Post # 1
DH and I don’t have any debt. In fact, we never have, and always pay down our cc every month, no student loans, etc. But we haven’t been very good about moving past this stage. What should we do now? How do we take our saving to the next level?
How do you set goals for yourself once you get out of debt?
What strategies do you use to avoid getting comfortable as your income grows with spending more?
How do you save money?
Do you budget? How do you stick to it?
And do you have seperate physical accounts for different saving funds? E.g. house, vs. baby, vs. vacation? Or do you track it and line item it in excel or quickbooks?
We can’t seem to ever have more than 10k in savings, so how do you get out of a savings rut?
Post # 3
@justelope: Good position to be in 🙂
My boyfriend used to be an accountant, so it definitely helps. We have different accounts for different savings goals. In fact, I set up a new savings account today for laser eye surgery.
Do you have long-term plans? We do. Do you have any trips you want to save for? A college fund for the future kid?
I think it really comes down to figuring out what you want out of life. Are you set to retire at the age you want to? Do you have pensions? Etc.
Post # 4
See a financial planner who will help you develop a plan that you can live with.
Pay yourself first.
Set up automatic deductions or transfers from your main account to your retirement funds etc.
It’s much easier not to spend money that doesn’t sit in your checking account.
Post # 5
I can’t stop recommending the book Total Money Makeover by Dave Ramsey. He teaches you how to budget and how to tell your money where to go before you spend it – as opposed to finding out where it went after it’s gone.
I would suggest you start tracking your expenses first. See where you spend your money. Then, figure out ways where you can cut back.
What do you spend money on that you don’t need?
What can you cut back on?
Do you have a new car that you can sell and buy an older car?
Do you drive a lot when you can walk places to save on gas?
Perhaps you can food shop with coupons more often?
I’m not really sure what your expenses are, but I can say I cut back a lot by doing my own nails, my own hair, not buying any new clothes for a while (or buying things only on sale, from Marshalls, etc).
Also, consider opening just a savings account somewhere and putting $X in there every paycheck, no matter what. That will force you to save and force you to cut back somewhere else.
Without really knowing what you spend money on, it will be really hard to give you advice, but I suggest picking up that book. Even better, go to B&N and read it there without buying it — already saving money! 🙂
Post # 6
We try to take money out of our accounts for saving before we even see it. So our 401ks are obviously taken out of our paychecks and are forced savings. We also commit to saving our IRAs each year. Beyond that…we set goals and have dreams (e.g. our delayed honeymoon!). We’d likely do better if we had a budget, but we don’t.
Post # 7
Wow, a bunch of great recommendations! I think I am going to go ahead and talk to DH about going over our budgets, as well as opening accounts for certain goals.
I already dye my own hair, paint my own nails, buy my clothes at the thrift store, and am super cheap on a bunch of fronts. But I know I can cut back on eating out (I’m trying!). I’m a grad student, work an extra job, and DH works, but we know we need to take our savings to the next level. Being in school has def crimped our savings.
Since DH is self employed, we have been bad about putting money away for retirement since we often had to live on savings for dry spells. Keeping liquid assets was super important, but this year we are definately going to make contributions.
We also have enough with gifts from the wedding and family to trade in to buy a new car (we need to replace DH’s). We want to keep it under 20k, good MPG, low maintenance vehicle , but we are trying to decide if it is worth purchasing outright if it takes our savings down to about 5-7k.
Lots to think about. Thanks ladies!
Post # 8
I like having an ING savings account. I take money out right after I get my paycheck, it is automatically deducted. I can transfer teh money back to my savings and spendable funds within a few days, but not so fast that I can just easily spend it. I find that if you stat small ($25/paycheck) and bump it up, you really don’t notice not having/seeing the money in your account. I’m always surprised how much I manage to save without thinking about it.
Post # 9
I set an annual goal of 20k. Once I hit that goal, I don’t make myself save more. On January 1 of every year, I take any leftovers from my checking acount and stick it in my savings account. I guess it is a variation of “pay yourself first.” I also own a home that is worth quite a bit and likely to appreciate at some point, so I’m investing in myself when i pay my mortgage which helps.
FI got laid off and is now working as a waiter, so money is short. I pay for our expenses and he pays for our dinners out. We make it work.
Post # 10
@justelope: I would recommend a Hyundai Elantra for a car with the specs you listed. Such good gas mileage! Amazing warranty, they are really slick looking, etc. We just paid cash for a brand new one, and got the GLS model (plus floor mats and iPod cable) for $16,800. We looooove it! My dad has had two Elantras, both lasted to almost 180,000 miles before major repairs, and my mom is on her second Hyundai Accent with the same experience!
We are in the same debt boat as you – no debt. We save just be being frugal on a daily basis (only eat out 2-3 times/month, make coffee at home, only clothes shop to replace worn out items, take public transit to work, bike places in town to save on gas etc etc). Honestly, our budget is just “don’t go crazy” and then the rest gets transferred over to a savings account at the end of the month. I think it’s easier, since we are both out of school and have good jobs/salaries, so we aren’t cutting anything close with our monthly income/budget.
Post # 11
Save for retirement! I see so many people in their 50s and 60s that haven’t and will be completely screwed when they retire, *IF* they retire!
Also, keep a healthy savings.
Post # 12
We have an automatic withdrawl to put money into our savings – we actually have two savings accounts. One is an account we will never touch (we call it our rainy day account becuse the money covers 6 months of mortgage,bills, and car payments god forbid anything happen and we can’t work.)
The other savings is a general savings that we have for random home repairs that may come up, vacations, etc.
At this point the rainy day account is complete, so we just focus on our general savings.
This of course does not include our 401K, which at this point, since we are 28, is our only savings for retirement. Once we get into our mid 30s we will create another savings plan for additional retirement money, which again will be seperate from the others.
Post # 13
I work in the financial industry to preface. I would say the next step is a house. Interest rates are so low right now and housing prices are down so now is a perfect time to purchase. If you aren’t thinking about a house, you should lock up your savings in a conservative bond type mutual fund for a year or more. You should also open a ROTH IRA and begin saving for retirement. I have my percentage of my paycheck go to my 401(k) and the rest in my savings and from their I pay bills and mortgage, allocate money to my ROTH IRA to automatically go out every month and then whatever is left I usually save or spend.
Post # 14
@futuremrsk18: Also, consider opening just a savings account somewhere and putting $X in there every paycheck, no matter what. That will force you to save and force you to cut back somewhere else.
I’m gonna chime in here and say this is probably what saved me when I was struggling with money. When I first finished uni, I had basically nothing in the bank, and only a part-time job on minimum wage. After drawing up a pretty harsh budget (i.e. no room for frivolous spending), I decided I could set aside $100 a week in a savings account, after 6 months of this, I had $2600 in “emergency” funds that I could fall back on if I ever needed it, and was able to loosen up the budget slightly.
Since then, I’ve gotten better, higher paying jobs, but I’ve still kept that mentality of putting aside at least X amount each week. It’s paid off, because that was 2009 when I had no money at all, and I’m now just a little over $20,000.
Also, I wouldn’t recommend dividing up your savings accounts too much – banks will pay higher interest if you have more money in a single account! Sure interest doesn’t seem like much when there’s not much money in the account, but 5% interest looks heaps nicer when it’s being paid on $10,000 as opposed to $1,000.
Good luck, and congratulations on staying out of debt!! Just stick with it, and I’m sure you’ll go a long way
Post # 15
First make sure you are contributing as much as you can to a 401k (especially if your employer matches contributions) or an IRA. Once you’ve got that covered I recommend opening a separate savings account -preferably at a separate bank, I’d recommend something like an ING or HSBC online savings account, because they pay some interest. You should make a realistic budget and determine how much you want to save. Then setup an automatic transfer monthly to the savings account and don’t touch it unless there is an emergency or a big purchase (like a house or a car). You’ll be surprised how fast the balance will grow!
Also, I only buy used cars, you can get a great deal on reliable low-mileage used cars like Hondas and Toyotas. My current car was 2 years old and had 16,000 miles when I purchased it 4 years ago, I paid about $7k less than a new one, and it hasn’t had any problems at all. I also recommend checking the rates on car loans from a credit union before you go car shopping, sometimes dealers offer special financing rates, but it is good to know what your options are before entering the dealership!
Post # 16
@LadyElva: where are you getting 5% interest LOL I haven’t seen rates like that in years!