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Old 02-11-2010, 10:35 PM
 
1,714 posts, read 2,296,112 times
Reputation: 816
Quote:
Originally Posted by bicoastal10 View Post
OP, the amount of money you have at age 23 doesn't matter at all. At this point, you should be more focused on actually gaining education/work experience/skills. Many of your peers are still in college, just starting their first full time job, or are currently attending graduate school, law/med school, etc. and aren't even generating an income yet. Being concerned about your financial situation should take effect around the age of 30 (when all of your peers are actually out in the workforce), not 23; you're just a kid.

In fact, you should focus more on working towards having a certain amount in net worth by retirement (which is likely 40 years from now for you).
Actually, he does need very much to focus on his financial situation. Those people you mention who graduated or going to grad school are the ones that are having to look for jobs while carrying up to $100k in student loan debt.

The degree especially in today's economy doesn't mean that a high-paying job is guaranteed. There are tons of people with masters/doctorate/JD's out of work right now.

To suggest the OP not worry about his financial situtation until he's 30 is not smart advice. Most people get married before that time, have kids, change jobs several times which means they get into debt. He would be very wise to pick up a copy of Dave Ramsey's The Total Money Makeover, then follow along the baby steps. He can continue his education at a local community college or trade school that he pays for in cash. That way he starts to learn how to budget and not fall into the trap of debt.

To the OP: Start with $1,000. You can more than likely listen to Dave Ramsey on a local AM station or Sirius/XM or Internet/Podcast.
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Old 02-12-2010, 02:22 AM
 
Location: Sandpoint, Idaho
1,816 posts, read 2,817,337 times
Reputation: 1538
Quote:
Originally Posted by Colddiamond102 View Post
I see all the time on this forum where people have this saved up in this account, and that saved up in another.

So Im going to see where I stand on this, given the indulgence of other CD'ers.

Im 23 years old, in college, working part-time as a cashier. Hours vary week-to-week depending on the "whim" of the manager. I can have anywhere from 12 hours in a week to 39 *This one doesnt happen often at all..makes me sad..and broke.*

I make 7.80 an hour, own about $600 worth of stock (outright...not counting what they've given me because I dont know) in my company, and have a 401k with about $2,000 in it (It was a bit more a couple years ago...stupid economy/stock market...)

Is this bad for someone my age? Or is it normal? Any ideas on how to make it better?
Im quite curious after reading other threads.

Any input appreciated.

P.S
I just noticed I got the title flubbed up...its supposed to say "How much" :-S
Hi Diamond,
Note that "savings" is a flow variable. This means, it is a variable that measures earnings less consumption expenditures each period.

What you are actually asking is about financial wealth, a stock variable. You are 23 claiming $2600 in financial wealth. I am assuming you have zero debt. If that assumption holds, you are well above the mean, given the mean 23-year old today is likely to have negative wealth on account of outstanding loans.

What you need to do going forward is to get that degree and start earning a lot more than $7.80/hour. As you do so, do not go hog wild on expenses/toys/treats or you will be running to stand still.

Set a goal of saving $X per year on average before 30. And be sure to invest wisely. By age 30, set your financial wealth target at something a bit toward the ambitious side and strive toward that goal. A decent starting point is a savings target of $10K/year (note that clearly in the next two years, this won;t happen, but afterwards, sure.

With decent investing your net worth should hit $100K by age 30. I see $100k as a reasonable goal.

Good luck,
S.
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Old 02-12-2010, 02:23 PM
 
2,149 posts, read 2,966,592 times
Reputation: 3003
Quote:
Originally Posted by Golfinnova View Post
To suggest the OP not worry about his financial situtation until he's 30 is not smart advice.
Agree completely.

Quote:
He would be very wise to pick up a copy of Dave Ramsey's The Total Money Makeover, then follow along the baby steps. ...
To the OP: Start with $1,000. You can more than likely listen to Dave Ramsey on a local AM station or Sirius/XM or Internet/Podcast.
<sigh> Dave Ramsey is not the answer to everyone's problems. This guy doesn't need a money makeover; he needs a money make. He's 23 and in okay financial shape for where he is in life -- no debt, a little invested, living within his means. OP, start learning all you can about personal finance. Go to the library and get a book on basic finance and investing. I often recommend the Dummies book as a great starting point. You don't have to become one of the zombie-like Ramseyites to take care of your finances.

You sound like a typical young person, trying to figure out what to do with your life. Good luck -- hope that in the long run you get to do something you find satisfying and lets you live comfortably.
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Old 02-12-2010, 03:17 PM
 
1,714 posts, read 2,296,112 times
Reputation: 816
Quote:
Originally Posted by skaternum View Post
Agree completely.


<sigh> Dave Ramsey is not the answer to everyone's problems. This guy doesn't need a money makeover; he needs a money make. He's 23 and in okay financial shape for where he is in life -- no debt, a little invested, living within his means. OP, start learning all you can about personal finance. Go to the library and get a book on basic finance and investing. I often recommend the Dummies book as a great starting point. You don't have to become one of the zombie-like Ramseyites to take care of your finances.

You sound like a typical young person, trying to figure out what to do with your life. Good luck -- hope that in the long run you get to do something you find satisfying and lets you live comfortably.
I agree completely that he doesn't need a makeover. I used DR as a reference, but he could use Suze Orman or Ric Edelman as well The only thing I caution about is that there are tons of books out there that are written on how to be rich in 60 days, make $100k easily, etc. As I stated in last post, as long as he learns about budgeting, investing, life insurance, wills/trusts, etc. It will only help him and now is the time to learn it.
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Old 02-12-2010, 03:40 PM
 
16,623 posts, read 12,916,104 times
Reputation: 11399
Quote:
Originally Posted by Colddiamond102 View Post
I see all the time on this forum where people have this saved up in this account, and that saved up in another.

So Im going to see where I stand on this, given the indulgence of other CD'ers.

Im 23 years old, in college, working part-time as a cashier. Hours vary week-to-week depending on the "whim" of the manager. I can have anywhere from 12 hours in a week to 39 *This one doesnt happen often at all..makes me sad..and broke.*

I make 7.80 an hour, own about $600 worth of stock (outright...not counting what they've given me because I dont know) in my company, and have a 401k with about $2,000 in it (It was a bit more a couple years ago...stupid economy/stock market...)

Is this bad for someone my age? Or is it normal? Any ideas on how to make it better?
Im quite curious after reading other threads.

Any input appreciated.

P.S
I just noticed I got the title flubbed up...its supposed to say "How much" :-S

I think you are doing fine. when I was a 22-year old South Carolinian, my savings were a trash bag full of $1 bills that I threw in the trunk of my car to take with me to a job in North Carolina. Waved goodbye at South of the Border, and headed north for food and work.

you ask how to do better. saving money at a "temporary job" like a part-time student cashier, is more an exercise of good habits (and a small financial cushion) than it is a genuine way of attaining financial security. I'm surprised you've saved as much as you have. I suppose I could recommend you do what I did, and relentlessly pursue a higher salary/better job/better skillset, live cheap, live within your means with no debt, keep a $1k cash cushion or so if possible, get a credit card and use it once a month, and don't worry about 401k's and stock (yet).

everybody is different, though. For me I was able to kick some ass in the first few years, prove myself, and secure a solid gig before the economy blew up and everything went to hell in a handbasket. These days it might be wise to play it more conservatively, keep saving and don't take your current job for granted.

Last edited by le roi; 02-12-2010 at 04:00 PM..
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Old 02-12-2010, 04:32 PM
 
1,714 posts, read 2,296,112 times
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"live within your means with no debt, keep a $1k cash cushion or so if possible, get a credit card and use it once a month, and don't worry about 401k's and stock (yet). "

Good advice except the credit card part, that's part of the debt trap. He needs to stay FAR away from the credit cards and use a debit card instead.
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Old 02-12-2010, 04:53 PM
 
Location: Right where I want to be.
4,508 posts, read 5,103,177 times
Reputation: 3241
OP, you don't say anything about having some savings that you can get to quickly....do you have a savings account in the bank?

You also didn't list your expenses. If you are living at home they might be quite low.

Either way you need some money that you can get to quickly for things that come up in life, emergencies. If you have a car that would mean money set aside for maintenance, a flat tire, etc.

A general rule is to keep 3-6 months worth of easily accessible savings....if you are in school, low income and expenses, living at home etc, you can get away with having less.
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Old 02-12-2010, 05:27 PM
 
6,090 posts, read 9,281,722 times
Reputation: 3786
Quote:
Originally Posted by Golfinnova View Post
"live within your means with no debt, keep a $1k cash cushion or so if possible, get a credit card and use it once a month, and don't worry about 401k's and stock (yet). "

Good advice except the credit card part, that's part of the debt trap. He needs to stay FAR away from the credit cards and use a debit card instead.
Having a credit card at a young age will help build credit, as long as its used responsibly there's no issue IMO.
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Old 02-12-2010, 07:27 PM
 
1,714 posts, read 2,296,112 times
Reputation: 816
Quote:
Originally Posted by wheelsup View Post
Having a credit card at a young age will help build credit, as long as its used responsibly there's no issue IMO.
While that sounds good, the problem is that most people don't use them responsibly. Not to say that the OP isn't responsible; however, he can do his purchases using a debit card and then save up for major purchases like cars and houses without credit.

We as a society are too dependent on credit which is a big part why we are in such dire circumstances financially, if we change our thought process and budget and actually save for major ticket purchases, we would be much better off.
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Old 02-12-2010, 07:39 PM
 
1,714 posts, read 2,296,112 times
Reputation: 816
Quote:
Originally Posted by wheelsup View Post
Typically you find people that have a lot of CC debt charge it back up once it's paid off. And end up with twice the debt.
Here is a perfect example of why you stay away from credit cards, this happens to many people out in the country whereas there is only a very small percentage of people who have a zero balance on credit cards.

Not only that but in this example, the OP knew a person who had $5,000 on a credit card at 20% APR and wanted to use a student loan at a single digit APR to pay off the debt. Credit card companies are jacking up their rates, so the best way to combat this is not to have one in the first place.
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