I still feel behind my peers.. thoughts?

**kork13** · 06-30-2015, 10:04 AM

Realistically, you're doing just fine, if not quite well. At 25/26, having no debts at all is the first step in the right direction. Having $45k in the bank as well just means you're doing all the better.

With your variable income, you will definitely want to maintain a higher-than-normal emergency fund (perhaps as much as 1 year's expenses, but definitely no less than 6 months' worth. Beyond that, do you have any retirement accounts at this time? A Roth IRA or 401k? If not, you definitely need to start a Roth IRA for yourself (Vanguard is a good place to start), at a minimum, and max that out each year (currently $5500/yr). Likewise, if your job offers a 401k, take full advantage of that. Otherwise, just make sure that you are saving regularly (at least 15% of your income, more if possible) and keep your expenses in check. With a variable income, a good way to go is to establish what your minimum earnings would be in a month, and try to live within that amount year-round. That would let you save all of the excess, and you don't have to worry in times of "famine".

The other thing you have going for you is the automation design/building side-hustle you're working on. If you've got the entrepreneurial mind to do something like that, keep it up & develop it. Don't rely on it, but use it to your advantage, and continually work to improve on that side of things. As you continue, you can build up a customer base, and if your tools are effective & well-marketed, you can slowly build that into more of a company of your own.

You're doing well! With the right strategies & habits, you can be very successful for yourself and in providing for your future!

**ua_guy** · 06-30-2015, 10:08 AM

The first piece of advice I can give you is that comparing yourself to others based on money is a dangerous thing to do. Finance is first and foremost about meeting your own goals and expectations. Are YOU on track for what YOU want to do? Only you can answer that.

I can give you a few numbers to think about as well.

$5,047 is the average credit card balance of an adult in the US.
You have no outstanding debt, so, well done!

$3,000 is the average retirement account for working households (<59 years of age) and $12,000 for near-retirement households (ages 59-64). If you haven't started saving for retirement, you should consider doing so--and you'll be ahead of the majority of Americans in a very short time if you consistently contribute.

$5,923 is the average cash savings account balance in the US. You have $45,000 saved, so you are doing better than most.

Most of your peers (and a majority of Americans older than you) are probably elbow-deep in student loan debt, first home mortgages, brand new vehicles, and consumer debt. They have less cash savings, and their plan for retirement will include coupon-clipping for discount cat food, because that's all they'll be able to afford to eat.

So, keep on keeping on... Post up if you have specific questions about saving, money management, income, or anything else.

**misery** · 06-30-2015, 10:27 AM

Thank you both for the encouraging words. Those statistics help put things into perspective.

I should have mentioned though, that I live in Canada don't think my job offers a 401k plan because I'm essentially a contract worker, with my own business/tax number.

Perhaps a TFSA account is my best bet for retirement, and ensure that I max it out each year? Can you recommend any strategies to handle the "retirement" side of my finances. I'm not sure if an IRA/Vanguard is applicable to Canadians or not.

Any feedback at all is great, thank you.

**autoxer** · 06-30-2015, 12:25 PM

I don't know much about Canadian taxes, but I read the TFSA is better for short term goals and an RRSP is better for long term planning. Check out some of the Canadian finance blogs like: http://www.moneysense.ca/ or http://youngandthrifty.ca/

**Fishindude77** · 06-30-2015, 12:46 PM

My guess is you are way ahead of most of your piers financially. Not many 26 year olds can say they are debt free and sitting on $45,000 cash. That's awesome !

My recommendation would be to keep that $45K safe somewhere in savings as an emergency fund, etc. and start putting some significant future savings into a long term retirement investment tool such as a 401K or similar. At your age, with your saving discipline you should be able to accumulate a hefty nest egg by retirement time.

Buy your cars, toys and vacations cash, and don't go overboard if /when you decide to buy a house and you are on the right track.

**snafu** · 06-30-2015, 01:02 PM

Welcome to SA. I hope you'll read some of the past 'threads' that will likely help bring you up to date on money management skills. I'm sorry to see you have not yet begun your RRSP [Registered Retirement Saving Plan] which gives you an income tax deduction for all contributions up to 18% of earned income annually. Your Notice of Assessment has a tear away section that identifies the current allowable window.

The plans offered by the 5 major banks are nearly identical but until July 20th, CIBC is offering aa lower cost purchase {I think] but don't jump without verifying because the devil is in the details and they have so many names for 'take money from your account to theirs! I thought the Automatic Millionaire, [David Bach] Canadian edition was an easy, practical read with electronic version available on-line for free from your public library If you prefer a hard copy, get it 2nd hand from any of the on-line book sellers.

RRSP accounts are totally transferable and you can buy and sell holding as things change. Self administered accounts are least expensive and can hold a mix of stocks, bonds, mutual funds, ETFs [Exchange Traded Funds]. There are several Vanguard Funds sold on the TSX [Toronto Stock Exchange] if you like. Until you become more familiar and comfortable with this new process, I suggest you keep it simple with the Index Fund from whatever institution you choose. I recommend you start with an pre authorized, automatic monthly contribution so that your RRSP account will be buying more or less units each month depending on the fluctuating value. Yes, the value goes up and down and sometimes it feels like a roller coaster given our commodity based economy.

**rob62521** · 07-03-2015, 04:16 PM

I would say you are dojng well with no debt and money in the bank. I would encourage you to continue the good work you have been doing and keep saving and being debt free. You are young enough that putting money in retirement as will help you when you get retirement age. Do not try to judge yourself by your peers. Some folks live beyond their means, but appear to be doing quite well until something comes about and they can't make a payment and the dominoes start. Live below your means, enjoy what you have, and do what is best for you.

I still feel behind my peers.. thoughts?