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Question about putting money away for savings/retirement...

B

BigToque

Lifer
As of today all of my debt is paid off (except for a car loan - although I consider that a biweekly expense rather than debt).

After all my bills are paid off, I've got ~1000/month that I can use for savings/retirement.

Since I've never put money away for savings or retirement before, I'm curious to know how much I should be putting away.

Do I want to make sure I've got enough money in savings to last me 6 months w/o a job and after I've got that much in the bank, then start putting money into RRSP and other investments? Or is it better to put small amounts in each account every paycheque?
 
I'm not sure if it's better to do it all at once or put small amounts of money into different accounts.

In my opinion I would build up your savings to save for 6 months worth of expenses first in a high interest savings account, then slowly start channeling money into retirement accounts - 401k, IRA, and mutual funds are the standard.
 
Originally posted by: BigToque
As of today all of my debt is paid off (except for a car loan - although I consider that a biweekly expense rather than debt).

After all my bills are paid off, I've got ~1000/month that I can use for savings/retirement.

Since I've never put money away for savings or retirement before, I'm curious to know how much I should be putting away.

Do I want to make sure I've got enough money in savings to last me 6 months w/o a job and after I've got that much in the bank, then start putting money into RRSP and other investments? Or is it better to put small amounts in each account every paycheque?
Click to expand...

Had the whole 401k and roth ira prepared then realized the RRSP is a canadian retirement plan, so 401ks and roths don't apply to you non-peoples 😛. But the same logic stands: save as much as you can in your early years for retirement. See if there are retirement check ups from your RRSP provider to see how much you should save to retire when you want.

3-6 months emergency fund is a must if you're on your own and too far from family.

After saving for retirement and still have excess money? Determine if you should pay off the car loan--ie if car loan is 6% and HYMM is 5% you are not making money in the bank--it's losing you money; furthermore, the money you make in the bank is taxed.

Also give us more info, like age and when you want to retire
 
Good for you. The earlier the better, when it comes to saving for retirement. Max out your 401k first before you do it somewhere else.

When I got out of college, I didn't know squat about money management. I read Personal Finance for Dummies, & now I'm all set. 😀
 
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