Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I won't get too deep into it, but I wanted to save $500/mo but that's 25% of my gross monthly salary and it just doesn't seem to work. I am trying to pay off credit card and school loan debts, so I just don't have hte room to save that much. Though I would love to.
So I'm considering saving $200/mo, but now I think that's not enough. If I started saving that much since I started working in April, I'd close to $2000 by now. So I must admit I am playing catch up.
So yes, I'm asking. Is $200/mo too little? What's the minimum amount I should be saving?
It's looks like you have a concept of a budget and what you can afford. Which IMHO, is above many in your age group. I'd say, keep doing what you are doing. ANY amount you can commit to saving on a regular basis is a very good thing! Small regular contributions will add up over time.
First its great you are trying to cut debt and save. There are different methods that people recommend. Some say pay off your higher interest debt first before saving at all. Some say save 10% of your income after tax. Some say saving cash is not wise and to invest it so your money can make money.
It all depends on your comfort level and goals. It is wise to save for 6 months salary in case of job loss (though it seems to take many people longer than that to find a job).
Its never too late to start so great job.
My opinion, if you are 22-25, put that $200 in the market. The extra years compounding over time will give you a significant advantage over one that starts at 30.
It's looks like you have a concept of a budget and what you can afford. Which IMHO, is above many in your age group. I'd say, keep doing what you are doing. ANY amount you can commit to saving on a regular basis is a very good thing! Small regular contributions will add up over time.
Yeah, I agree, I just feel bad that I just started saving now.
I just don't want to put away so much that I end up broke throughout the month and then I need to use my savings or credit.
I just want to know what's a good amount. Like a figure or something.
I would say that with $200 per month you are off to a good start. The question you should be asking is "Is $200/month better than nothing?" Absolutely it is better than nothing, and as was already pointed out, you can take advantage of compound interest from starting now rather than waiting till you can set aside that goal of $500/month. Keep up the great work!
So you make $2000 according to your post. You should save 10 - 15% of your salary. (i.e. $200 - 300 / mo) for retirement and put it in a ROTH IRA or 401K (if your employer has a match)
Some say 10% right off the top. My dad always said pay yourself first. If you have it transfered to a savings account when the deposit is made you never see it. It doesn't matter what percentage someone suggests, if you can't commit on a regular basis. Make a budget by documenting your income and expenses. That will tell you what you can afford to save.
Also, I've heard the suggestion that anytime you get "extra money" = gift, bonus, tax return, rebate. Put that directly into savings.
If you have outstanding credit card balances, at fairly high % APRs, I wouldn't save a dime and put all your money toward paying those off. If an emergency comes up then put it on the card, and pay it off.
Student loans may be slightly different, especially because they tend to have lower rates and longer terms meaning you can stretch them out over 10-15 years.
If you have multiple student loans, pay off the lowest balance first. That will free up the most cash flow, even if it's at a lower % APR.
I wish I thought like you did when I was in my early twenties - I lived paycheck by paycheck and was clubbing every night of the week
you seem very responsible, the $200 is a good start- see how your budget goes and in another 6 months you would have more of an idea what you can reasonably raise it to. I agree you dont want to have to resort to credit or dip into your savings. You are on a wonderful start!
Yeah, I agree, I just feel bad that I just started saving now.
I just don't want to put away so much that I end up broke throughout the month and then I need to use my savings or credit.
I just want to know what's a good amount. Like a figure or something.
For your income of $2,000 GROSS, saving $200 is great! Not many people could save 10% of their gross income on such a small salary. It's never too late to start saving! Make a plan to pay down your debts, and as you pay off each loan, roll that money into your savings so you never have it to spend. (ie, if you have a student loan payment of $85/mo and you pay it off, save $285 the next month).
Someone gave you advice to put the full $200 into the market, but that's a terrible idea! First, make a goal to save 6-12 months of living expenses (ie, what you spend each month on rent, bills, debt payments, transportation, & food). That is your "emergency fund." Don't EVER touch this fund unless your only other option is to use credit (ie, dentist bill, car problems, or other unexpected expenses). Keep this money in a liquid (meaning you can withdrawl anytime) account like a high-interest savings or Money Market Fund.
Next, add up what you spend each year in "irregular" expenses (Christmas & birthday gifts, travel, car maintenance, doctor's co-pays, etc- things that come up but not on a monthly basis). Let's say it's $600 per year. Put $50 aside each month so you'll be able to pay for these things as they come up vs putting something on your credit card.
Only after you have these 2 savings buckets covered should you begin investing in the stock market.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
