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) by 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…
Investing in the stock market is an intimidating thing. Many millennials are told to start investing while they are young – this ensures your investments have time to grow over your lifetime. However, just getting started in investing can be extremely difficult.
There are multiple ways to start investing, such as opening/starting an IRA (individual retirement account), or joining your companies 401k/403b plan, but for the most freedom you will want to open a brokerage account. A brokerage account allows an investor to deposit funds with the brokerage and place investment orders with those funds. Continue reading How to Start Investing in the Stock Market
Tax return season is upon on, and this is good news for lots of Millennials. It’s great to get a lucrative return, but what to do with this large sum of money is another question. Below are 5 ways to use your tax return wisely.
#1 Pay off existing debt – highest interest first
If you have existing debt this is a good chance to pay off a huge chunk at once. Pay off whatever debt has the highest interest rate first, usually credit card debt would fit this. Paying off debt early will save you lots of money in the long run, as you will be paying mostly principal on the loan, not interest payments. Continue reading 5 Wise Ways to Use Your Tax Return
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 spend $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