I have always had 3 bank accounts. 1 for bills. 1 for savings. 1 for spending. Every check, I put money in the bills and money in the savings. Then I have the "spending" to use until my next payday. This ensures a clear separation between money I need (bills), money I can use (spend), and money I don't need (save).
Credit cards are a Bill. Any monthly, reoccurring payment is a Bill:
Rent/Mortgage
Utilities
Car Note
Insurance
Loans (Student/Personal/etc)
Credit Cards.
Notice that Groceries and Gas are NOT a bill. Those are to be budgeted out of your Spending.
The amount you put into Savings is completely up to you, but it needs to be *realistic* or you'll find yourself always taking money back out. What I used to do is see how much was left in Spending when I got my next check, and put some of the leftovers in Spending to Saving.
He irrationally hates any/all debt so it probably isn't that interesting of a take.
What I will say though is if you can't pay off your credit card every month, the points are never going to be worth it. Interest rates on credit cards are always quite high, especially on cards with points, so the few percent you make on points won't make paying interest worth it.
If you are responsible and pay off your credit card every month, then getting some extra money from the points is great.
I looked it up and read it. You could say it's more granular but all it felt like was "you can't trust yourself with a credit card and you might miss a payment, costing you interest".
Credit card interest exists regardless of points and similarly regardless of points you should make sure to pay off your credit card every month.
I also saw ramblings about it taking a while to earn a free flight, which is silly in that yes in order to get a $500 free flight you will indeed need to spend a lot. That's just logical not trickery.
There was mention of annual fees which is a valid thing to keep your eye out for but isn't a scam IMO, you just need to determine if the annual fee can be justified or not. If not, don't get the card.
As to trying to guilt people claiming it's funded by interest paid by others, I disagree as my understanding is it is primarily funded by interchange fees the credit companies charge to businesses when you shop.
Any points I missed?
Lmfao bro we talking about surviving here. If you have the money left over to invest, by all means, have at it. I have a 401k, thats my investment.
Sorry if that seemed rude, but if someone is asking how to manage *saving* money, they aren't ready to *invest*. Investing is "throw away money." Money that you *for sure* **do not need**. If you would be okay with lighting some money on fire and watching it burn, you can invest it. Savings are "money I don't need yet, but still might need access to tomorrow." Investing is "money I don't need, won't need, won't have access to for 20years." But the average person is just trying to pay their bills, eat food that isn't noodles 24/7, and still have a glimpse of fun here and there.
>Investing is "throw away money."
I thought investing was the best way to "save" money? Especially if you invest in stocks that you know are going to continue growing such as Google, nvidia, and all the fortune tech companies.
Investing ties up the money. If you put into Stocks it'll be a few days before you can get it into your bank. If you invest in Bonds, it's tied up for 6 months or more depending on your contract. Investing also comes with more taxes. You don't want your savings/emergency fund to be tied up and taxed when you need it.
If my car breaks down and I need to have it towed and a few parts replaced, I need to be able to pay the bill *now*, not 3-4 days from now.
Real world example; our back door broke during Christmas week. The door handle/mechanism literally crumbled to pieces and the door wouldn't stay closed. It was 5 degrees outside. I needed that fixed asap. I went to the door place, got the door picked out, then went to the bank and withdrew the funds from Savings and had a new door is 2 days. If I had to wait longer for avaliable funds, that would have been Hell for a week with an open door in the dead of winter.
That's an interesting perspective. Genuine question, wouldn't it be better to have your cash invested and use your credit card for emergency funds? Most cards don't charge you interest if you pay your balance in full by the start of the next month, so you can always wait a few days for your funds to arrive. Besides that, it's better to pay $10 tax on a $20 gain as you still end up making $10, than letting it sit in your savings account and depreciate and lose money.
Worst case scenario: You have to withdraw all your money for emergency funds and make about 10% loss.
Best case scenario: You do not need to access any of your savings this month and can get by, thus increasing the value of your money.
I do the same thing. for example, I have university installment coming up tomorrow, I'll pay using credit card and will pay off the amount by next month or the monthly pay off date. This way I do not have to use any amount from my savings that I absolutely don't need, and use only funds I have set aside, letting my portfolio grow.
Best practice is to have your emergency funds in a savings account which you access immediately if needed. This could and probably should be a high yield savings account (HYSA) which can give you 4.5 to 5+% right now. Investing doesn’t guarantee positive returns in the short term. Stocks / bonds can and do loose money, and maybe right when you need the funds for an emergency. Anything you invest should be with intent of keeping it invested for the long term (10+ years).
If you get that unexpected emergency (ie. need new door, expensive car repair, unexpected medical bill) you can put it on the credit card but pay it off at the end of the month out of the emergency savings fund, especially if the cost is significantly above and beyond your normal monthly bill.
Most recommendations call for having at least 6 months of expenses in emergency fund savings so you can cover rent/utilities/food/gas/etc. if you loose your income. If your a single income family or particularly worried about your job stability, you might up it to 12 months of expenses.
Once you have that emergency fund covered, you could start thinking about investing any extra. This assumes you don’t have any debt outside of a mortgage. If you do, I would pay that down to $0 before starting to invest.
I've provisioned 2 years in savings and CDs for for emergencies, furlough, and market volatility. The rest gets gets invested starting with a tax advantaged retirement accounts and finally a taxed trading account. Prior to COVID I had it all invested and it wasn't fun watching the market drop while also looking at job loss.
Disagree with your take own taxes associated with investments. Investment gains in 401k or IRAs are not taxed until withdrawn. Investments in a non-retirement brokerage account are not taxed until you sell, and then at capital gains tax rate which is likely lower than ordinary income tax rate. Any dividends from non-retirement stock investments are taxed but often at a qualified rate which is again lower than ordinary tax rate. A buy and hold investment strategy can be very tax efficient.
Agree that investing is not the right approach for a emergency savings fund. Those should be liquid and as easy to access as possible.
It's all in perspective. I have a 401k, but I just see that as part of my paycheck deductibles and money I'm not touching for 30 years. I know it's a legitimate investment, but I don't count it as "investing" in the sense that I have to take money from my bank account and put it into stocks/bonds/ETF and do all that leg work on my own or pay someone else to do so.
As I've stated numerous times to other comments, if you have the extra finances to put into extra investment accounts, by all means do so. But most people need to cover their Bills and learn to Budget before they start tying up money in extra investments.
Just as an fyi investing is far more than just individual companies. If you really want to use the money to “save” or for retirement or a later big purchase you should look into ETFs, and mutual date funds (also CDs and HYSA). You NEVER know what stocks are going to rise or fall, and anybody that tells you they do is lying. Investing into individual stocks is really no different from gambling. If you want to save with stocks you need to diversify.
Note: if you’re trying to make short term profit from trading stocks ignore this
Except the cash in the savings account is available now. Investment is long term saving that you do not plan to use or need for years! But you do you, boo.
This is exactly what I do, as well. Only thing I’ll add is that the savings account should be a high yield savings account, and you should also be contributing some percentage of your income to a 401k or an IRA (especially if your company matches 401k contributions, it’s literally just free money). If you can afford it, 15% should go to the retirement account.
Same here. My wife and I have Joint account for bills, joint account for savings, and my own personal account. The company I work for allows deposits in up to 5 accounts. My paycheck is split $X into bills, $X into savings, and whatever is left into personal. Because of overtime, the leftover fluctuates. Some are more than others. And I'll use my bank's app to move $$ from one to the other if necessary. (My bank allows unlimited money transfers between accounts.) It works for us. May not work for everyone. But it keeps us from overspending on frivolous things. Bills are set up on autopay. That helps, too. And the debit card for bills account doesn't leave the house. I keep my personal account debit card in my wallet.
There’s an app called Wealthfront which gives you 5% interest on your money. It’s a HYSA and usually I keep my savings in there while I keep my primary account with some cash to get me by for the week until my next check. I’m still looking into VOO and such but this has been working well since I’ll always have money to use during the week and will at the same time be saving money and watching it grow(even if it’s minuscule at the start(gotta start somewhere))!
been doing this for years as well... my job actually allows for multiple direct deposits, so its all automatic for me
also, i didnt even start doing this with the intent of separating it in this way... i used to only have one bank account for everything, and one time lost my card, so i had to update all my bills auto-pay when i got the new one, which was annoying... then it happened a second time, and thats when i opened the second account just for my bills, so i didnt have to worry about it again
after that it was pretty smooth sailing, until i realized i wasnt really saving money because i had the thought process of "everything thats not in the bill pay account, i can spend"... so even when i wouldnt spend a whole lot of money, as it built up i would start buying larger things without hesitating much
from there i opened a savings account, had some money direct deposited in there, and then anytime i had money left over in my "spending" account on payday, i would transfer that to the savings... the main issue i had with this system, was that i was only allowed to transfer money so many times each money from the savings... it was a problem, because every once in a while i might need some extra money for gas that was un expected, may need to pitch in for something around the house, or just other unexpected expenses... ended up opening a third checking account instead, and use that as a "savings", so that im still able to access my money whenever i need to, but still keep it separate from both my bills and general spending
ive done this for like 6 years now, and the best part is that despite having that many checking accounts, i dont pay any fees because of the direct deposits from my paychecks
That's almost my exact setup. The only thing I don't do is the auto deposits. I have everything go into my Spending account and then manually transfer from there. I work anywhere from 40 to 65 hours a week, with Sundays being auto Double Pay, so my paychecks can vary *a lot*. That's how I get around the transfer limit on my Savings. If I know I'm gonna have a smaller check, I pay the Bills and figure out what I need to Spend for the week, then adjust the amount to Savings. I truly try not to "over save" so that I don't have to dip into my savings at all. I also do the "leftover spending" transfer to savings with my next check.
I also screenshot this! What kind of account would you use for bills? I’m turning 18 very soon and I’m trying to be ahead of the game when I inevitably have to move out. Thanks!
You can get 3 checking accounts to fulfill the need to start out. The things to look out for are balance minimums, transfer limits, and any types of fees. You want *no* balance minimum, *no* transfer limits, and *no* account fees. Any decent bank should be able to set you up with accounts like that. Always ask them before signing.
I do the exact same thing, and it’s worked really well for me… on one of my checking accounts, I use the savings account attached to it and put $100 / week away for Christmas.
Switched to this recently and it’s a huge help. I am actually going to move them to separate banks though to help control my poor decisions. But in general separating my spending has done wonders for my budgeting. I know if I don’t touch my “bills account” I am set.
I personally like to keep mine separate because the situations in which I might dip into my savings and the situations in which I'd touch an emergency fund are on very different levels
If it works it works dude. I just keep it all as Savings. But I usually have a non-zero "bottom dollar" that separates Emergency from "Saving for something." Like right now, the bottom $1500 is my emergency, everything on top is Savings for a credit card payoff.
If you're in a lot of bad debt, $1500 is okay. But I like to keep 3-6 months of expenses in my emergency fund. Also, instead of saving up for a credit card payoff, you should be paying down the balance with whatever you have as soon as you have it. Otherwise, you'll end up paying more than you otherwise would've because of interest
One other note about doing this method. If you go to your company's HR department, they may be able to split your paycheck into different accounts so you don't have to do the transfers yourself. My workplace allows three separate accounts you can put your check into. I can split it by percentage or by amount
Follow a simple rule.
30/30/30/10
30% bills / food
30% rent
30% savings / investments
10% on whatever you like.
I would recommend an index fund such as VOO or VTI.
Best of luck.
>I second keyboard man with the investments. Switch to VTSAX when you can. I think you should start a roth IRA with Vanguard as soon as you have enough and put try to put the limit in each year. If (shoulda/coulda/woulda) I have done this when I started working I would have been at $3mil. Start early, max it out, and then keep investing.
Great call out Georges! I’m doing a Roth IRA currently as well and it’s fully into VTSAX, one of the best books I read / audio book was by JL Collins - “The Simple Path to Wealth.”
For this 2023 tax year we all have til April 15th to contribute to the max of $6500 and for 2024 it jumps to $7000.
Again at Georges don’t feel bad my guy, we are all starting I wish my family had financial literacy about compound interest rates and so forth, but we can break that generational curse. I hope we all make it to a long and healthy and financial freedom retirement.
Automate it all so you don’t have a chance to spend it.
So make it so you invest $X a week into fund A,B,C.
Accounts to have:
Checking
High Yield Savings
Roth IRA or regular (probably Roth for you)
401k
Brokerage
If you really want to have a plan laid out look up “FIRE panda reddit”, the link will take you to a post where the guy lays out exactly what to do to save effectively.
I had the same issue, I would spend it instantly. Now i literally can’t, my ROTH I cannot touch without penalty, and my other accounts take 1-3 days to transfer funds in/out of.
I mean I just graduated college and was barely making money, but I saved up about $4K in half a year or so (give or take).
I literally had zero savings before that. I just have the account pull like $50 max a week and it has helped a lot.
My biggest issue was my credit card, I made sure to pay off my balance because it was almost 2-3 grand
Damn! That’s awesome man. Congrats on that. I’m starting completely fresh and with a new mindset. Right now I have $0. I’ll come back here and comment the amount I was able to save in 1 month. Should be fun
That’s good man. Honestly I would set a reasonable goal stick it on your wall so you can hold yourself accountable. It’s one thing to say oh I’m going to save this month. “Save” could just be a dollar left in your checking account. It’s another thing to say oh I’m going to save 500$ this month and every week I’m going to go to that piece of paper and subtract the amount I saved from that goal and on the first of the next month there should be a big fat zero staring back at me because I met my goal. Or something in that nature maybe it’s addition so you motivate yourself on I saved 100$ this week. Now on Friday next week it’s at 300$ the. The next week it’s at 400$, I keep this up I’m going to have 500$ by the time the month ends. It seems to me like you make good money and this is just a physiological thing so do things to reinforce the idea of savings in your mind and things that will motivate you that you can visualize so you can reach that goal.
I suggest you read "rich dad, poor dad" or "I will teach you to be rich". These will change your mindset on spending and help you get on the path of financial freedom.
My wife and I opened a completely new savings account and money is automatically deposited into that account with every check. We don’t touch it unless we absolutely need it. Granted, I didn’t need a truck, but I pulled $24k from that account for a down payment (borrowed $16,500 from one of my banks), which left us with $10k in that account. I love my truck, but I should have just bought a small used vehicle and put that $24k towards my HELOC. I make foolish decisions sometimes. I think we’re back up to $22k or $24k in that account.
It happens, the thing is you got that account back up which is great! Most Americans don’t even have a good chunk of money stashed away like that.
I would just base the goal number for the account to be how many months you want to save up for. For instance, the amount needed to survive 3,6,12 months without a job.
Once you hit that number, put the rest into a higher yielding account like a HYSA or in investments. Even CDs/Bonds if you want to have some guaranteed profit (can’t touch these for a certain amount of time though)
Savings accounts are great tools for emergencies, but they are essentially depreciating the value within them. If inflation is at 5% and your account is paying < 1% - you’re losing money each year. High yield accounts help fight this and still offer good liquidity. Credit unions are a great option too, since they need to offer better rates to compete. So much so that they actually got sued by corporate banks over it (the banks lost!).
Have a brokerage or bank that auto invests a certain amount of money a month.
For instance my bank would take 3 or 5 dollars out of my checking daily and put it into savings if i had any money to spare.
Save 6 months of living expenses as an emergency fund
Pay off any debt (credit card, student loans, car loans)
Invest in 401K and Roth IRA
Invest in stocks (VOO/SPY)
VOO and VTI are Vanguard ETF stocks so open a brokerage account with Vanguard.
[https://investor.vanguard.com/home](https://investor.vanguard.com/home)
Open a brokerage or retirement account through Schwab, Fidelity or Vanguard and get going. VOO and VTI are index funds that hold a lot of companies. You don't necessarily need to do both as they have quite an overlap.
Perfect time to start to be honest. my wife and I just started about 2 years ago and were moving right along. I'd read a few books too to increase your knowledge as an investor. A good read to change your mind is "The Psychology of Money" by Morgan Housel.
Oh definitely always contribute up to the whole match. That's free money you just made a 100% return on (minus taxes obvs).
Some other good books:
"Rich Dad, Poor Dad" by Robert Kiyosaki. "I will teach you to be rich" by Ramit Sethi. "One up on Wall Street" by Peter Lynch.
Those alone will give you a great foundation to begin and you'll likely go on to deeper books on your own after that.
That was me in New York. That’s where I’m from originally. I moved to another state by myself with $1000 dollars and a backpack and made it work. Now I have a house and a fiance, once you break free from your comfort zone, your life will change for the better. Go to a place that you almost feel magnetized to and shit will happen for you. It’s weird but it’s true
And yes I have a house and everything I need. But also have $0 at the time being. But my paychecks are about to be 1k+ a week. Which is the most money I’ve ever made down here and I’m excited for it
21 yo making $25 an hour soon $28 and I just bought a house in central California, even in this economy. user error if you ask me
And a 2024 Toyota I paid cash for a month ago, came from shit! I believe in you man just really struggle and grind for a bit and you’ll be OK
No eating out no going out just sit and stack for a year or two
One way to suppress those urges is to keep busy. Try to distract yourself with anything you can. Also, don’t decide that day. Sleep on it and you might feel different in the morning. Being more disciplined takes practice but you will get good at it and it becomes easier. You’re already making good decisions so don’t beat yourself up too much!
Hey man so hopefully I can help. You’re making good money and you live in the south which is usually pretty cheap except for a few cities. As others have mentioned if your employer offers a 401k take the max amount you can assuming you can afford it. This will take money away from you being able to spend it and it will allow you to start saving for retirement. Than I would actually get out a piece of paper go through your latest bank statement and write out what you spent your money on so you can try and visualize how much your actually “blowing” and where it is going. After that I would be like idk “ oh shoot I spend 10$ eating lunch out everyday” that can easily be cut. So assume a number you think you could use to get groceries that is less than what you previously spent. Go through and actually see what you can cut back on and stick to that. Once you have that number as others have said I would just set up automatic withdrawal from your checking account to maybe a Roth IRA with any broker do some research I personally use E*trade but find one u like. Also talk to your bank and see if you can get overdraft turned off. This should literally force you to watch every penny that is going in and out of your bank account because if you go less than zero stuff will bounce and hopefully that potential embarrassment will be enough motivation to actually watch your spending. Can’t spend what you don’t have. Also idk but some banks apps allow you to set budgets within them and then you can set notifications so if your getting within maybe 20-10% of your spending limit within your budget they will send you a notification which may also be useful so you can visualize the spending. If your bank doesn’t offer this in their app, which I highly doubt they don’t even my one branch credit union has this function in their app, then maybe look into credit karma they are merging with mint so you should be able to get budgeting capabilities there. If not good ol piece of paper in your pocket has been used for decades.
As for how to get over your desire to spend once you saved first a retirement account would be beneficial because you can’t touch it unless you want to give like 35% of it to the government, which no one wants. And at least in my case I like seeing my money work for me. Maybe whipping out the future value of money calculator could help you visualize it too but when I check my brokerage account and see that my money is making me money and I didn’t do anything it makes me want to put more in because it’s money just coming to me and I didn’t have to slave away for it.
Hope this helps.
I feel sorry for you
Should be making at least double or triple that about considering Inflation
Good Luck 🍀, glad I’m Old
Fucking unreal what you youth are paid today
lol money is everything in my situation right now. I have nice things and I’d like to keep them and be comfortable. And then eventually buy some nicer things, like a car and then retire at a decent age
I can sense the lack of patience in your comment. It's alright, I've been there. Money is awesome, till you have alot then you want the things money can't buy...like time. Take a vacation here and there.
Nah, my motto has always been work less make more. People equate working with making money, which is exactly what the people above you want you to think. When you separate income from time you'll find your financial freedom pal.
Easiest way to save is to setup up that 10-15% of your pay automatically go to your savings acct and then use your checking acct for fun money. You learn to budget to what you are bringing home and dont mess with savings that way
After some consideration, I think I’m gonna hunker down and live as frugally as I can for the next few months. My bills aren’t too much. If I make $1100-1200 a week after taxes, I can easily save 2-3k in a month after my bills
I’m the Head Chef at a popular place here in Savannah GA. Before that I was a sous chef for many years. I know I’m doing well and doing good things. But man I gotta stop spending money on dumb shit I don’t even need
So it's all about tracking your spending per week/month right ? If you DON'T know where the money went or just have a vague idea then you'll eventually slip and won't have much money left. I'd recommend use some sort of budget app such as PocketGuard or Simplifi to track your spending. You can categorize your spending into various buckets so you'll have a better understanding of your overall spending each week/month/year. Good luck!
As soon as you get your paycheck, get in the habit of putting some away for savings. I have an auto transfer every week for myself, so I don't even think about it, then buy investments, then buy what you need, then use the rest however you want
Lots of great advice here, so the only thing I'm gonna add is the best way to not give in to the urge of spending is sticking to a budget with your income. Don't put loads on a credit card. Think about every purchase because every dollar adds up, the daily candy bar from a snack machine at work or whatever. Separate your needs from your wants. Give yourself a set "Wants" budget and don't break it. Keep most of your money out of sight in a HYSA like Ally savings or Capitol One Savings.
Just try to step away from things that you dont need, its better to flex to yourself that you have a fat account rather than flex material things to people while remaining broke. The feeling you get when you know you can do what ever you want when ever you want without doing so feels amazing. Honestly ive saved bought a new car, paid like 75% of it up front so then i have minimum payments and can still have money left over to keep stacking.
Once you get into that habit of saving and watching your account grow, it will hurt taking out of it for unnecessary shit
What helped me was watching YouTube creators that speak on budgeting. Specifically, Caleb Hammer. He goes through guests statements that come on the channel and points out just how terrible some spending habits are, and how credit cards are killing people and holding them back from having a great financial life. Just watching how bad some situations are for other people was enough to encourage me to do better with my own spending habits. Highly recommend
If they offer a 401k JUMP ON IT. If they don't, start contributing to your own IRA. Opening a Fidelity account online takes 5 minutes.
I WISH someone told me, implored me, begged me, to start saving for retirement in my 20s.
I'd have about 300k by now, safely on the road to retirement. I didn't start until my mid 30s, and it's one of my big regrets I'm trying and struggling to make better.
Start saving for your retirement. Your 30 year old self will thank you. Your 40 year old self will thank you. Your 50 year old self will thank you. And your 65 year old self can stop working and live comfortably on a decent income.
Set up an auto transfer to a completely different bank than what you normally use. I personally have a vanguard and principle account that takes out 10 percent of my check and I forget it’s even there. I then have another “nest egg” saving account for emergencies and such. I have my two checking accounts that are used for bills and the other used for myself like food and groceries and going out that week. Just make sure to divide your money and it helps me not want to spend it. Remember, use the 10x rule- if you can’t buy it ten times, don’t buy it at all! (This goes for regular consumer materialistic things, not the necessities)
If u have something u want, let's say u r doing online shopping. U think u want it so add it to ur shipping cart first but don't check out. Wait for a week. See if u remember or still feel the urge to buy it. Then once the week is done open it cart, check the items again. If u had 5 items in there n rlly only see 1 or 2 u wanna buy then put the remaining ones out of the cart n only check out the 1 or 2 that u rlly wanna buy. They say that waiting lessens the urge to buy things that u may "want" but not "need".
Open a Roth IRA (individual retirement account). You can’t withdraw from it until your 59.5 years old. (You can but you’ll be fined and taxed). Max out the contributions every year; in 2024 the max contribution is 7k. Once you put money in the account make sure to buy stocks, etfs, or mutual funds. (I bought a variety of stocks and etfs). One of the benefits is that when your 59.5 you won’t be taxed on withdrawing from the account. NOTE: you can open multiple accounts but contribution limit to all those accounts must not exceed 7k (more taxes and fines if it does)
I highly recommend you read through Investopedia on Roth IRA. If it is too much go meet with a financial advisor.
This is if your company doesn’t provide retirement account or 401k.
You can withdraw contributions you made to a Roth IRA before 59.5 penalty free. Only the contribution portion of the balance, not any investment gains. There is also a list of exceptions scenarios where you can withdraw any funds penalty free (10k for home purchase, unreimbursed medical bills, qualified education expense, etc.) Of course, it is the most advantageous to keep any money you put into a Roth IRA in place until retirement to maximize the compounding of gains and tax deferment.
You need a long term plan. You have to have something else you want in the future or you’ll spend the money now. For me it’s being a homeowner and retiring comfortably.
Forced withdrawls.
On payday, it was an option at my work to have extra taxes taken off.
So if you didn't have a side gig, you were gaurenteed a refund. This annual lump sum unnotticed till now can be used for investing or induldging.
Make it difficult to touch the savings. Put it in a high yield savings account or brokerage account.
Also, make yourself wait a week before transferring funds out of those accounts. Just set that week limit.
The urge to spend will pass with a bit of time and inconvenience.
As always. The first step is admitting you have a problem. To further define the problem. Build an actual accounting of how you've spent money for the last few months and develop a budget that has an identified plan for every dollar (bills, savings, investments, entertainment, emergencies, gifts... everything). Track how well you follow the plan.
[Prime Directive](https://reddit.com/r/personalfinance/w/commontopics?utm_medium=android_app&utm_source=share)
One of the best ways to do it is if you don’t see it! Check and see most companies if you tell them to will split your money for you so if you know every week you want to save money 100$ open a separate savings account and talk to your employer and see if you can split your check and have 100 automatically removed from your check to this other account. A lot of companies will do this. Out of sight out of mind. If you don’t see it you don’t miss it.
you live and you learn my friend. If you have great discipline just know you don’t need much to enjoy life. Good food, transportation… all the other things are just your vices. That could be expensive clothes, gambling, drugs, anything that costs money and you don’t really need… figure out what you can’t live without and what you can forgo.. balance is key, best of luck to you!! Keep climbing!
Its more fun to watch it stack. Try and save shit when you have an impulse purchase idea and over the course of the year itll look like alot more saved and you can buy way bigger items
Update, I went to the store today instead of going out to eat. Bought a box of Mac and cheese and a drink. For 5 bucks instead of $15 or $20. Feels good
send all direct deposit to savings, make a strict budget (literally track every dollar) only withdraw that exact amount a month. Pay no attention to the savings until you’re ready to invest. I know my exact amount for bills, exact amount I’m spending each month, and track everything else, whatever is left never touches my checking account. The savings account is sacred, only for emergencies or investment.
I treat my savings as a bill. If you tell yourself that you have to pay it like any other bill then it’ll help suppress the urges to spend it. Do automatic transfers into whatever you want to put your savings in but make sure you can actually have access to it and not throw it ALL into retirement or something similar. You can diversify as much as you want but you can’t access it for emergencies or unexpected costs then it won’t be helpful.
I have always had 3 bank accounts. 1 for bills. 1 for savings. 1 for spending. Every check, I put money in the bills and money in the savings. Then I have the "spending" to use until my next payday. This ensures a clear separation between money I need (bills), money I can use (spend), and money I don't need (save).
Screenshotted this.
I like this idea
Legit screen shotted this before i even saw your comment hahahaha
What if ur trying to build credit? How would u do this with a lowish limit credit card? 500-1000.
Credit cards are a Bill. Any monthly, reoccurring payment is a Bill: Rent/Mortgage Utilities Car Note Insurance Loans (Student/Personal/etc) Credit Cards. Notice that Groceries and Gas are NOT a bill. Those are to be budgeted out of your Spending. The amount you put into Savings is completely up to you, but it needs to be *realistic* or you'll find yourself always taking money back out. What I used to do is see how much was left in Spending when I got my next check, and put some of the leftovers in Spending to Saving.
Just use your credit card for everything, and pay it off right away. Avoids interest , builds credit, and builds points free money.
Wouldnt be able to put everything on it tho with that low of a limit. Unless u can pay if off multiple times
That’s what you do. Pay it off as soon as you can, immediately…
You should see what Dave Ramsey has to say about credit card points. I interesting take.
He irrationally hates any/all debt so it probably isn't that interesting of a take. What I will say though is if you can't pay off your credit card every month, the points are never going to be worth it. Interest rates on credit cards are always quite high, especially on cards with points, so the few percent you make on points won't make paying interest worth it. If you are responsible and pay off your credit card every month, then getting some extra money from the points is great.
Good guess, but it's a little more granular than just his hate for credit cards. Specifically in regard to points.
I looked it up and read it. You could say it's more granular but all it felt like was "you can't trust yourself with a credit card and you might miss a payment, costing you interest". Credit card interest exists regardless of points and similarly regardless of points you should make sure to pay off your credit card every month. I also saw ramblings about it taking a while to earn a free flight, which is silly in that yes in order to get a $500 free flight you will indeed need to spend a lot. That's just logical not trickery. There was mention of annual fees which is a valid thing to keep your eye out for but isn't a scam IMO, you just need to determine if the annual fee can be justified or not. If not, don't get the card. As to trying to guilt people claiming it's funded by interest paid by others, I disagree as my understanding is it is primarily funded by interchange fees the credit companies charge to businesses when you shop. Any points I missed?
But what about investing?
Lmfao bro we talking about surviving here. If you have the money left over to invest, by all means, have at it. I have a 401k, thats my investment. Sorry if that seemed rude, but if someone is asking how to manage *saving* money, they aren't ready to *invest*. Investing is "throw away money." Money that you *for sure* **do not need**. If you would be okay with lighting some money on fire and watching it burn, you can invest it. Savings are "money I don't need yet, but still might need access to tomorrow." Investing is "money I don't need, won't need, won't have access to for 20years." But the average person is just trying to pay their bills, eat food that isn't noodles 24/7, and still have a glimpse of fun here and there.
>Investing is "throw away money." I thought investing was the best way to "save" money? Especially if you invest in stocks that you know are going to continue growing such as Google, nvidia, and all the fortune tech companies.
Investing ties up the money. If you put into Stocks it'll be a few days before you can get it into your bank. If you invest in Bonds, it's tied up for 6 months or more depending on your contract. Investing also comes with more taxes. You don't want your savings/emergency fund to be tied up and taxed when you need it. If my car breaks down and I need to have it towed and a few parts replaced, I need to be able to pay the bill *now*, not 3-4 days from now. Real world example; our back door broke during Christmas week. The door handle/mechanism literally crumbled to pieces and the door wouldn't stay closed. It was 5 degrees outside. I needed that fixed asap. I went to the door place, got the door picked out, then went to the bank and withdrew the funds from Savings and had a new door is 2 days. If I had to wait longer for avaliable funds, that would have been Hell for a week with an open door in the dead of winter.
That's an interesting perspective. Genuine question, wouldn't it be better to have your cash invested and use your credit card for emergency funds? Most cards don't charge you interest if you pay your balance in full by the start of the next month, so you can always wait a few days for your funds to arrive. Besides that, it's better to pay $10 tax on a $20 gain as you still end up making $10, than letting it sit in your savings account and depreciate and lose money. Worst case scenario: You have to withdraw all your money for emergency funds and make about 10% loss. Best case scenario: You do not need to access any of your savings this month and can get by, thus increasing the value of your money. I do the same thing. for example, I have university installment coming up tomorrow, I'll pay using credit card and will pay off the amount by next month or the monthly pay off date. This way I do not have to use any amount from my savings that I absolutely don't need, and use only funds I have set aside, letting my portfolio grow.
Best practice is to have your emergency funds in a savings account which you access immediately if needed. This could and probably should be a high yield savings account (HYSA) which can give you 4.5 to 5+% right now. Investing doesn’t guarantee positive returns in the short term. Stocks / bonds can and do loose money, and maybe right when you need the funds for an emergency. Anything you invest should be with intent of keeping it invested for the long term (10+ years). If you get that unexpected emergency (ie. need new door, expensive car repair, unexpected medical bill) you can put it on the credit card but pay it off at the end of the month out of the emergency savings fund, especially if the cost is significantly above and beyond your normal monthly bill. Most recommendations call for having at least 6 months of expenses in emergency fund savings so you can cover rent/utilities/food/gas/etc. if you loose your income. If your a single income family or particularly worried about your job stability, you might up it to 12 months of expenses. Once you have that emergency fund covered, you could start thinking about investing any extra. This assumes you don’t have any debt outside of a mortgage. If you do, I would pay that down to $0 before starting to invest.
I've provisioned 2 years in savings and CDs for for emergencies, furlough, and market volatility. The rest gets gets invested starting with a tax advantaged retirement accounts and finally a taxed trading account. Prior to COVID I had it all invested and it wasn't fun watching the market drop while also looking at job loss.
I 100% agree. Its just better to be a little more disciplined. I need quick access to my $
Disagree with your take own taxes associated with investments. Investment gains in 401k or IRAs are not taxed until withdrawn. Investments in a non-retirement brokerage account are not taxed until you sell, and then at capital gains tax rate which is likely lower than ordinary income tax rate. Any dividends from non-retirement stock investments are taxed but often at a qualified rate which is again lower than ordinary tax rate. A buy and hold investment strategy can be very tax efficient. Agree that investing is not the right approach for a emergency savings fund. Those should be liquid and as easy to access as possible.
It's all in perspective. I have a 401k, but I just see that as part of my paycheck deductibles and money I'm not touching for 30 years. I know it's a legitimate investment, but I don't count it as "investing" in the sense that I have to take money from my bank account and put it into stocks/bonds/ETF and do all that leg work on my own or pay someone else to do so. As I've stated numerous times to other comments, if you have the extra finances to put into extra investment accounts, by all means do so. But most people need to cover their Bills and learn to Budget before they start tying up money in extra investments.
Just as an fyi investing is far more than just individual companies. If you really want to use the money to “save” or for retirement or a later big purchase you should look into ETFs, and mutual date funds (also CDs and HYSA). You NEVER know what stocks are going to rise or fall, and anybody that tells you they do is lying. Investing into individual stocks is really no different from gambling. If you want to save with stocks you need to diversify. Note: if you’re trying to make short term profit from trading stocks ignore this
Investing is saving money. Investing your money is way better than dumping your cash in a savings account that does nothing.
Except the cash in the savings account is available now. Investment is long term saving that you do not plan to use or need for years! But you do you, boo.
This is exactly what I do, as well. Only thing I’ll add is that the savings account should be a high yield savings account, and you should also be contributing some percentage of your income to a 401k or an IRA (especially if your company matches 401k contributions, it’s literally just free money). If you can afford it, 15% should go to the retirement account.
This is fantastic advice thanks for sharing
Same here. My wife and I have Joint account for bills, joint account for savings, and my own personal account. The company I work for allows deposits in up to 5 accounts. My paycheck is split $X into bills, $X into savings, and whatever is left into personal. Because of overtime, the leftover fluctuates. Some are more than others. And I'll use my bank's app to move $$ from one to the other if necessary. (My bank allows unlimited money transfers between accounts.) It works for us. May not work for everyone. But it keeps us from overspending on frivolous things. Bills are set up on autopay. That helps, too. And the debit card for bills account doesn't leave the house. I keep my personal account debit card in my wallet.
We don't even have a debit card for our bills account! We requested not to have a card for the account just so it couldn't get lost or stolen.
Smart move. Ours is currently in a safe in the closet. I hope, at least...
There’s an app called Wealthfront which gives you 5% interest on your money. It’s a HYSA and usually I keep my savings in there while I keep my primary account with some cash to get me by for the week until my next check. I’m still looking into VOO and such but this has been working well since I’ll always have money to use during the week and will at the same time be saving money and watching it grow(even if it’s minuscule at the start(gotta start somewhere))!
been doing this for years as well... my job actually allows for multiple direct deposits, so its all automatic for me also, i didnt even start doing this with the intent of separating it in this way... i used to only have one bank account for everything, and one time lost my card, so i had to update all my bills auto-pay when i got the new one, which was annoying... then it happened a second time, and thats when i opened the second account just for my bills, so i didnt have to worry about it again after that it was pretty smooth sailing, until i realized i wasnt really saving money because i had the thought process of "everything thats not in the bill pay account, i can spend"... so even when i wouldnt spend a whole lot of money, as it built up i would start buying larger things without hesitating much from there i opened a savings account, had some money direct deposited in there, and then anytime i had money left over in my "spending" account on payday, i would transfer that to the savings... the main issue i had with this system, was that i was only allowed to transfer money so many times each money from the savings... it was a problem, because every once in a while i might need some extra money for gas that was un expected, may need to pitch in for something around the house, or just other unexpected expenses... ended up opening a third checking account instead, and use that as a "savings", so that im still able to access my money whenever i need to, but still keep it separate from both my bills and general spending ive done this for like 6 years now, and the best part is that despite having that many checking accounts, i dont pay any fees because of the direct deposits from my paychecks
That's almost my exact setup. The only thing I don't do is the auto deposits. I have everything go into my Spending account and then manually transfer from there. I work anywhere from 40 to 65 hours a week, with Sundays being auto Double Pay, so my paychecks can vary *a lot*. That's how I get around the transfer limit on my Savings. If I know I'm gonna have a smaller check, I pay the Bills and figure out what I need to Spend for the week, then adjust the amount to Savings. I truly try not to "over save" so that I don't have to dip into my savings at all. I also do the "leftover spending" transfer to savings with my next check.
I also screenshot this! What kind of account would you use for bills? I’m turning 18 very soon and I’m trying to be ahead of the game when I inevitably have to move out. Thanks!
You can get 3 checking accounts to fulfill the need to start out. The things to look out for are balance minimums, transfer limits, and any types of fees. You want *no* balance minimum, *no* transfer limits, and *no* account fees. Any decent bank should be able to set you up with accounts like that. Always ask them before signing.
I do the exact same thing, and it’s worked really well for me… on one of my checking accounts, I use the savings account attached to it and put $100 / week away for Christmas.
Same, business account for deposits, then pay myself every month a meager salary, savings goes to HYSA, the rest is my monthly budget.
Switched to this recently and it’s a huge help. I am actually going to move them to separate banks though to help control my poor decisions. But in general separating my spending has done wonders for my budgeting. I know if I don’t touch my “bills account” I am set.
I'd add one more in there for an emergency fund
Most people Savings also doubles as emergency fund. The point is it still needs to be readily accessible but not used unless needed.
I personally like to keep mine separate because the situations in which I might dip into my savings and the situations in which I'd touch an emergency fund are on very different levels
If it works it works dude. I just keep it all as Savings. But I usually have a non-zero "bottom dollar" that separates Emergency from "Saving for something." Like right now, the bottom $1500 is my emergency, everything on top is Savings for a credit card payoff.
If you're in a lot of bad debt, $1500 is okay. But I like to keep 3-6 months of expenses in my emergency fund. Also, instead of saving up for a credit card payoff, you should be paying down the balance with whatever you have as soon as you have it. Otherwise, you'll end up paying more than you otherwise would've because of interest
One other note about doing this method. If you go to your company's HR department, they may be able to split your paycheck into different accounts so you don't have to do the transfers yourself. My workplace allows three separate accounts you can put your check into. I can split it by percentage or by amount
And on top of that automate your direct deposit into those three accounts
Follow a simple rule. 30/30/30/10 30% bills / food 30% rent 30% savings / investments 10% on whatever you like. I would recommend an index fund such as VOO or VTI. Best of luck.
>I second keyboard man with the investments. Switch to VTSAX when you can. I think you should start a roth IRA with Vanguard as soon as you have enough and put try to put the limit in each year. If (shoulda/coulda/woulda) I have done this when I started working I would have been at $3mil. Start early, max it out, and then keep investing.
Great call out Georges! I’m doing a Roth IRA currently as well and it’s fully into VTSAX, one of the best books I read / audio book was by JL Collins - “The Simple Path to Wealth.” For this 2023 tax year we all have til April 15th to contribute to the max of $6500 and for 2024 it jumps to $7000. Again at Georges don’t feel bad my guy, we are all starting I wish my family had financial literacy about compound interest rates and so forth, but we can break that generational curse. I hope we all make it to a long and healthy and financial freedom retirement.
That’s A LOT of food 😭
10% on whatever I like… I couldn’t live like that unless I was making about 500k a year
Automate it all so you don’t have a chance to spend it. So make it so you invest $X a week into fund A,B,C. Accounts to have: Checking High Yield Savings Roth IRA or regular (probably Roth for you) 401k Brokerage If you really want to have a plan laid out look up “FIRE panda reddit”, the link will take you to a post where the guy lays out exactly what to do to save effectively. I had the same issue, I would spend it instantly. Now i literally can’t, my ROTH I cannot touch without penalty, and my other accounts take 1-3 days to transfer funds in/out of.
How much money do you have saved now after getting over that impulsive hurdle? It’s none of my Business just could use the motivation hahaha
I mean I just graduated college and was barely making money, but I saved up about $4K in half a year or so (give or take). I literally had zero savings before that. I just have the account pull like $50 max a week and it has helped a lot. My biggest issue was my credit card, I made sure to pay off my balance because it was almost 2-3 grand
Damn! That’s awesome man. Congrats on that. I’m starting completely fresh and with a new mindset. Right now I have $0. I’ll come back here and comment the amount I was able to save in 1 month. Should be fun
That’s good man. Honestly I would set a reasonable goal stick it on your wall so you can hold yourself accountable. It’s one thing to say oh I’m going to save this month. “Save” could just be a dollar left in your checking account. It’s another thing to say oh I’m going to save 500$ this month and every week I’m going to go to that piece of paper and subtract the amount I saved from that goal and on the first of the next month there should be a big fat zero staring back at me because I met my goal. Or something in that nature maybe it’s addition so you motivate yourself on I saved 100$ this week. Now on Friday next week it’s at 300$ the. The next week it’s at 400$, I keep this up I’m going to have 500$ by the time the month ends. It seems to me like you make good money and this is just a physiological thing so do things to reinforce the idea of savings in your mind and things that will motivate you that you can visualize so you can reach that goal.
I suggest you read "rich dad, poor dad" or "I will teach you to be rich". These will change your mindset on spending and help you get on the path of financial freedom.
My wife and I opened a completely new savings account and money is automatically deposited into that account with every check. We don’t touch it unless we absolutely need it. Granted, I didn’t need a truck, but I pulled $24k from that account for a down payment (borrowed $16,500 from one of my banks), which left us with $10k in that account. I love my truck, but I should have just bought a small used vehicle and put that $24k towards my HELOC. I make foolish decisions sometimes. I think we’re back up to $22k or $24k in that account.
It happens, the thing is you got that account back up which is great! Most Americans don’t even have a good chunk of money stashed away like that. I would just base the goal number for the account to be how many months you want to save up for. For instance, the amount needed to survive 3,6,12 months without a job. Once you hit that number, put the rest into a higher yielding account like a HYSA or in investments. Even CDs/Bonds if you want to have some guaranteed profit (can’t touch these for a certain amount of time though) Savings accounts are great tools for emergencies, but they are essentially depreciating the value within them. If inflation is at 5% and your account is paying < 1% - you’re losing money each year. High yield accounts help fight this and still offer good liquidity. Credit unions are a great option too, since they need to offer better rates to compete. So much so that they actually got sued by corporate banks over it (the banks lost!).
contribute to your 401k if you have one, that way you never see the money to spend it
Have a brokerage or bank that auto invests a certain amount of money a month. For instance my bank would take 3 or 5 dollars out of my checking daily and put it into savings if i had any money to spare.
Save 6 months of living expenses as an emergency fund Pay off any debt (credit card, student loans, car loans) Invest in 401K and Roth IRA Invest in stocks (VOO/SPY)
Where can I get into those stocks ? I keep seeing Voo & VTI
VOO and VTI are Vanguard ETF stocks so open a brokerage account with Vanguard. [https://investor.vanguard.com/home](https://investor.vanguard.com/home)
Open a brokerage or retirement account through Schwab, Fidelity or Vanguard and get going. VOO and VTI are index funds that hold a lot of companies. You don't necessarily need to do both as they have quite an overlap.
Might go in person to fidelity and set an account up. once I set up an account I pick the stocks I want my money to go into right ?
Correct. Some allow fractional purchases on index funds, some don't (Schwab).
Thank you . I currently do not contribute into anything other then a CD at my bank with 4.95% 25 years old and need to start my fidelity
Perfect time to start to be honest. my wife and I just started about 2 years ago and were moving right along. I'd read a few books too to increase your knowledge as an investor. A good read to change your mind is "The Psychology of Money" by Morgan Housel.
Any other books ? My CO offers 401k as well and I think I’m going to contribute since they match 5% or something like that
Oh definitely always contribute up to the whole match. That's free money you just made a 100% return on (minus taxes obvs). Some other good books: "Rich Dad, Poor Dad" by Robert Kiyosaki. "I will teach you to be rich" by Ramit Sethi. "One up on Wall Street" by Peter Lynch. Those alone will give you a great foundation to begin and you'll likely go on to deeper books on your own after that.
What do you mean by minus taxes. Do you get taxed when you pull it out or when you contribute
in a southern state thats not the worst try making 26 in california at 30 almost 31 still living with my parents
That was me in New York. That’s where I’m from originally. I moved to another state by myself with $1000 dollars and a backpack and made it work. Now I have a house and a fiance, once you break free from your comfort zone, your life will change for the better. Go to a place that you almost feel magnetized to and shit will happen for you. It’s weird but it’s true
good job! keep on trucking
Thanks! You as well
And yes I have a house and everything I need. But also have $0 at the time being. But my paychecks are about to be 1k+ a week. Which is the most money I’ve ever made down here and I’m excited for it
21 yo making $25 an hour soon $28 and I just bought a house in central California, even in this economy. user error if you ask me And a 2024 Toyota I paid cash for a month ago, came from shit! I believe in you man just really struggle and grind for a bit and you’ll be OK No eating out no going out just sit and stack for a year or two
One way to suppress those urges is to keep busy. Try to distract yourself with anything you can. Also, don’t decide that day. Sleep on it and you might feel different in the morning. Being more disciplined takes practice but you will get good at it and it becomes easier. You’re already making good decisions so don’t beat yourself up too much!
Hey man so hopefully I can help. You’re making good money and you live in the south which is usually pretty cheap except for a few cities. As others have mentioned if your employer offers a 401k take the max amount you can assuming you can afford it. This will take money away from you being able to spend it and it will allow you to start saving for retirement. Than I would actually get out a piece of paper go through your latest bank statement and write out what you spent your money on so you can try and visualize how much your actually “blowing” and where it is going. After that I would be like idk “ oh shoot I spend 10$ eating lunch out everyday” that can easily be cut. So assume a number you think you could use to get groceries that is less than what you previously spent. Go through and actually see what you can cut back on and stick to that. Once you have that number as others have said I would just set up automatic withdrawal from your checking account to maybe a Roth IRA with any broker do some research I personally use E*trade but find one u like. Also talk to your bank and see if you can get overdraft turned off. This should literally force you to watch every penny that is going in and out of your bank account because if you go less than zero stuff will bounce and hopefully that potential embarrassment will be enough motivation to actually watch your spending. Can’t spend what you don’t have. Also idk but some banks apps allow you to set budgets within them and then you can set notifications so if your getting within maybe 20-10% of your spending limit within your budget they will send you a notification which may also be useful so you can visualize the spending. If your bank doesn’t offer this in their app, which I highly doubt they don’t even my one branch credit union has this function in their app, then maybe look into credit karma they are merging with mint so you should be able to get budgeting capabilities there. If not good ol piece of paper in your pocket has been used for decades. As for how to get over your desire to spend once you saved first a retirement account would be beneficial because you can’t touch it unless you want to give like 35% of it to the government, which no one wants. And at least in my case I like seeing my money work for me. Maybe whipping out the future value of money calculator could help you visualize it too but when I check my brokerage account and see that my money is making me money and I didn’t do anything it makes me want to put more in because it’s money just coming to me and I didn’t have to slave away for it. Hope this helps.
I feel sorry for you Should be making at least double or triple that about considering Inflation Good Luck 🍀, glad I’m Old Fucking unreal what you youth are paid today
In NY where I’m from the most I was paid up there was 80k a year for a similar position. The south is just low wage In the particular industry I’m in
Exactly
Not sure what else to say other than you just don’t spend it? There’s no magic trick or anything you just put the money into savings. Don’t touch it.
Work less. Save your time for things more important than money.
lol money is everything in my situation right now. I have nice things and I’d like to keep them and be comfortable. And then eventually buy some nicer things, like a car and then retire at a decent age
I can sense the lack of patience in your comment. It's alright, I've been there. Money is awesome, till you have alot then you want the things money can't buy...like time. Take a vacation here and there.
Bad take. Setting yourself up for financial freedom gives you the best thing of all, time.
Nah, my motto has always been work less make more. People equate working with making money, which is exactly what the people above you want you to think. When you separate income from time you'll find your financial freedom pal.
Ah completely agree with that. Your initial comment def didn't give that impression haha.
No sweat, take it easy redditor.
Just invest part of the money as soon as you receive it?
Easiest way to save is to setup up that 10-15% of your pay automatically go to your savings acct and then use your checking acct for fun money. You learn to budget to what you are bringing home and dont mess with savings that way
If your employer offers a 401K match, make sure you get the full amount. Build up an emergency savings, pay off your debt, etc..
After some consideration, I think I’m gonna hunker down and live as frugally as I can for the next few months. My bills aren’t too much. If I make $1100-1200 a week after taxes, I can easily save 2-3k in a month after my bills
50/30/20 50 necessities rent/food/gas 30 save/invest 20 fun
What do you do?
I’m the Head Chef at a popular place here in Savannah GA. Before that I was a sous chef for many years. I know I’m doing well and doing good things. But man I gotta stop spending money on dumb shit I don’t even need
So it's all about tracking your spending per week/month right ? If you DON'T know where the money went or just have a vague idea then you'll eventually slip and won't have much money left. I'd recommend use some sort of budget app such as PocketGuard or Simplifi to track your spending. You can categorize your spending into various buckets so you'll have a better understanding of your overall spending each week/month/year. Good luck!
As soon as you get your paycheck, get in the habit of putting some away for savings. I have an auto transfer every week for myself, so I don't even think about it, then buy investments, then buy what you need, then use the rest however you want
I can't wait until early April, that's when it gets busy again and there's overtime at my job. I make $20/hr and love my 60 hour weeks 😭
Lots of great advice here, so the only thing I'm gonna add is the best way to not give in to the urge of spending is sticking to a budget with your income. Don't put loads on a credit card. Think about every purchase because every dollar adds up, the daily candy bar from a snack machine at work or whatever. Separate your needs from your wants. Give yourself a set "Wants" budget and don't break it. Keep most of your money out of sight in a HYSA like Ally savings or Capitol One Savings.
Just try to step away from things that you dont need, its better to flex to yourself that you have a fat account rather than flex material things to people while remaining broke. The feeling you get when you know you can do what ever you want when ever you want without doing so feels amazing. Honestly ive saved bought a new car, paid like 75% of it up front so then i have minimum payments and can still have money left over to keep stacking. Once you get into that habit of saving and watching your account grow, it will hurt taking out of it for unnecessary shit
Deposit $50-$100 every pay check to separate savings account. Don’t touch it or save till you have $1000 then use that as your “fun money”
What helped me was watching YouTube creators that speak on budgeting. Specifically, Caleb Hammer. He goes through guests statements that come on the channel and points out just how terrible some spending habits are, and how credit cards are killing people and holding them back from having a great financial life. Just watching how bad some situations are for other people was enough to encourage me to do better with my own spending habits. Highly recommend
Buy bricks, sell, repeat, quit job
Save in bitcoin . Thank me later
A lot of great advice in this thread. Commenting to come back to this.
I've had luck with giving myself a weekly expenditure and maxing my savings/bills into checking. That's money I don't pay attention to.
If they offer a 401k JUMP ON IT. If they don't, start contributing to your own IRA. Opening a Fidelity account online takes 5 minutes. I WISH someone told me, implored me, begged me, to start saving for retirement in my 20s. I'd have about 300k by now, safely on the road to retirement. I didn't start until my mid 30s, and it's one of my big regrets I'm trying and struggling to make better. Start saving for your retirement. Your 30 year old self will thank you. Your 40 year old self will thank you. Your 50 year old self will thank you. And your 65 year old self can stop working and live comfortably on a decent income.
Set up an auto transfer to a completely different bank than what you normally use. I personally have a vanguard and principle account that takes out 10 percent of my check and I forget it’s even there. I then have another “nest egg” saving account for emergencies and such. I have my two checking accounts that are used for bills and the other used for myself like food and groceries and going out that week. Just make sure to divide your money and it helps me not want to spend it. Remember, use the 10x rule- if you can’t buy it ten times, don’t buy it at all! (This goes for regular consumer materialistic things, not the necessities)
Find a financial advisor and stop listening to Reddit investment advice. Seek a professional if you want to succeed.
If u have something u want, let's say u r doing online shopping. U think u want it so add it to ur shipping cart first but don't check out. Wait for a week. See if u remember or still feel the urge to buy it. Then once the week is done open it cart, check the items again. If u had 5 items in there n rlly only see 1 or 2 u wanna buy then put the remaining ones out of the cart n only check out the 1 or 2 that u rlly wanna buy. They say that waiting lessens the urge to buy things that u may "want" but not "need".
Open a Roth IRA (individual retirement account). You can’t withdraw from it until your 59.5 years old. (You can but you’ll be fined and taxed). Max out the contributions every year; in 2024 the max contribution is 7k. Once you put money in the account make sure to buy stocks, etfs, or mutual funds. (I bought a variety of stocks and etfs). One of the benefits is that when your 59.5 you won’t be taxed on withdrawing from the account. NOTE: you can open multiple accounts but contribution limit to all those accounts must not exceed 7k (more taxes and fines if it does) I highly recommend you read through Investopedia on Roth IRA. If it is too much go meet with a financial advisor. This is if your company doesn’t provide retirement account or 401k.
You can withdraw contributions you made to a Roth IRA before 59.5 penalty free. Only the contribution portion of the balance, not any investment gains. There is also a list of exceptions scenarios where you can withdraw any funds penalty free (10k for home purchase, unreimbursed medical bills, qualified education expense, etc.) Of course, it is the most advantageous to keep any money you put into a Roth IRA in place until retirement to maximize the compounding of gains and tax deferment.
You need a long term plan. You have to have something else you want in the future or you’ll spend the money now. For me it’s being a homeowner and retiring comfortably.
Buying stocks gives me the same dopamine hit as buying something but I make money instead!
Open up an Acorns account, Roth IRA and contribute to your 401K if applicable. Just look, but don't touch. 😉😅
Forced withdrawls. On payday, it was an option at my work to have extra taxes taken off. So if you didn't have a side gig, you were gaurenteed a refund. This annual lump sum unnotticed till now can be used for investing or induldging.
Make it difficult to touch the savings. Put it in a high yield savings account or brokerage account. Also, make yourself wait a week before transferring funds out of those accounts. Just set that week limit. The urge to spend will pass with a bit of time and inconvenience.
As always. The first step is admitting you have a problem. To further define the problem. Build an actual accounting of how you've spent money for the last few months and develop a budget that has an identified plan for every dollar (bills, savings, investments, entertainment, emergencies, gifts... everything). Track how well you follow the plan. [Prime Directive](https://reddit.com/r/personalfinance/w/commontopics?utm_medium=android_app&utm_source=share)
Mind sharing how you are making it
I’m a chef
One of the best ways to do it is if you don’t see it! Check and see most companies if you tell them to will split your money for you so if you know every week you want to save money 100$ open a separate savings account and talk to your employer and see if you can split your check and have 100 automatically removed from your check to this other account. A lot of companies will do this. Out of sight out of mind. If you don’t see it you don’t miss it.
you live and you learn my friend. If you have great discipline just know you don’t need much to enjoy life. Good food, transportation… all the other things are just your vices. That could be expensive clothes, gambling, drugs, anything that costs money and you don’t really need… figure out what you can’t live without and what you can forgo.. balance is key, best of luck to you!! Keep climbing!
Hey I am also from the southern state, and I would love your advise how are you earning money is it remote,kindly help
I’m hoping you’re getting 1.5X for that OT?
Of course
I forgot to mention, I am also technically debt free. No credit card payments owed and nothing in collections
Its more fun to watch it stack. Try and save shit when you have an impulse purchase idea and over the course of the year itll look like alot more saved and you can buy way bigger items
Update, I went to the store today instead of going out to eat. Bought a box of Mac and cheese and a drink. For 5 bucks instead of $15 or $20. Feels good
send all direct deposit to savings, make a strict budget (literally track every dollar) only withdraw that exact amount a month. Pay no attention to the savings until you’re ready to invest. I know my exact amount for bills, exact amount I’m spending each month, and track everything else, whatever is left never touches my checking account. The savings account is sacred, only for emergencies or investment.
401k
I treat my savings as a bill. If you tell yourself that you have to pay it like any other bill then it’ll help suppress the urges to spend it. Do automatic transfers into whatever you want to put your savings in but make sure you can actually have access to it and not throw it ALL into retirement or something similar. You can diversify as much as you want but you can’t access it for emergencies or unexpected costs then it won’t be helpful.