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**Ima saver** · 08-14-2007, 07:34 AM

Yes, I would definately open up a savings account. Where in the world can you get 6%, I can only get 5.25% and that is with a balance of at least $50,000.

**red92s** · 08-14-2007, 07:50 AM

Originally posted by Ima saver View Post

Yes, I would definately open up a savings account. Where in the world can you get 6%, I can only get 5.25% and that is with a balance of at least $50,000.

Florence Savings Bank (can't post the URL, new member). It's actually checking, but I needed an account with paper checks for rent since I only had ING before. They have a few stipulations to earn that rate:

- 12 debit transactions a month (met, morning cup of Coffee at Dunkin')
- ACH payment or direct deposit (met, payroll DD)
- E-statements (I hate paper statements to begin with).

BUT, if you meet all those, they refund ATM fees and pay 6.01%

**pearlieq** · 08-14-2007, 08:13 AM

It's a personal decision, but I'm not usually too much of a fan of company stock purchases, for the simple reason that it puts a lot of your eggs in to one basket.

Not only are you holding a great deal of one particular stock, but you're also investing quite a bit of your financial future in a company simply by working there. If your company pulls an Enron, (or Tyco, Andersen, etc.) not only are you out of a job, but out of a great deal of your portfolio.

Are you also getting company stock as all or part of the 401k match at your work? You don't want to get overloaded with any one type of investment.

You'll have to figure out what works for you, but my personal advice would be to tighten your belt for 4-6 weeks and pay off the CC while also accumulating about $1500 is a liquid savings account (no CDs). Yes, you might be tempted to spend it, but to be blunt, you're just going to have to get over that. Part of getting established is learning to to keep your mitts off the savings!

Once you're done with the CC and small savings fund, go ahead work up a liveable budget that includes money for the fun stuff a normal 20-something does, along with money to put aside both for long term savings and short term wants (that DVD player, a vacation, etc.).

I would recommend creating an emergency fund (laddering CDs is fine, or a high yield savings/money market) of about 9k or so (6-7 months expenses) and also starting a Roth IRA.

Good luck to you!

**Ima saver** · 08-14-2007, 08:15 AM

You need to have an emergency fund of at least 3-6 months take home pay. In your case, that would be about $9000 - $18,000 you should have saved in this savings account. I go for six months cause we are self employed. (that is a great rate)

**Ima saver** · 08-14-2007, 08:17 AM

After that, I would open a roth IRA. You have the power on compounding on your side right now. Please start young. You have the potential to be a millionaire if you start saving early.

**red92s** · 08-14-2007, 09:14 AM

Originally posted by pearlieq View Post

Are you also getting company stock as all or part of the 401k match at your work? You don't want to get overloaded with any one type of investment.

401k and match is not going into company stock. I don't plan on investing in the company beyond what I contribute through ESP. It's a company that has recently added some great leadership and is diversified in several consumer-product SBU's, many of which are showing strong growth within their respective industries.

Thanks for the advice. Today is payday, and so begins the quest of building liquid savings.

**DebbieL** · 08-14-2007, 10:08 AM

I think you are doing fantastic for your age! Congratulations, and keep it up. You will be sitting pretty in no time with your financial attitude. I was nowhere near where you are at that age.

**mekish** · 08-14-2007, 06:43 PM

i think you're getting a good deal on the company stocks, if its a growing company that 5% discount could mean thousands in a years time. you can keep buying abd selling those shares.

**project15** · 08-15-2007, 04:24 AM

A tip on the random spending: give yourself an allowance.

Give yourself $50 or $100 a week or whatever you think is reasonable for this point in your life and don't spend more than that. If you want that $300 LCD monitor or $50 video game, you'll have to save your allowance for a few weeks to get it.

So if you have $1500 in expenses, and an income of $2500 a month, with the allowance, you know that you'll only spend $200 a month on entertainment/eating out/other and you won't be spending the other $800 on random bar visits or something else like you may have been doing without knowing this whole time.

**kv968** · 08-15-2007, 04:54 AM

I know your original question was about an EF (which I wish you luck on building), but I'd like to comment on the company stock also. Although you're getting a good deal with the 5% discount, you shouldn't really have it account for more than 10-15% of your total portfolio. I'm sure it's a great company but anything beyond that may be too many eggs in one basket. Take it from me, I work for a major pharmaceutical company and had way too much in company stock when it took a dive. I'm still recovering 10 years later. Not saying it'll happen with your company, but just be careful no matter how rosy the future may look.

**red92s** · 08-15-2007, 05:17 AM

Originally posted by kv968 View Post

I'd like to comment on the company stock . . . Although you're getting a good deal with the 5% discount, you shouldn't really have it account for more than 10-15% of your total portfolio.

At this point, it's a fairly small percentage of the investments I have (neglecting retirement accounts). I've only been contributing for a few months, and have another investment account with some diversification (although not a ton, due to my age and length of investment history).

I made a large CC payment last night, put the credit card in a zip-lock baggie full of water, and threw it in the freezer. It's now encased in a solid block of ice. Getting to the card for an impulse buy requires waiting a few hours for it to thaw, allowing time to think about the purchase, but it's still available if it becomes a necessity in an emergency.

**FrugalFish** · 08-15-2007, 06:15 AM

You are doing fantastically! There are many people twice your age that don't have their stuff nearly as together.

I'm surprised no one tossed out the old adage of "pay yourself first"- once you have your budget where you like it, figure out how much of it you want to save and put it in that savings account immediately! I use to have my emergency fund in a separate savings account at the bank- one that required a signature to complete transactions. That way it couldn't be taken out without actually walking into the bank. If you are prone to skimming too much from your savings, that's a good way to break the habit.

**pennrj430** · 08-15-2007, 07:43 AM

Red, here is what I would do in your situation. It might seem a little extreme, but it will work fast for you, and you can start saving a lot more then the way you are thinking of going about it. Just an idea.

I'm guessing that after your Total fixed costs (1,275) + your car payment (160) + your estimated credit card min payment (85) + some fun money (200) are subtracted from your total take home after deductions (2,720), you are left with about $1,000 extra money a month.

Now, here is what I would do... Take that 1,000, and pay off your CC in one shot the 1st month, now the credit card is gone and now you have about 1,085 in extra money per month. Now take that 1,085 and throw it all towards the car starting the 2nd month. Buy the middle of the 5th month, you will be debt free, and have an extra 1,245 a month. If you then start putting the 1,245 in your savings, you will have $7,470 saved a year from now. And in 2 years from now, if you kept putting that away, you would have 22,400 saved and 0 debt!!

Anyway you go about it is going to be a great start. I just wanted to throw in my 2 cents. Good luck Red! Keep us updated.

**jIM_Ohio** · 08-15-2007, 10:30 AM

You are doing well.

Keep the stock purchase plan
keep the 401k at 8% (is this the % you contribute?)

I would put $50 a month or $50 per check into a savings account to build it up. Your direct deposit will probably allow up to 3 accounts be used. Set up a third account not linked to your atm card and just let the money grow.

In addition I would make it a point to get the CC debt to zero. Your most important objective should be staying out of debt and the second objective should be living on less than you make (take home).

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