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    Help on how to save money

    Im trying to save for this things but dont know if i should just save everything into one account or have each saving seperate ?here is what ill save for :

    emergency fund
    car
    lowrider car
    house
    retirement

    #2
    Those are all different goals and shouldn't all be lumped into one account as how you invest those funds will differ.

    Your emergency fund needs to be safe and readily accessible, so that is typically held in a money market account.

    Car and house savings are near-term goals. How to hold that money will depend on your timeline. If you will be buying either of those within 5-7 years, you could do some combo of money market and CDs. If you are looking beyond 7 years, you might want to put some of the money into the stock market through diversified mutual funds.

    Retirement is a whole different ballgame. Depending on your age, that is a long-term investment and you will want a significant percentage of your assets in the stock market. As far as account type, you want to maximize your use of tax-sheltered accounts like 401k, 403b and Roth IRA depending on what you have available through your employer and on your own.

    As for the lowrider, since that is a total luxury purchase, a want not a need, that gets crossed off the list entirely until all of your needs are being attended to. Until you have a fully funded emergency fund, are putting at least 15% of your gross income into retirement savings and have your primary residence and every day car taken care of, just forget about buying expensive toys like that.
    Steve

    * Despite the high cost of living, it remains very popular.
    * Why should I pay for my daughter's education when she already knows everything?
    * There are no shortcuts to anywhere worth going.

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      #3
      Hi,

      One important thing that you should try to do is make all your savings automatic. Try setting up a savings account that will automatically transfer money from your chq account to your savings account. Try to set up one with whatever you're comfortable with and you'll be surprised at how fast money will start to accumulate when you don't think about it. As for the larger purchases, you’re probably going to have to leverage yourself to acquire those, unless you want to be saving forever.

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        #4
        Before you can determine what to save for, you simply must understand how big the gap is between your income and expenses. It's critical to know how much extra income you have each month in order to prioritize the use of those funds. Clearly debt should be paid off first. If you have a car already, you can knock off two items on your list right away and simply focus on your emergency fund, purchasing an affordable home and beginning to save for retirement. However, it starts with understanding you financial situation--it starts with a budget.

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          #5
          Try using the money jar system

          Well, they aren't actually jars, but I teach a system that teaches you how to divide all of your income into at least six different categories:

          Living
          Freedom (investment money for later...I also call this your Golden Goose money:-)
          Saving (for 'just in case' items and items you want to save up for)
          Education (because we're never finished learning)
          Play (so that you always have money to playa with)
          Donation

          When you see that your money has different 'jobs' so to speak, you begin to compartmentalize your income into smaller pieces that then start adding up organically, i.e., naturally.

          The best part about putting money into different jars, or accounts, is that the more money you put into the accounts (except for living, play and donation which probably get emptied every month), the more money you want to put into the accounts because it's so much fun watching the amount of money in them grow.

          Try it...

          Elisabeth

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            #6
            When it comes to family money management; a good initial step would be to prioritize those goals. Once this is done, you really need to put together a realistic budget of your present expenses and your incoming cash flow. By weighing your monthly income to your monthly expenses; you are in a much better position to get your game plan together to tackle your objectives.

            Tim
            Family Money Management, Basics Of Home Personal Finance

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              #7
              Automatice Savings

              Originally posted by CalireEHughes View Post
              Hi,

              One important thing that you should try to do is make all your savings automatic.
              I think this is the easiest way to save. You just have to set it on autopilot.

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