quite a bit of it seems to be dedicated to transporting crackheads to the liquor store. Some of the suburban lines aren't quite that terrible ... but I still wouldn't've wanted to deal with it, even at 18.
I'd probably keep a couple of grand in savings if I could, even at his age. But, I guess it does depend on how much you rely on your car.