SAVINGS... opinions y'all

[Gomer]

Just wondering how much you folks pay yourselves (savings) from your weekly paychecks. I am adjusting from being dirt poor to not being dirt poor. I know that the first bill I pay each month should be the savings bill, but I am not sure where to set the bar.

So share your thoughts... how much do you squirrel away each paycheck (% or $ amount).

BTW I have no kids, no wife, and few worries =)

[RADAR1797]

5% savings and 10% investment is a decent rule of thumb. Many have varying opinions.

-RADAR

[Theophylact]

I set aside 8% of my pretax salary in the Federal Thrift Fund -- the equivalent of a 401(k). Another $600 after-tax income each pay period (2 weeks) goes into two savings accounts. One of them is mostly to cover the taxes and insurance on our house, the other just general savings.

[Gomer]

Theo: what % or $ of your pay period is going into your general savings?

[Theophylact]

About 8% of my gross salary before deductions to general savings, another 8% to the property tax/insurance account. So with the 8% in the Thrift Fund, that's 24% of income I've elected to set aside. The Government takes 7% for my retirement fund, so 31% of my salary is basically going to savings of one form or another.

(I should point out that I'm on the old Civil Service Retirement System, so I pay into that instead of Social Security. The difference is that there's no earnings cap on my contributions.)

[Brainchild]

What I did when I was single was pay all my bills, and split what was left in half, save half and spend half, of course marriage,and children changes this conciderably

[daveleau]

$100 to Roth IRA for each of us (right now, more later when it is more feasable)
$100 to savings

I would highly suggest a plan that our financial counselor has us on.

--Get $1000 in savings
--Get out of debt completely, including all loans including car and all credit cards, leave the house morgague until last (if you don't you are only borrowing money to invest and your CC and car interest is working against your savings investment...ie you are borrowing money to invest, basically)
--invest in Roth IRAs and mutual funds (few stocks, if any...)

To get out of debt, begin by putting extra money you have towards the smallest debt. Get it out of the way and then the money you were putting towards the smallest should go towards the next smallest. Then once that is gone, the money you put towards the smallest and the next smallest should all go towards the 3rd smallest. This will create a debt snowball which will get you out of debt.

Once you are out of debt, then you will have tons of money to play with. Imagine no car payments, no cc payments. Only your monthly bills, your investments and savings towards fun stuff.

You can be rich and have fun on your EIT salary if you work at it.

Dave

If you want to know more and are military, talk to FirstCommand Financial. If you are not military, try to find Dave Ramsey on the radio. He is a Christian financial counselor that hs the same principles I outlined above and will give you GREAT advice and guidance.

First Command: http://www.firstcommand.com/home/
Dave Ramsey (you can listen to his radio show online): http://www.daveramsey.com/

Congrats on the extra cash flow.

[brandon184]

~

[Richard Cranium]

I suggest from 15-20% of your net pay, and don't touch it.

Now, how and where.. Since the Stock market is so very risky, and the banks are paying a whopping 0.5% on savings, I suggest something different.

US Savings bonds, the EEE's pay some pretty decent rate, I forget it may be 4% or more..

You may diversify in stocks if you wish, just don't put all your eggs into the stock market.. I made a bad move and instead of having 600k in stocks, I now have barely over 100k, bad bad decision on my part.

Main thing is to start NOW and continue, do not remove the funds to buy cars, furniture, pay medical bills etc... savings are to be saved for retirement.. it's easy to listen to the naysayers that "YOU" aren't gonna get old.. don't do it.

If you decide to go stocks for a major portion, I suggest things like Home Depot, Southern Company, Harley Davidson, Wal-Mart etc these are stable companies and seldom have large setbacks.

Examine the stocks p/e ratio [price earnings ratio] it's late and I cannot remember the suggested figure.

Stay away from "Growth" stocks, instead go for ones that pay dividends, always reinvest the dividends.

Also stay away from "commodities" ,, way too unstable to gamble on.. a friend of my Sis' lost almost 1/2 mil on Gold/Silver

Main thing is to put money away and leave it alone.

[Brainchild]

Main thing is to put money away and leave it alone.

That's next to impossible to do.Seems that something always comes up, and I have to use it

I'm lucky though I own everything,house,van, truck,no credit cards,nothing, just food,and utilities. and even at that I can't save money