Just Turned 18

[tgavin71]

If you major in criminal justice what jobs can you apply for? Does that mean you will be a lawyer? If you are keen to work in the criminal justice field maybe joining the police force could be an option. Not sure how it works in the US but here in Australia but you can get your university degree paid for by the government. My cousin's husband joined the police after school he worked hard and when the opportunity to go to university for free he grabbed it with both hands. He graduated last year with a Bachelor Of Social Work. Using this method meant that he was earning an income from the start.

[LuxLiving]

Hi Future! You're about the same age as two of my sons and I've been helping them with some of the same questions you are having.

You can take some of your money out of your Roth IRA early - I believe they call it something like withdrawals in even incremental amounts. IOW, once you begin to make withdrawals you can take 5000.00 a month out regularly, but not 3000.00 one month and then 2000.00 the next, etc. Someone check me if I'm wrong here.

Also, listen to Ima - she is the voice of experience here.

Between now and next paycheck start tracking your expenses by making a log book.

First thing next paycheck sit down with it before you spend a dime and on a piece of paper put the income in the plus side and then start subtracting everything you'll need to spend till the next payperiod. This is called your spending plan or budget.

My boys' spending plans look something like this:

Income +300.00
Tithe - 10% -30.00 270.00
LT Savings 10% -30.00 240.00
ST Savings 5% -15.00 225.00
Car Insurance -75.00 150.00
Gasoline -75.00 75.00
E-Fund -25.00 50.00
Clothes -2.50 47.50
Health CoPay -5.00 42.50
Allowance/Spend -20.00 22.50
Kitty (ckbkbuffer) -1.50 21.00
Misc. -3.00 18.00
Car Tag -2.00 16.00
Car Repair -6.00 10.00
Car Replacement -8.50 1.50
Electronic Equip -1.50 .00

Hope the columns hold out up there. But basically they make a zero based budget, meaning they pre-plan for each purchase/need. LT Savings = Long Term Savings = Retirement, ST = Short Term Savings = Medium length goals such as a new guitar or drumset for my kids or a new bathroom window for me on my budget.

Some good websites to visit are the Mevelopes site, Jesse's YouNeedABudget.com and one called budgetmap. Each of these are some tools that would help you execute your plans. You may not need to invest in each of their products, YET - but each site will help educate you in how to map your quest.

INGdirect.com will allow you to open a Roth IRA at age 18 with as little as 250.00. You'll have to start there with just a single mutual fund inside of it, but with your future contributions out of your Long Term Savings you'll be able to get 'diversified' (eggs in more than one basket) over time.

First get thee hence to a bank w/some cash. Get the student checking at a bank which should be FREE as in no monthly service charge. You might have to pay for your own checks. There are places to get them cheaper than from your own bank usually.

Then once you have the checking you can link it to INGdirect and then make monthly contributions to 1)your emergency fund/savings account and 2)your Roth IRA online - even automate it if you wish. Then once you have a goodly amount built up in there you can look around at some of the other brokerage accounts and do what is called a rollover.

Starting you could make your LT savings go towards a Roth IRA maybe at 30.00 and ST savings of 25.00 towards the emergency fund. Or something of that nature. Be prepared to make adjustments. It's okay.

These folks will truly try to help you so stay tuned here!

Another good book to read is: Cashing in on the American Dream: How to Retire at 35 by Terhorst, Paul.

All the best to you!!
~~~~~~~~~~~~~
LuxLivingFrugalis

[CheaplyClever]

I retired at 40. Good luck to you, this is a very good start and all of this advice is super. Let me add one comment and two suggestions.

Comment- The Roth IRA is your "Old Man/ Old Lady Money" don't even count it right now because it is not availble until (I like to think) 60.

Suggestion One- Consider a government job. You can't beat the benefits. They have plenty of entry level position, for example, Correctional Officer. Get your foot in the door.

Suggestion Two- When I got my "Real World" job I listened to my Mom's advice. Establish a budget and be resonable because it will be with you a really long time. When I was starting out I brought home $320 every two weeks so I made that my budget. Every raise I got went in the bank. It didn't take long to start investing. I did Roth's, and savings bonds, maxed out my 401K, did the company stock thingy, and still paid cash for my very first brand new car. I later went the financial advisor route. When I finally did retire, I was still "paying" myself $320 every two weeks.

This wasn't over-night, it took me 25 years and it didn't hurt that I married someone as frugal as I.

[creditcardfree]

You can take some of your money out of your Roth IRA early - I believe they call it something like withdrawals in even incremental amounts. IOW, once you begin to make withdrawals you can take 5000.00 a month out regularly, but not 3000.00 one month and then 2000.00 the next, etc. Someone check me if I'm wrong here Lux Living

I think one might need to check on that applying to the Roths.

With a Traditional IRA, there's rule in the tax code called a 72t that allows you to begin making withdrawals prior to 59 1/2, in substantially equal amounts. These amounts need to continue for 5 years or until 59 1/2, whichever is longer.

So in the case of Future, who may retire at 45, he would need to make substantially equal withdrawals (same amount every month or same amount every year) for 14 1/2 years. After that time any amount could be withdrawn. The amount is determined at the beginning of the withdrawal period. There is a formula for determining how much the amount could be, that I think is base on life expectancy tables.

I worked in customer service at a mutual fund company over 6 years ago, so I just am not clear on this rule applying to the Roth IRA's. It's possible it does. Roth's were still pretty new then...still are.

Again, the principal (the amount contributed) can be withdrawn after it has been in the account for at least five years with out penalty or taxes. At age 45 most of the principal would be available for withdrawal.

There are other forms of investments that might provide cash flow before the official retirement age. How about owning an investment property...or more than one...if you own the home free and clear, most of the rent the tenant pays would be cash in your pocket each month....then you wouldn't need to pull out of your other retirement vehicles.

Future, remember this can all be a bit overwhelming and it doesn't all happen overnight or need to be started right away. Keep learning. I'm sure you'll here more.

[Future]

Yes, I will be living at home for the next two years, and my parents have only asked me to help them with the groceries when I can.. So bills shouldn't be an issue beyond car insurance, and soon to be a cell phone..

Yes, I have intentions of joining local police, and hopefully moving up to state police, but considering my physical capabilities, I really want a get something more intense within law enforcement..

But that's not for a few years yet..

This advice is going great so far.. This is my to do list..

1. Get full-time job (Preferrably one with tuition asst, but its unlikly)
2. Get checking acct
3. Have checks directly deposited
4. Save 3k
5. Start Roth IRA (10-20% of weekly income sound good?)
6. Apply for federal Aid for college (Meanwhile continue saving for tuition)
(By this time it should be nearing January-feb. I will be starting college in the spring)

Repeat for the next 4 years.

[Ima saver]

Sounds like you are very much on track!! Lux, that was a good budget for your son, I liked it!

[creditcardfree]

Looks very good. Save 10-20% towards roth weekly is fine...just don't go over the $4000 limit. The limits do change (upwards) as well, so be aware of that.

[LuxLiving]

Future is looking good!

You will have the 3000 saved by when? It's always good to give yourself a date when goal setting.

What is this 3000 earmarked for? This is going to be your emergency fund?

Look to future car repairs...they'll likely be coming!

You have set yourself some fine goals and I am so proud of you!!!

Giant Mom Hugs,


~~~~~~~~~~~~~
LuxLivingFrugalis
http://luxliving.savingadvice.com

[Future]

Well, hopefully I will ahve the 3k saved up and more by January-feb and it was for the Roth IRA/Retirement fund.. But if I can start the account cheaper that would be nice, but I want to put as much in as possible each year from now and until I take it out (27 years from now)..

Well, the point is I have learned so far that getting rich is wicked easy, getting rich NOW is extremly hard..

Which brings me to a dillema (Sp?), I want to enjoy life, how can I enjoy life if I am constantly worrying about saving my money, and what not, it seems alot more stressful, sure itll pay off in the end, but that's 27 years of my life gone, because of money.. What gives??

I am going to do this regardless, because I have every intention of being rich, super-wealthy, and passing it around my family.. Maybe they don't have the ambition, but I do, and I plan on taking them to the top with me. My family has spent generations in poverty, and I plan to get them out. The next generation, will be living in leisure, that is the meaning I have now given my life.

[JBinKC]

I agree starting out early and becoming financially cognizant will be important to reach your goals. Definitely, have some basic knowledge of accounting, finance and taxes.

I wouldn't go that far to saying getting rich is easy you have tons of obstacles everyday and it seems there are new ones popping up all the time. I think the biggest future obstacle people ignore will be acquiring money at a faster rate than the rate of the depreciating dollar.

I think at your age I would first find something you excel at and milk it for all its worth. If you can find that early in life your chances go up significantly.

Good Luck.

[LuxLiving]

Hi Future -

only got a sec as it's time to pop off to church but...

On your dilema - I have a piece of paper in my wallet right along with the cash when I have it. I made it myself.

It has a picture of funny money on it and it says above and below it:


"Choose What You Want MOST Over What You Want NOW!!!"

http://luxliving.savingadvice.com/2006/08/


Words to live by for someone who wants to be wealthy. There are ways to still have fun and put money aside for investments. I'd say go for the 'big bang' effect on the fun times but Far Fewer of them - make the fun things you do really POP and then you'll have more $$'s for investing.

For what's it worth - but hey, it's FREE advice!

~~~~~~~~~~~~~
LuxLivingFrugalis
http://luxliving.savingadvice.com