How to save money

[Argo]

I just put my money into 401k. That way, I can't spend that money, even if I want.

 

[NogginBoink]

Edit to kranky's post: contributions to 401K are pre-tax.

Comment on b0mberman's post: there's a "law" in economics that says one's consumption will rise to available income. Ergo, your goal is to limit, artificially if necessary, your available income.

It all boils down to one thing: discipline.

 

[Rudee]

<< Saving money is easier than you think. All you have to do is, like others have said, have it withdrawn directly from your paycheck. But you need to be disciplined enough to let it alone. Check this out - if you save $1250/month in a 401k or other tax-deferred account, if your savings earns only 8% you will be a millionaire in 30 years. If you can leave it alone for 40 years, you'll have OVER $1.8 MILLION dollars. That doesn't even include that you could save even more by getting pay raises during your career. This is very doable at your income level and you have a great opportunity to set yourself up for life by saving early.

>>



The figures of 8% or above for savings is old figures dated back to a decade ago when it was a realistic figure. Today, you won't find rates anywhere near 8%. Most likely half of that if you're lucky

 

[NogginBoink]

<<

<< Saving money is easier than you think. All you have to do is, like others have said, have it withdrawn directly from your paycheck. But you need to be disciplined enough to let it alone. Check this out - if you save $1250/month in a 401k or other tax-deferred account, if your savings earns only 8% you will be a millionaire in 30 years. If you can leave it alone for 40 years, you'll have OVER $1.8 MILLION dollars. That doesn't even include that you could save even more by getting pay raises during your career. This is very doable at your income level and you have a great opportunity to set yourself up for life by saving early.

>>



The figures of 8% or above for savings is old figures dated back to a decade ago when it was a realistic figure. Today, you won't find banks that pay anywhere near 8% for a savings account. >>



No one in their right mind puts their long term savings in a savings account. I'm sure kranky was referring to savings in the stock market, which over time, hisitorically speaking, should get you better than 8% growth annually. (Averaged, of course.)

 

[kranky]

Yes, I was referring to mutual fund investments through a 401K or IRA. I chose a conservative 8% to illustrate that it was well within the realm of probability to amass $1.8 million dollars by age 66 - not a one-in-a-million shot.

 

[911paramedic]

I have a problem with this thread, let me tell you why:

A person that has the brains to earn 65K should have the brains to know how to save money. If you cannot figure that out, you don't deserve the job.

Liviathan has not been back to say thanks for ONE of these ideas. Yet another orphaned thread.

 

[PicPop]

u can save money if you are only making 65k 🙁

 

[Rudee]

<< Yes, I was referring to mutual fund investments through a 401K or IRA. I chose a conservative 8% to illustrate that it was well within the realm of probability to amass $1.8 million dollars by age 66 - not a one-in-a-million shot. >>




Well, by the time you reach 65, inflation will make that 1.8 million dollars the equivelant to 700k. Which at that time, might be 5 years salary.

 

[kranky]

I should have mentioned that I allowed for a 3% inflation rate, so the $1.8 million example is adjusted for inflation. It would be just like having $1.8 million today.