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How much should I be saving?

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austin
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savings  Reply with quote  

A lot of great posts in here.

I would try to save 50% while living at home. If you have to pay for tuition maybe 50% - tuition. But ideally I would save as much as possible. If you can save 75% why not. The nice part is that as you save you will be able to save a greater percent of your income as your income rises from interest from the money you have saved.

I dont know about the school loans. Ideally if you get a 1% loan from the school you can put that money into the bank and get a 5% return. The problem is that you have to make sure you are really going to save that money and not spend it.

Basically if having more money in your pocket alters your spending habits I would not get loans.
Post Tue Jul 17, 2007 5:17 am
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Case-Face
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10%  Reply with quote  

But you should save more than 10% if you don't have a lot of living expenses.
Post Thu Jul 19, 2007 3:39 pm
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California Health
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Don't get caught up in hard and fast rules.

Make yourself a simple budget and base your savings on what you can reasonably afford to do.

Keep in mind paying off ccards and high interest debt should be #1.
Post Wed Sep 12, 2007 7:21 am
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Apollo
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Re: How much should I be saving?  Reply with quote  

Since you stay with your parents I would recommend the following:

1. Safe 25% of your income. Open a separate account for that and automatically transfer 25% into that account every month. I would use a money market account for that. Do an auto-transfer to avoid spending that money on something else. It also teaches you to be disciplined which is very important for the next thing I recommend.

2. Start to invest your money. The sooner the better. Open up an on-line brokerage account and transfer 25% of your income into that account. There are many strategies out there and they really all depend on your preferences. Should you decide to invest your money ask yourself the following questions:

a) What are my investment goals?

b) What is my risk tolerance?

c) What is my time horizon?

Out of the 25% which are for investment purposes I would use 10% for a longer-term strategy and 15% for a short-term investment strategy (You may want to open up two different brokerage accounts for that)

Why only 10% for a long-term strategy?

1. You should have a 401k with your employer. I assume that you have $2,300 net a month. You're young now and can afford to take more risk. You can increase the percentage as you grow older if you wish.

2. The 10% which you will use for your long-term investments will serve as an additional source of retirement income.

The 15% for a short-term investment strategy:

1. The purpose of this strategy is to create monthly income. Since you don't pay for housing you can use that money to fund your long-term investment account or put it aside as you probably want to buy a house, a car or any other liability.

2. Don't withdraw any funds from your short-term account except for the money that you will earn (of course you won't always have profitable investments, everyone will face losses from time to time). From the money you will earn I recommend to leave 50% in your brokerage account and increase your total capital which will increase your monthly cash-flow over time. The other 50% you may want to withdraw to your checking account if necessary. If not you may want to contribute those funds to your long-term investment account. I would contribute 25% to your long-term investments and use the other 25% for everyday purposes. Should you not need addtional income leave as much as possible in your brokerage account. You will need those funds later on in life.

Once again there are many investment strategies out there. Do some research and find the one that is best suited for you. Remember one thing:

There is no right or wrong strategy just a good and bad strategy.

It all depends on your personal preferences.

It is not smart to play it safe but it is safe to play it smart.
Post Sat Sep 15, 2007 5:54 pm
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btacay
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Re: Good Money Management To Save Money  Reply with quote  

Setting up an automatic savings plan where 10% of each pay is allocated towards wealth creation before you start spending is an excellent start towards good money management.
Post Sun Oct 03, 2010 9:51 pm
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mukeshkkashyap
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basically, SET GOALS, and move toward them...that will tell you how much you need to save
Post Tue Oct 05, 2010 1:38 pm
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Sime
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One can never have enough savings.

Not all countries can afford... a lavish monarchy.
Post Tue Oct 05, 2010 4:29 pm
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wystanfi
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[deleted]  Reply with quote  

Many people give you ideas. But I like rockhound's advice. I think you should go with rockhound's advice.

Thanks & Good Luck.
Post Fri Dec 24, 2010 10:01 am
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Darga19
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quote:
Originally posted by oldguy
bijan.
What you do with 'savings' is far more important than how much you save - consider 3 examples:
Ex #1 - Save $200/m in a 12% fund for 35 years = $1,160,000.
Ex #2 - Save $200/m in a 5% CD for 35 years = $228,000.
Ex #3 - Save $39/m in a 12% fund for 35 years = $228,000.
And 'when' is also very important -
If you wait 10 years and then start, example #1 looks like this -
Save $200/m in a 12% fund for 25 years = $358,000.


Example 1 vs Example 3 shows that your savings rate (how much you save) is one of the most important factors, just as important as where you put it! Right?
Post Thu Jan 13, 2011 12:08 am
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wystanfi
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Re:How much should I be saving?  Reply with quote  

Hey. I read all the thread over here. But I like rockhound's advice. U should go with rockhound's advice.
Post Mon Jan 24, 2011 5:39 am
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nature
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Very Informative discussion.
Post Mon Jan 24, 2011 2:56 pm
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moneymakerclub
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start a business and... invest invest invest
Post Tue Jan 25, 2011 8:38 pm
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moneyclass
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first off gotta say thats aweosome your making that amount of money and living at home. for retirement ill say save 10%. but i would even save for a down payment on a house too.
Post Fri Feb 04, 2011 4:26 pm
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jinglingwulei
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I think it's good to save during the recession because the inflation rate is low and the economy is not good for buying. So the interest rate will be higher than inflation rate. So it's better saving then spending.

In the other hand,however, during the economy upturn, the inflation rate will higher then the interest rate,which means your money will not have the same value after a few years if you save it now. Since now there is a recovery in the global ecnomy and the recession is no more around, i suggest you to spend your money or do the investment.

For the saving percentage, I think 30% is good for you because you are still young and need to save money for buying properties.
Post Tue Feb 08, 2011 12:40 pm
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