2021 Savings plans, ideas, tips and goals

[ruadisneyfan2]

Personally, I'd work on the emergency fund before adding extra to retirement fund. Peace of mind is priceless.
We have around 7 months of expenses saved and that includes all the misc. things such as haircuts, oil changes, etc.
I'd rather keep the $ in savings than prepay months in advance for utilities though I'm sure they're happy to accept extra $$.
Our Varo Bank savings account earns 2.8% interest up to $10,000. We keep it just under the limit so that the interest earnings don't push it over 10k. It's only around $23-24/month in interest but I'll take it vs. letting the gas company or Verizon keep it. They can go scratch.

 

[dclpluto]

They are typical prices for NJ also. Not just Cali.

Nope I live in New Jersey. If you get the top of the line water heater and have someone install it yes maybe a hot water heater is 2000 dollars. Last time I got one a few years ago I paid I think 650 dollars for it. A new roof 10k dollars had a new roof put on dec 19 it was 6780 with the work being done by someone else. Of course I don’t have a big house.
1000 dollars for new tires I got new tires on my wife’s car 17 inch good year forget the price but wasn’t near 1000 dollars. Sure if you have giant tires you will pay 1000 dollars.

 

[ruadisneyfan2]

Nope I live in New Jersey. If you get the top of the line water heater and have someone install it yes maybe a hot water heater is 2000 dollars. Last time I got one a few years ago I paid I think 650 dollars for it. A new roof 10k dollars had a new roof put on dec 19 it was 6780 with the work being done by someone else. Of course I don’t have a big house.
1000 dollars for new tires I got new tires on my wife’s car 17 inch good year forget the price but wasn’t near 1000 dollars. Sure if you have giant tires you will pay 1000 dollars.

Our roof was over $9k and that was in 2013. Some estimates were way more than 10k. Our house isn’t large but it’s a rancher so every sq ft of room, garage, even a closet, has its own roof.

Not everyone is content with the crap they sell at Home Depot. We’ll never buy any type of plumbing supplies there and that includes water heaters. We remodeled our kitchen in 2002 using a lot of items from HD. In less than 10 years the drain pipe from our kitchen sink literally crumbled to pieces. It’s all low quality crap geared toward DIY homeowner’s who don’t know the difference, made by the lovely people who gave covid to the world.
I’ll gladly pay more for real brass at a plumbing supply shop Jmho

 

[dclpluto]

Our roof was over $9k and that was in 2013. Some estimates were way more than 10k. Our house isn’t large but it’s a rancher so every sq ft of room, garage, even a closet, has its own roof.

Not everyone is content with the crap they sell at Home Depot. We’ll never buy any type of plumbing supplies there and that includes water heaters. We remodeled our kitchen in 2002 using a lot of items from HD. In less than 10 years the drain pipe from our kitchen sink literally crumbled to pieces. It’s all low quality crap geared toward DIY homeowner’s who don’t know the difference, made by the lovely people who gave covid to the world.
I’ll gladly pay more for real brass at a plumbing supply shop Jmho

I have a rancher also like I said it’s not big. 1144 square feet. 6780 in dec 2019 50 year shingles at least that’s what it said. I’m expecting 25 years. No garage I didn’t buy my water heater from Home Depot. It was from a plumbing place.Sure I could get a bigger house but I like to enjoy life and save for retirement.
I agree with you about the covid.

 

[dreamin_disney]

I happen to checkout a you tube video about a lady who did savings change
-$5 $10 challenge
-$356 day challenge
-rolling over
she saved almost $3000

she didn’t explain the saving just a video to see how much she saved.
she mentioned sinking funds so I’ll have to look into that.
I don’t carry cash so no saving $1, $5, $10.
years ago I did a 356 day challenge everyday has a different amount and starts with $1. I wish I had the chart.
Last couple years we saved our change and put in a vacation account. With the pandemic we don’t use cash.

 

[starry_solo]

I think it’s like an envelope system

 

[starry_solo]

oops double post

 

[afan]

I happen to checkout a you tube video about a lady who did savings change
-$5 $10 challenge
-$356 day challenge
-rolling over
she saved almost $3000

she didn’t explain the saving just a video to see how much she saved.
she mentioned sinking funds so I’ll have to look into that.
I don’t carry cash so no saving $1, $5, $10.
years ago I did a 356 day challenge everyday has a different amount and starts with $1. I wish I had the chart.
Last couple years we saved our change and put in a vacation account. With the pandemic we don’t use cash.

I don't use cash either and used to round all my purchases up to the next dollar and add the cents up and then deposit it each month. It ended up not being that much in the end. I found it's much easier to designate an amount per check or I do the 52 week thing, start at 52 and move down, but once I hit 24 I add on the littlest amount and do 25 a week for the rest and then start again.

I do think the extras, or saving any 1s or 5s when you get them can be a great way to do it, if you use cash for most everything.

 

[dreamin_disney]

I don't use cash either and used to round all my purchases up to the next dollar and add the cents up and then deposit it each month. It ended up not being that much in the end. I found it's much easier to designate an amount per check or I do the 52 week thing, start at 52 and move down, but once I hit 24 I add on the littlest amount and do 25 a week for the rest and then start again.

I do think the extras, or saving any 1s or 5s when you get them can be a great way to do it, if you use cash for most everything.

Tomorrow I’m going through my pantry and freezer and making an inventory list. I’m going to try and use up items and make meals without having to buy stuff. I will have to go buy fresh fruit or veggies and I’ll pick up certain items needed but only if I really need it. Let’s see how this goes. The budget bug really bit me because I’m so motivated to save

 

[barkley]

Not everyone is content with the crap they sell at Home Depot. We’ll never buy any type of plumbing supplies there and that includes water heaters. We remodeled our kitchen in 2002 using a lot of items from HD. In less than 10 years the drain pipe from our kitchen sink literally crumbled to pieces. It’s all low quality crap geared toward DIY homeowner’s who don’t know the difference, made by the lovely people who gave covid to the world.
I’ll gladly pay more for real brass at a plumbing supply shop Jmho

as we've had to repair/replace we've also upgraded the quality from what the original builder put into our home. that said-because of it i'm dogged about keeping receipts because if (god forbid) our home was heavily damaged or destroyed i would want proof of the quality of what it's current status is for insurance purposes. i don't need my insurance company assuming that the repair/rebuild can be just current spec house standards. i pay for replacement value coverage so i want the proof of what i had in place (i purposely keep the bigger ticket item receipt folder off site in our safety deposit box b/c it will do me no good if it's destroyed along with the house).

Tomorrow I’m going through my pantry and freezer and making an inventory list. I’m going to try and use up items and make meals without having to buy stuff. I will have to go buy fresh fruit or veggies and I’ll pick up certain items needed but only if I really need it. Let’s see how this goes. The budget bug really bit me because I’m so motivated to save

i did the same thing last week. i knew i had a number of premade items leftover from thanksgiving and christmas but was surprised by some others i had forgotten i originally made double batches of (purposely to freeze for later use). i made 2 lists that are now on my outside freezer-one lists all the types/cuts of meats, the second all the premade entrees and sides. my goal is to only purchase produce and dairy for the foreseeable future.

 

[ksanftleben]

MomToOne provided some great advice above. My two-cents-worth of additional advice—which you should discard or take as you see fit—includes:

Read a couple of the time-tested books about creating and maintaining wealth like The Millionaire Next Door by Thomas Stanley, Rich Dad Poor Dad by Robert Kiyosaki, or Think and Grow Rich by Napoleon Hill. All have great (if at times a little dated and/or hard-to-swallow) advice. Incorporate most (or at least some) of it into your financial planning. It really works if you stick to it. In general:

Live enjoyably but affordably. Don’t waste money on keeping up with the Joneses. Buy for quality, not status. Don’t spend money on things, including vacations, that you may want but don’t really need until you can actually afford them and are able to pay them off completely within a month or two.

If you have any credit card debt, pay it off before making another charge account purchase. After it is paid off, keep no more than two credit cards and pay them off monthly,

Create and keep to a sensible budget that includes reasonable entertainment expenses.

Establish and begin funding an emergency savings account in order to keep up with mortgage payments and minimal living expenses (food, utilities, car maintenance and operation, property taxes, medical insurance, unavoidable home repair expenses, etc.) in case a crisis hits. Emergency fund contributions should be part of your budget until that fund is large enough to cover six months of troubles.

After your six-month emergency savings account is fully funded, establish an IRA or 401K account, and make regular contributions. “Pay yourself first,” by making that contribution the top-line on your budget and putting money into your IRA or 401K every single month. Don’t play the market, instead find a quality market index mutual fund (Vanguard and Fidelity funds come to mind), stick with it, and invest the same amount every month; dollar-cost-averaging is the way to go for most people when it comes to long-term investing.

This isn't as hard to do as it may sound.

 

[tvguy]

This isn't as hard to do as it may sound.

I agree, but frequently get flamed here for suggesting that.

 

[dreamin_disney]

If you have any credit card debt, pay it off before making another charge account purchase. After it is paid off, keep no more than two credit cards and pay them off monthly,


After your six-month emergency savings account is fully funded, establish an IRA or 401K account, and make regular contributions. “Pay yourself first,” by making that contribution the top-line on your budget and putting money into your IRA or 401K every single month. Don’t play the market, instead find a quality market index mutual fund (Vanguard and Fidelity funds come to mind), stick with it, and invest the same amount every month; dollar-cost-averaging is the way to go for most people when it comes to long-term investing.

This isn't as hard to do as it may sound.

I only use credit cards that I can earn cash rewards or points for gift cards. I pay off my cards every month.

vanguard And fidelity funds .....long term investing... is that like a savings accoun/retirement acct with high % earning? When I think of investing I think stock market which I know nothing about.

 

[ksanftleben]

vanguard And fidelity funds .....long term investing... is that like a savings accoun/retirement acct with high % earning? When I think of investing I think stock market which I know nothing about.

Vanguard and Fidelity are two of the most highly regarded investment companies, and both offer investors some of the best-performing index funds.

There is an enormous amount of information about index funds online, and I imagine there are financial advisors near you that would be glad to provide an explanation (some probably for free in hope that you’ll hire them.) But, here is a short run-down.

An index fund is an investment fund that is based on a collection of different stocks. When you invest in an index fund, your money—along with money from thousands of other investors—is used to purchase a group of stocks chosen by a ‘fund manager’ to represent one of the traditional stock market indexes, i.e., the Dow Jones Industrial Average, the Nasdaq 100, or the S&P 500. Fund managers select a grouping of funds listed in an index that they believe will best match that index’s overall performance with a minimal amount of active effort on their part. This greatly reduces expenses and keeps the annual fees that are passed to the investors as low as possible. Index funds' returns are tied to how well or poorly the stock market does each year; over the past 20 years, I think most funds have averaged annual returns of 7-15%

Index funds are very popular among investors who know little about stocks and don't want to play the market. They are often used to fund IRAs or other retirement accounts. That’s because they have provided very good returns over the long term and their diversity makes investing in the stock market as safe as possible. Overall, they provide good returns, easy diversification, low risk, and low cost.

Clarification - I'm not a financial advisor, nor am I associated with either Fidelity or Vanguard other than as an investor.

 

[dreamin_disney]

Vanguard and Fidelity are two of the most highly regarded investment companies, and both offer investors some of the best-performing index funds.

There is an enormous amount of information about index funds online, and I imagine there are financial advisors near you that would be glad to provide an explanation (some probably for free in hope that you’ll hire them.) But, here is a short run-down.

An index fund is an investment fund that is based on a collection of different stocks. When you invest in an index fund, your money—along with money from thousands of other investors—is used to purchase a group of stocks chosen by a ‘fund manager’ to represent one of the traditional stock market indexes, i.e., the Dow Jones Industrial Average, the Nasdaq 100, or the S&P 500. Fund managers select a grouping of funds listed in an index that they believe will best match that index’s overall performance with a minimal amount of active effort on their part. This greatly reduces expenses and keeps the annual fees that are passed to the investors as low as possible. Index funds' returns are tied to how well or poorly the stock market does each year; over the past 20 years, I think most funds have averaged annual returns of 7-15%

Index funds are very popular among investors who know little about stocks and don't want to play the market. They are often used to fund IRAs or other retirement accounts. That’s because they have provided very good returns over the long term and their diversity makes investing in the stock market as safe as possible. Overall, they provide good returns, easy diversification, low risk, and low cost.

Clarification - I'm not a financial advisor, nor am I associated with either Fidelity or Vanguard other than as an investor.

Thank you so much for the info. I wish they taught us this in High school

 

[ruadisneyfan2]

@dreamin_disney
First, I don't work for any of these companies mentioned but I do admit I'm a big fan of Vanguard and have been investing with them for almost 30 years.

A mutual fund is a collection of many stocks combined. So rather than buying individual stock in let's say Disney, Coca-Cola, Amoco & Microsoft, you find a mutual fund that invests in those companies along with several other companies. It's a safer way to invest because you're not "putting all your eggs in one basket." Index funds are a type of mutual fund that has a goal of keeping returns in line with a chosen stock index such as S&P, et al. Doing this makes it easier to manage which keeps costs down. Vanguard is well known for keeping costs down which means more $$ for the value of the fund. Mutual funds - Investing in a mutual fund | Vanguard

An index fund will usually say index right in its name, at least those from Vanguard do. Part of what investors look at/compare in a mutual fund besides returns is the cost which is listed with the rest the stats on each fund. So while index funds have lower cost, they tend to have slightly lower returns than non-index funds. I have some of both and my non-index funds shock me sometimes how well they perform. Maybe that's just me and the funds we have. Maybe that is a real difference between index and non index. I don't know and maybe someone with more knowledge can chime in.

Overall, higher risk mutual funds tend to be more volatile, which means they tend to swing higher and lower than others. Highs are wonderfully high, but then the lows are pathetically low. Your personal risk tolerance is a factor but for retirement funds, your age is a big factor. When you're 59, you don't have 45 years of future working to make up for a big loss. Our ds20 has plenty of time until retirement so he can take on more risk by choosing high-earning, more volatile funds. Time and compounding % is what will grow his retirement fund to become sooo much more than what he actually contributes. Compounding means your earnings start producing their own earnings and it just keeps growing. Some mutual funds automatically adjust the risk as the investor ages so that as retirement nears, it's not investing in riskier stocks. Vanguard calls these Target Retirement 20xx with a variety of retirement years to choose from. This takes some guesswork out of it.

A word about big loss. When you hear the news and people crying about their investments dropping so low, such as last March when covid hit, you really only suffer that loss if you withdraw from that fund. That would be like "selling low."
If you leave it there, the market recovers eventually and the value goes back to what it was, or hopefully better. If it's a short dip and recovers quickly that's not so bad. If it lasts a long time, like years, we lose the earning potential that fund would have had.
The worse thing you can do when there's a crash is to pull your money out. Let it ride the waves. This, of course, is a problem for retired folks who HAVE to make withdrawals as their income. The only way around that is for retirees to create a cash buffer of 1-2 year's worth of future income before they retire so that if the market dips, one can choose to not make any disbursements from the retirement fund.

Time is the one thing that benefits everyone investing, whether you invest a lot or a little bit, so the sooner you start, the better!
9 Charts Showing Why You Should Invest Today | Investing 101 | US News

 

[ruadisneyfan2]

Thank you so much for the info. I wish they taught us this in High school

For my kids who graduated in 2015 & 2018, Financial Literacy was required for HS graduation in NJ. It was only a half year course but I do believe it should be a full year class and include personal money management as well. Throughout one's lifetime, being smart with managing their money will be far more useful than most HS classes taught.

 

[dreamin_disney]

@dreamin_disney
First, I don't work for any of these companies mentioned but I do admit I'm a big fan of Vanguard and have been investing with them for almost 30 years.

A mutual fund is a collection of many stocks combined. So rather than buying individual stock in let's say Disney, Coca-Cola, Amoco & Microsoft, you find a mutual fund that invests in those companies along with several other companies. It's a safer way to invest because you're not "putting all your eggs in one basket." Index funds are a type of mutual fund that has a goal of keeping returns in line with a chosen stock index such as S&P, et al. Doing this makes it easier to manage which keeps costs down. Vanguard is well known for keeping costs down which means more $$ for the value of the fund. Mutual funds - Investing in a mutual fund | Vanguard

An index fund will usually say index right in its name, at least those from Vanguard do. Part of what investors look at/compare in a mutual fund besides returns is the cost which is listed with the rest the stats on each fund. So while index funds have lower cost, they tend to have slightly lower returns than non-index funds. I have some of both and my non-index funds shock me sometimes how well they perform. Maybe that's just me and the funds we have. Maybe that is a real difference between index and non index. I don't know and maybe someone with more knowledge can chime in.

Overall, higher risk mutual funds tend to be more volatile, which means they tend to swing higher and lower than others. Highs are wonderfully high, but then the lows are pathetically low. Your personal risk tolerance is a factor but for retirement funds, your age is a big factor. When you're 59, you don't have 45 years of future working to make up for a big loss. Our ds20 has plenty of time until retirement so he can take on more risk by choosing high-earning, more volatile funds. Time and compounding % is what will grow his retirement fund to become sooo much more than what he actually contributes. Compounding means your earnings start producing their own earnings and it just keeps growing. Some mutual funds automatically adjust the risk as the investor ages so that as retirement nears, it's not investing in riskier stocks. Vanguard calls these Target Retirement 20xx with a variety of retirement years to choose from. This takes some guesswork out of it.

A word about big loss. When you hear the news and people crying about their investments dropping so low, such as last March when covid hit, you really only suffer that loss if you withdraw from that fund. That would be like "selling low."
If you leave it there, the market recovers eventually and the value goes back to what it was, or hopefully better. If it's a short dip and recovers quickly that's not so bad. If it lasts a long time, like years, we lose the earning potential that fund would have had.
The worse thing you can do when there's a crash is to pull your money out. Let it ride the waves. This, of course, is a problem for retired folks who HAVE to make withdrawals as their income. The only way around that is for retirees to create a cash buffer of 1-2 year's worth of future income before they retire so that if the market dips, one can choose to not make any disbursements from the retirement fund.

Time is the one thing that benefits everyone investing, whether you invest a lot or a little bit, so the sooner you start, the better!
9 Charts Showing Why You Should Invest Today | Investing 101 | US News
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I want something safe. I’m not a big risk taker. whats a good amount to start out with?

 

[ruadisneyfan2]

I want something safe. I’m not a big risk taker. whats a good amount to start out with?

Most have a minimum investment amount to open. My non-retirement fund needed a min of $3000 to start but look around and maybe some are less.

 

[ksanftleben]

Only you can answer questions about how much to invest initially and then on a regular monthly basis. If you're interested in investing for your retirement needs, this link will take you to an article that discusses how much you might need. (There are many similar articles online.)

After you've read it, you might want to play around with a financial investment calculator like at this link to see how much you need to invest to best fit your current situation and future needs. (For the annual return block entry, try a couple of different return rates somewhere between 7% and 12%.

Fidelity has many beginning-investor index funds that require no minimum initial investment. Here's a link.

Vanguard requires a minimum investment of $1,000 on many of its entry-level and retirement-focused mutual funds. Here's a link. A lot of people like Vanguard's "Target Retirement Funds" because they balance earnings vs risk based upon how many years you have left until retirement.

Best of luck.