My update

[orangina]

It's been a while since I posted on here but I thought I would update my financial situation.

I gave up my apartment at the end of January and was able to stay with a friend in between house sitting jobs until May.
Now I live with another friend and her sister - I pay $240 for rent and I stay there when I need too. It has been working out quite well.

So here is the new breakdown of my budget:

Rent - $240
Car - $266
Insurance - $108
tithe - $320
Cell phone - $55
Groceries - $ 160
Gas - $120
Parking - $70

My salary is $42,198 before taxes.
I also make extra income from my pet and house sitting.

I have quite a large chunk of money leftover and I am not sure what I should do with it........
I may want to go back to school oneday or buy a house.........

[humandraydel]

Originally Posted by orangina

I have quite a large chunk of money leftover and I am not sure what I should do with it........
I may want to go back to school oneday or buy a house.........

Save for the sake of saving! Remember - you can always spend money later....but you can never get it back after you've spent it!

[disneysteve]

What does your current savings picture look like? Do you have a company-sponsored retirement plan and, if so, to what extent are you participating? Are you funding a Roth? Do you have an adequate EF?

[orangina]

I do have a a company sponsored retirement plan (I think)

Not sure what the contribution is...............

I have no Emergecny funds and I live in Canada so we don't do Roth's I believe.

I am 28.........and I don't want to do anything silly with my money.

[orangina]

so is anybody have anything else to say?

How much a month should I put away into investment?
Savings?

[disneysteve]

Originally Posted by orangina

How much a month should I put away into investment?
Savings?

Ideally, you should be saving at least 10% of gross for retirement, preferably through a tax-advantaged plan like a 401K, 403B or Roth.

In addition, you should be saving to build and maintain an emergency fund equal to 3-6 months of living expenses.

Any other savings will generally be goal-oriented like a vacation fund, a new car fund, etc.

[orangina]

so should I have seperate accounts for my e fund and general savings?

[anonymous_saver]

First off, find out about your retirement plan that your employer offers!!! Put up to the match to start with.

What is your interest rate on your car loan, and how much longer do you have to pay? I would put extra money towards paying this off ASAP.

Get an high interest online savings account like Emigrant Direct or HSBC. You can create subaccounts there for various savings (emergency fund, down payment, etc.).


This is what I would do:

(1) Save one months worth of an emergency fund.
(2) Pay agressively to get car paid for.
(3) Save 3 months of an emergency fund.
(4) Save for down payment of house.
(5) Once you buy a home, I would then focus on raising that emergency fund to 6-8 months worth.

*During steps 4 and especially 5, I think it would probably be a good idea of at least starting a Roth IRA.

*I would also personally never donate so much of my income towards tithing. I would at least think about lowering that amount until you pay off your car, have a solid emergency fund, and have a house.

[disneysteve]

Originally Posted by orangina

so should I have seperate accounts for my e fund and general savings?

I think this totally depends on how disciplined you are. If you know that you need to maintain a certain balance in the account for emergencies and won't be tempted to spend that portion of the money on other things, one account is fine.

If, however, self-control isn't your best feature, some people prefer to make the EF a separate account that isn't as easily accessed.

[orangina]

My interest rate is 8% and I have until 2010 I think to pay it off.

So even if it takes me 10 years to get to that point?

I have so so discipline with regards to money.

I'm 28 now almost 29.........

Why does this feel scary?

[buzz]

Originally Posted by orangina

My interest rate is 8% and I have until 2010 I think to pay it off.

So even if it takes me 10 years to get to that point?

I have so so discipline with regards to money.

I'm 28 now almost 29.........

Why does this feel scary?

The big reason for the scary feeling is the lack of an emergency fund. Just make a commitment to save some money every time you get paid. At your age $100/week would be better than most of your peers, $200/week would be supreme.

Keep your debt under control. Once you have a substantial savings base, your fears will be largely a thing of the past. It's nice to have a detailed plan all laid out, but at 28, just developing a resolve to build for the future is a crucial step. That is the disciplline you need. When I was that age, I squandered everything, and I'm paying for it now.

[orangina]

so then should I start with my e fund first then?

[myself]

Originally Posted by orangina

so then should I start with my e fund first then?

I don't know how much you pay in taxes, but I'm hoping it's less than $2,177/month.
If it is, take the money you can to build up an savings account to 1 months worth of bills ($1,339 according to what you posted).
Then start funding your tax deferred account at work as much as you can until you meet the company match.


To offset your current expenses, you merely have to save up $318,178 (if you're only earning 5.05%, which anyone can get at EmigrantDirect.com).
If however you get an average of 8.4% (I've heard this as an average for the US stock market since it started from a Scott Burns' article), you only need to save up $200,850.
Now, if you can get 20.4%, you'd only have to save up $78,764 in order to live off the interest. I only use that number, because that's how much I just made off of the sale of my Apple Computer (AAPL) stock a couple of days ago.

[orangina]

I'm confused.

I live in Canada and know nothing about investing into the stock market.

[orangina]

I think that what I contribute at work is like a pension thing.