Tag Archives: budget

Here’s What Saving 1% of Your Paycheck Could Do…

Saving money is difficult. Even saving 1% of your paycheck can be a challenge. However, this percentage can have a huge impact on your ability to retire or become debt-free.

For example, let’s say you are 25 years old, make $40,000 a year today, and never get a pay increase from that salary. 1% of that would be $400 a year / $33.33 a month / $7.69 a week. To save this amount it could mean eating out one less time a week, skipping buying a few articles of clothing a month, skipping one night on the town a month, or many other options.
So, instead of spending that one percent of your paycheck you invest the money in the stock market.
On average the stock market has a return of 8% per year, or 10% if you
reinvest the dividends. Dividends are a sum of money paid regularly (typically quarterly) 1 percent returnby a company to its shareholders out of its profits (or reserves). Assuming you get a 10% return on your investment, by the time you are 65 the 1% you save monthly would be worth roughly $195,000. All from 1% of your paycheck. Continue reading Here’s What Saving 1% of Your Paycheck Could Do…

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How I was able to save 60% of my paycheck (after tax) in a month

I recently set the goal of saving 58% of my paycheck for the month February, and I was able to accomplish that! In fact, 60% of my paycheck stayed after the month ended. It was a pretty great feeling to be able save that much money. I had to change many aspects of my life to accomplish this, but it was not impossible. Continue reading How I was able to save 60% of my paycheck (after tax) in a month

Experiment: Saving 58% of my paycheck for a month

I’ve seen a few posts online about people experimenting with frugal living. Most articles suggest the person should attempt to save 50% of their paychecks for a month. I have always been tempted to try this, but have never done so. Until now! I feel like I do a pretty good job with saving money already – on average saving roughly $1,000 a month. However, I want to save more. That’s what lead me to crunch some numbers to see how much I realistically could save in a month. The number I got was 58% of my income after taxes .

My fixed expenses for a month include:

  • rent
  • student loan payments
  • internet
  • phone
  • gym
  • childcare

Continue reading Experiment: Saving 58% of my paycheck for a month

The WORST 401k mistake Millennials make

It is no secret that when Millennials retire social security is either going to be entirely gone, or drastically different than it is today. This means individual retirement planning is more important than it has been for previous generations. Most companies offer a 401k as one of their benefits. In essence, a 401k plan is a retirement contribution plan where employees can make take a portion from their paycheck and put it in a retirement account on a pre-tax basis. I’m always surprised when I talk to people about their retirement plan, and they don’t understand some of the basic features of their 401k or 403b.

The biggest mistake millennials make when contributing to their 401k plan is NOT TAKING ADVANTAGE OF THEIR EMPLOYEE MATCH PROGRAM. The overwhelming majority of companies offer to match a certain percentage of what you put in. As of 2013, the most common matching program was 100% match for the first 6% you contribute. Meaning if you opt to have 6% of your pay into your 401k plan, the company will match that and add an additional 6% to your plan. Even if the company you work for is not as generous in this realm, another common standard is 50% match for the first 6% you contribute. Continue reading The WORST 401k mistake Millennials make

Why I don’t drink coffee from Starbucks

Millennials and coffee go together like macaroni and cheese. In college I worked at a coffee shop for about three years, and I was constantly amazed at how much people were willing to spend on coffee. Every single day. However, buying coffee from a big coffee chain on a daily basis is a huge waste of money. It doesn’t matter if it’s from Starbucks, Dunkin Donuts, Peet’s, or any other coffee chain. From a financial standpoint coffee is similar to or even more expensive than buying a pack of cigarettes a day.

Let’s do some math. Let’s say on average you spend $5 per coffee, and you get it about 6 times a week. So you spcoffee1yearend $30 a week on coffee. This doesn’t sound like a lot, but it adds up quickly. $30 a week x 52 weeks is $1,560 a year. Ok, so this amount of money won’t make you rich. But what if instead of buying coffee from Starbucks you invested that money, what would that do for your financial future? Continue reading Why I don’t drink coffee from Starbucks