IS Saving $5,000 a year a good idea?

[bjl584]

Re: IS Saving $5,000 a year a good idea?

What kind of car are you planning on purchasing? You can get a nice used car for a few thousand that shouldn't effect your savings goals too much, unless you have your eye on something in particular that will cost a lot.

[Savingmonster]

Re: IS Saving $5,000 a year a good idea?

Checking? Maybe this is just me being nit-picky, but I'd recommend sticking your emergency fund in a high yield savings account instead.

I was bad with money too, when I was younger. And spendy... and didn't even have the remotest of interest in saving, budgeting, invest, or whatever. I guess I was a typical guy in that respect. Now, I'm racing as fast as I can to turn things around. Better late than never, eh?

No, I do have my savings in a high yield savings account at Capital One. Thats one of the first thing I signed up for since I got serious about saving.

[Savingmonster]

Re: IS Saving $5,000 a year a good idea?

What kind of car are you planning on purchasing? You can get a nice used car for a few thousand that shouldn't effect your savings goals too much, unless you have your eye on something in particular that will cost a lot.

Something in the 14-18k range. I have my eye on something particular. I can just get a hooptie, but I don't feel I deserve that, I work to hard for that. its not like I want the newest Car at 30,000. I am looking for a car within that range only because I wanted to make payments and still be able to save a good amount.

[Ima saver]

Re: IS Saving $5,000 a year a good idea?

I say you should be saving about 10% of your income each paycheck. It is very smart to start a car fund too.

[Savingmonster]

Re: IS Saving $5,000 a year a good idea?

I say you should be saving about 10% of your income each paycheck. It is very smart to start a car fund too.

I know I can save 15% each paycheck w/o too much effort. Even after the purchase of a car plus payments, insurance, etc.

[creditcardfree]

Re: IS Saving $5,000 a year a good idea?

I'd save the 15% and maybe look to increase it a percentage every year. You are really doing great to be saving 15% at your age and income. Congratulations!!

I wish I had that income and ability save that much at your age... and I'm only 6 years older than you!!

[bjl584]

Re: IS Saving $5,000 a year a good idea?

Well then you are ok. You're still young. I say that cause I too am 28 and don't want to admit that I am getting older. Anyway, if you can save 15% while making a car payment, I think that you are doing good. So, do you have any other savings besides the money that you are saving now? In other words, where are you putting the 5000 that you are saving? Do you have a 401K, a Roth IRA, etc?

[Savingmonster]

Re: IS Saving $5,000 a year a good idea?

Well then you are ok. You're still young. I say that cause I too am 28 and don't want to admit that I am getting older. Anyway, if you can save 15% while making a car payment, I think that you are doing good. So, do you have any other savings besides the money that you are saving now? In other words, where are you putting the 5000 that you are saving? Do you have a 401K, a Roth IRA, etc?

Thanks. Well Actually, I just started the 401k this year. that was one of my goals too.. It's only 3% I'm putting into the 401k, I'll increase next year and as time goes on. The 15% (after taxes) I save every paycheck (every two weeks) is strictly liquid savings (High yield account). I don't want to decrease that.

But I will look into increasing the 401k Contribution w/o sacrificing the High Yield savings. When I have 20k, which I'll have sometime next year, I'll look into more options.

I am like you, I still don't want to admit I am getting older, lol. As I get closer to 30 I learn to accept it and really think ahead.

[Savingmonster]

Re: IS Saving $5,000 a year a good idea?

I'd save the 15% and maybe look to increase it a percentage every year. You are really doing great to be saving 15% at your age and income. Congratulations!!

I wish I had that income and ability save that much at your age... and I'm only 6 years older than you!!

Thanks for the praise, I appreciate it. Talking to you guys really helps. I don't know to many people who care to discuss their financial situation or really care to listen to mine. .

[Savingmonster]

Re: IS Saving $5,000 a year a good idea?

One of my biggest dilemma is, should I increase my 401k contributions and decrease my high yield savings. It would be simpler if I could get a guarantee that I would be alive past 60yrs old .

This is the main reason I am a little hesitate to contributing more to my 401k. I just feel better having the money liquid, I feel safer. In a 401k, I don't feel like the money is mine lol.

[Lonewolf]

Re: IS Saving $5,000 a year a good idea?

I didn't see this mentioned, but does your company offer any 401K match? At a minimum I would up your contribution to make sure you take advantage of that free money. Being a little bit older then you (when did 35 become "old" I would want more in the 401K so that can compound. I think you have a good plan of slowly upping that 401K percentage. For a few years I would up the percent = to my pay raise and then slowly add a percent here and there. With it coming out before you get the net pay, you will be surprised how quickly you can adjust to your "new" income level.

As a side note, I'd have someone who really understands investments look at your 401K investments. This doesn't have to be a high cost financial advisor, as I use a very close friend who is very financially savy work with me to make several adjustments throughout the year. It is amazing seeing people under 30 who have all of their money in Stable Value funds because they are afraid of risk.

Wolf

[LivingAlmostLarge]

Re: IS Saving $5,000 a year a good idea?

I'd put a bit more into retirement and instead how about cutting the trips a little less luxurious to fund that? Then you can keep your 15% savings. I guess it depends on what you need 15% for? House DP? Car payoff? Building EF, i'm a year younger but I too am working on getting more cash on hand in a taxable account. Can never have too much.

[Ima saver]

Re: IS Saving $5,000 a year a good idea?

Then you will be doing great!! It is so good to start when you are young!!

[Savingmonster]

Re: IS Saving $5,000 a year a good idea?

I'd put a bit more into retirement and instead how about cutting the trips a little less luxurious to fund that? Then you can keep your 15% savings. I guess it depends on what you need 15% for? House DP? Car payoff? Building EF, i'm a year younger but I too am working on getting more cash on hand in a taxable account. Can never have too much.

Well my goal is really simple:

Get the CAR & Make Payments, Car Insurance, etc.
Take Trips and Vacations
Pay my RENT, utilities, Food, etc

AND STILL SAVE 15% EVERY WEEK!

Before thinking about the Car I was saving about 30% every paycheck in an 8th month Span.

I was still comfortable saving 30%, moving down to 15% will feel really strange.

When I want to go to Disney and other trips, I'll just work a couple of hrs overtime (which is always offered) and PLAN A FEW MONTHS IN ADVANCE.

I plan on traveling about 2 times a year.

[Savingmonster]

Re: IS Saving $5,000 a year a good idea?

Then you will be doing great!! It is so good to start when you are young!!

Yeah, I've read your posts and you have been very encouraging. Hopefully when I am your age, I will be close to what you've accomplished.