I’m looking for a percent that I should put away from each check. My expenses are limited… $183 toward car payment /month, $40 for the gym /month, $60 for the phone bill /month. I get paid around $800 post-tax every two weeks. I am looking to save for two seperate things. One is for vacations the other amount I would like to put away just to start a savings account. I appreciate any sincere answers…I just graduated college, this is my first job with a steady pay check and I want to be smart about my money! Thank you!
Categories
4 Comments
Make an effort to save at LEAST 10% every paycheck. Save up about 6 months of living expenses, then start investing. See http://www.bankrate.com for calculators and rate info that will show you how much you can sock away. For vacations, use the 10% rule as well.
It sounds like you are diciplined with your money, stay on that habit and you’ll eliminate a huge amount of stress on yourself as you get older/make more money.
Ideally, you should save 20-25% in a 401k long term plan. Plus you should have about 6 months salary saved for short term emergencies. After that, save whatever you can afford for a vacation. It depends on where you want to go, how often you go, and how long you plan to stay.
Check with your work to see if they offer a 401k or similar retirement plan. If so, start putting money into it. If the company matches your contributions to a certain amount make sure you have that maxed out (at my job the company matches 401k contributions $1 for $1 up to 6% of my paycheck). So in my case I should contribute 6% of my paycheck. If I want more to go to retirements I should take the money and put it into a Roth IRA. The reason for this is the 401k money is pre tax, so when you retire you are taxed on the money at that time. Putting the money in the Roth means when you retire you will only pay taxes on the interest earned, if that. Retirement savings should be at least 10% of your funds.
After that, put aside at least 5% in savings, but 10-15% is better.
For vacations save 3-5% a paycheck and you’ll be able to take a great vacation at least once a year.
Once your savings account hits 6-12 months of salary put that money into a separate savings account as an emergency fund. Then have a different savings for the monthly amounts.
I also just graduated and got a real job. It’s nice, huh? Anyway, here’s what I do:
20% Savings account
10% Retirement account
10% Tithe (to the church)
20% Taxes
5% Health Savings Account/Health Insurance
5% Vacation
2% Gift Account (for birthdays and Xmas and being nice)
28% Bills (rent, phone, utilities, cable, gas, food, fun)
so for you, it might look like:
$1700/month
17% bills ($289)
10% retirement ($170)
20% Taxes ($340)
5% Health ($85)
20% food/entertainment -this is $80 a week – take it out every week in cash and only use it for food/drinks/movies,etc… ($340)
3% Gasoline ($50)
10% vacation ($170) ($2040 a year)
15% savings (emergency fund, start saving for a house, also use this money to buy things the you might want (i-pod, new tv, etc.) after you think about it for a month and making sure you really want it) ($255) ($3060 a year)
Just some ideas! Good luck!!