Saving Money Help!!!!!!!!!1?
I work for the state of NC at a elementary school, which means I don't make any real money, in the maintance department. I don't make good money, but I don't have a lot of bills either. I have about 650.00 worth of bills per month. I make about 25000 dollars a year. Since I work for the state we have a great 401k plan and great benefits. What is a good amount for me to save each month. I only get paid once a month, which may be a good thing considering I get paid at the end of the month, meaning I have one lump sum at the end of the month. What should I put in savings every month that is actually possible to do I'm only 20 years old. Help Please. LOL I don't have any other debts like credit cards or student loans or anything. I just owe a truck payment of 250.00 per month Truck insurance 150.00 per month Cell Phone 100.00 per month Ymca 50.00 per month 100.00 Internet/Cable per month.
Public Comments
- College sound good to me. You can get a scholarship and go to school. NEVER EVER TAKE A LOAN EVEEEEERRRRR. IT LIKE OWING THE DEVIL YOUR SOUL.
- Yey, no debt! This is best thing you can do for yourself, is to avoid debt, especially on credit cards. The other good news is that your expenses are low - sounds like you're living with your folks, since you didn't mention rent or food expenses. First thing, put at least 15% of your paycheck into your 401k. I know it sounds like a lot, but trust me, you won't miss it if it's gone before you even see it, and it's the best insurance for your future that you can possibly have. If you can afford it, save the maximum allowable for your tax bracket - I think up to $15,000 a year. Take another 5-10% of your paycheck and start an emergency fund in a money market mutual fund (Fidelity or Vanguard are good choices). Save up at least 6 months of monthly expenses in here. Once your emergency fund is full, redirect that same percentage to another savings account for short-term goals, like a car, travel, a home/apartment of your own, etc. Avoid getting a credit card if you can help it; if you do get one, swear on your mother's life to always pay off the full amount every month. Create a detailed budget for yourself, and don't go over that budget; you can adjust it as necessary each month, but never spend more than you earn. Some good, easy reads: -The Complete Idiot's Guide to Personal Finance in your 20s and 30s -The Complete Idiot's Guide to Managing Your Money -“Smart Women Finish Rich” or “The Automatic Millionaire”, by David Bach -any Suze Orman books
- Is that $25,000 take home, or $25,000 pretax? If it's 25,000 take home, your ongoing payments represent 1/3 of your takehome pay per month. That leaves ~$1300/month. We still haven't figured out other stuff. Do you live at home or do you rent? How much do you spend on gas for that truck, for heating and lighting, for food (groceries and eating out)? So you have a great 401(k) program. Hopefully you contribute to that as much as you can. Great programs aren't much good if you don't participate. Whatever's left is what you have left for savings, and that's as much as you can save, honestly. If you don't have too many other things tugging at your wallet, you'll be able to save much.
- These are great questions to ask while you are still young! The earlier you start saving, the easier you will be able to achieve retirement security. A good rule of thumb is to put away about 20% of your gross salary (before deductions) toward retirement. If you employer matches your contributions, count them as part of that 20%. Exclude Social Security from these figures. For example, if you put in $2,500 into your IRA (10% or your gross salary) and your employer matches 1 for 1 with another $2,500, that makes 20%. You would be on track. That amounts to just over $200 per month. If you don't have a pension aside from your IRA, you will need roughly 20 times your annual living expenses in a retirement fund to last through your golden years.
