Best way to save money with low income

[pdizz1e]

Hi all,

I am a graduate student still paying tuition but also have a co-op position that pays well enough for me to have a bit of spare cash if I live at home and live frugally. I would love to start saving something like 10% depending on my expenses that month.

Since 10% of what I make is not a huge number, what would be the best way to invest this money? I have a savings account but I believe the interest on that is somewhere around .5% which is essentially nothing.

[disneysteve]

Welcome to the site.

Do you have any debt?

If not, do you have an emergency fund to cover expenses for 3-6 months if your income were to be interrupted?

I'd focus on those things first. Once they are taken care of, you need to think about what it is you are saving for because that will help guide how to invest. Are you saving to move out into your own apartment? In that case, you'll need a security deposit and first and last month's rent probably. Keep that money in your savings account? Do you own a car? Any need to replace it within the next 3-5 years? If so, keep that money in the savings account.

Are you saving for retirement? If not, you should start there if the other stuff is taken care of. If there is no employer plan in the picture, open a Roth IRA and start contributing to that.

[pdizz1e]

thanks for the reply.

I do have student loan debt so I hadn't even thought about that but I should start paying that off. I do own a car but its got 140k+ miles on it and would love to replace it whenever I can afford to do so. Even though I work close to full time at the job, it is still technically part time and therefore don't get any retirement/benefits.

It looks like the best option is for me to invest what money I can into my savings account so I can easily withdraw for security deposit, car payments, etc.

Does anyone know what bank has the highest interest rates?

[disneysteve]

Originally Posted by pdizz1e

I do own a car but its got 140k+ miles on it and would love to replace it whenever I can afford to do so.

I'd definitely be saving for the next car - something used and modest and cheap but better than what you've got. And pay cash when you do.

[Slug]

If your student loan interest is currently being deferred, I wouldn't bother with those right now.

I would be saving though in hopes of knocking out a chunk of them once they come out of deferral. You're right to stick to simple savings vehicles for the time being. Short-term CD's is about as dangerous I would go.

You might want to look into a Roth IRA. You can put money there and remove the contribution without penalty in some cases. However, for the large part, I recommend you stay as liquid as possible.

[bjl584]

When I first got out of college and was in a transition phase career wise, I boosted my savings by boosting my income. For a year and a half I worked two jobs so that I could save and pay down some debt while I searched for a higher paying career using my degree.