What's your monthly disposable income? (credit report, loans, utilities)

[MotleyCrew]

Being self employed, we have enough and when we do, we are very grateful

[poolgirl51]

Originally Posted by SOON2BNSURPRISE

Guess it depends on your lifestyle, but a good rule of thumb is to have a 3 month supply of money stashed away, preferably in the bank. You should also have $500 to $1000 in cash stored in your home for emergencies locked up in a safe place. Preferably in bills that can be spent easily, meaning that many places won't take a $100 bill. In your car you should keep $100 hidden and if you let someone detail your car remember to pull the cash just in case.

The optimum thing to do is to have a years expenses saved up in the bank. Chances are it will take time to build that safety net up for yourself. I can tell you this that if you spend the next few years doing that you will live a stress free lifestyle in the end.

While you are doing that max out your 401K or at least pay the amount that gives you all of the employer percentage. For example where I work the employer gives us 2% of our pay, then a half of percent for every percent that we pay up to 6%. What that means is that if someone puts 6% of there money in they have 11% actually going into the retirement account. If you were to place your raises into the account it wouldn't take but a few years to be saving 20% of your income for retirement. If your employer doesn't offer a 401K or a 403B then get am IRA max that out and then get a Roth Ira and max that out.

Some people say that they can't afford to do what I have suggested. Chances are they also wont be able to afford to retire when they want to. Maybe they will choose to live on the poverty level income that Social Security provides if it is ever there in 30 years.

Very good advise here. The rule is to pay yourself first (i.e. save) and if you use credit cards pay them off every month. While this can be hard to do if you start slow it builds. Keep track of what you spend and you will be surprised to find out how much stuff you buy and do that you don't really need.

[artvandelay]

Before the kids came along, when my wife was still working, we managed to save over 20% of our income in various accounts; 401K, Roth, MM, mutual fund. The MM money was intended to be our safety net. But after she stopped working, we could only put a small amount into the MM, stopped contributing to the Roth, etc. Now I have to consider all my other accounts (except 401K) as our safety net too. It's not like we struggle, but it's stressful having a smaller cushion than before, because who knows what crisis is around the corner.

[MotleyCrew]

Kids. Those were our "poverty years." If you are thinking about saving for retirement now Art, you will be fine. Some people do not even think about it until they are right there. Best of luck to you.

[alterego]

It's easy to save when you don't have kids. I hear they are expensive.

[wsugrad03]

Budgeting takes a lot of discipline. Find a ratio that makes sense for your needs. I wanna retire early, so I put a lot into investing. I also have a separate savings account that gets funded electronically. Like others have said, you need to pay yourself first and spend the rest. If you can't manage to maintain your ratio of spending/saving then you've overextended yourself and are probably living unreasonably for your income levels. Don't know what you spend your money on? Save your receipts for a month and figure it out. You'll be surprised.

[TurcoLoco]

Originally Posted by wsugrad03

Budgeting takes a lot of discipline. Find a ratio that makes sense for your needs. I wanna retire early, so I put a lot into investing. I also have a separate savings account that gets funded electronically. Like others have said, you need to pay yourself first and spend the rest. If you can't manage to maintain your ratio of spending/saving then you've overextended yourself and are probably living unreasonably for your income levels. Don't know what you spend your money on? Save your receipts for a month and figure it out. You'll be surprised.

Do crack dealers give out receipts?


hehe...just kidding!

As far as the credit card advise given earlier, it is great not to use them or even need them but to build credit (again if that is a necessity for the person in question) then you should carry over a little amount each month and pay the minimal interest because when you pay off your CC bill the same month and nothing carries over, it is transparent to the credit bureaus. I know it sucks but to build credit in a fast way, you have to wait and also pay a little interest here and there. The whole credit score evaluation was assessed by a computer analyzing 33-34 risk factors. They are all bad, so the computer would pick the applicable ones and deduct the corresponding points from the maximum FICO which was 900 to my best collection and lowest being in the low 300s (if yours is less than 500, shoot yourself in the head).

Anyhow, I usually do a decent job of saving if I can at least, but I had some big, ciritical expenses the last few months but otherwise I would have at least couple of months of my salary in the checking account. Since Krispy Kreme's went BK and closed its stores, I can finally start saving again...lol.

[amatrine]

After bills I am behind. Its a juggle . We are a one income family of three, due to my illness, but I can not claim Disability due to not enough work credits. I am 60k in medical debt.
With the price of gas for my husband to get to work, I cant even buy my medicine.
Have two bad teeth I can not afford to work on.

So no extra here. We were just making it before food and gas went up.
Would sure help if we could refinance our car that is 23 percent interest rate due to my medical collections, but cant. Cant drop it either. Need the car.

Ama

[sierraAZ]

Originally Posted by TurcoLoco

you should carry over a little amount each month and pay the minimal interest because when you pay off your CC bill the same month and nothing carries over, it is transparent to the credit bureaus. I know it sucks but to build credit in a fast way, you have to wait and also pay a little interest here and there.

Not true. Never carried a balance, ever, and yet have snow-white scores, even at the time when I didn't have a mortgage or installment loans.

[frogandtoad]

Originally Posted by TurcoLoco

you should carry over a little amount each month and pay the minimal interest because when you pay off your CC bill the same month and nothing carries over, it is transparent to the credit bureaus.

Totally not true!! I have paid every credit card bill I've ever had in full each month and my credit is stellar. What is transparent to the credit bureaus? That you know how to spend within your means??