Need advice on saving!

[eisor]

Hi. I'm fairly new here, but I stumbled accross this site because I was looking for a way to save for the future.

I'm 19 years old, in college (debt free) and working.

I'm interested in saving for two different things. I have a lot of major expenses coming up in the next 5 years, so I want to begin setting aside money for these things. I also want to begin saving for retirement.

I know that there are savings accounts from places like emigrantdirect.com with a high interest rate. I thought that this might be best for my 5-year expenses and general savings.

I know that Roth IRA's are best for retirement. However, I'm making a limited amount of money right now, and not sure I'd be able to put money into it on a frequent basis. Are there any minimum requirements, or rules on when you can and cannot take money out? Is there a good website with information on Roth IRAs?

I guess the problem is, I don't want to start putting a bunch of money somewhere and not have the option to take it out. I don't know what turns are going to come in life, so I want the availablility to access money if an emergency arises. Would I be better off for now, to just save all my money in a savings account with high rates?

If anyone has any helpful suggestions for me, please reply.

Thanks!
Rosie

[billybob]

Re: Need advice on saving!

It's always good to save for retirement early, but as you are only 19, you can probably wait a bit. I would put your money in Emigrant savings account for now. Once you graduate college, and get a job, I would immediately start saving for retirement.

[sakigt]

Re: Need advice on saving!

Start building credit. When I was your age (a whopping 4 years ago) I had already had 2 credit cards that I used and paid off. A few months before my 20th birthday I was approved for a new car loan at a small 5.25% You dont need to buy a brand new car but starting now showing that you can make payments monthly will definitely increase your savings in the future when its time to buy.

Save up, but keep most of your savings in an ING account. It earns a high intrest but is very easy to take out. At your age you need that flexibility for important things, but its not as easy as swipping a card (good for stopping impulse buys).

Keep smart. Build credit. Im closing on my condo in a month and Im doing so with the first time buyers program but mostly because of my stellar credit score.

[eisor]

Re: Need advice on saving!

Thanks everyone!

rexdart: I currently have $2500 saved. I wouldn't mind putting this towards my starting deposit. I just want to make sure I have the option of retreiving it if I need to.

sakigt: I have one credit card right now. (Took a while to get.) It is a student card. I've applied for another one already. I pay my card off in full each month. Since, I don't believe in going into debt for any reason, I won't be taking out any loans to build my credit. Believingly, just having a credit card will be enough to start it.

Right now, I'm thinking I might just put my $2500 into an emigrant account and then add a set amount every month. Then, when it comes time for my big purchases, I'll have money available. Then, once I graduate and start teaching (that's what i'm going to school for), start thinking about retirement. I mean, that is only 2 years away. I'll be graduating when I'm 21.

[Ima saver]

Re: Need advice on saving!

I noticed my bank had an Ira account that started with $500 and payed over 5%. Maybe you could start that way. I am all for teenagers starting a roth ira with their earned money even if they can't put any more in for a while. Keep the rest in one of those high paying money market or savings accounts. Only put in your roth, money you won't have to touch, but do start it early. It makes a big difference in you future wealth.

[Haku]

Re: Need advice on saving!

Ah, someone caught it before I did. Yes, please focus your money on an emergency fund for now. Since you're ahead of the game, it wouldn't hurt to build it to as much as 10k if you want to.

You mentioned a 5-year plan, and if you are risk-adverse, you can always take out CDs.

All of these things, including setting up an IRA account, can be done at most any banks. Perhaps it's time you give them a visit.

Finally, a big "bravo!" for thinking ahead at such an early age.

[rob62521]

Re: Need advice on saving!

Eisor: Wow! You are way ahead of the game with your thinking! My nonprofessional advice is when you graduate and land your first job, live below what you make and save the rest. I wish I had the forethought to start saving for my retirement at 19. I didn't start until I was 27.