2021 Savings plans, ideas, tips and goals

[ruadisneyfan2]

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

Does your employer offer a 401k/403b?
If so, that is the best place to start. They should have people who can explain it all to you. Your contributions are deducted directly from your paycheck pre-tax. This has the additional benefit of lowering your tax liability to the IRS.
For a simple example, let’s use $100 per pay to contribute. If you designate that to go to your 401k, you are credited with a deposit of $100. If you chose to get it as cash in your paycheck, it would be more like $75-80 because it would be taxed.

 

[QueenIsabella]

Does your employer offer a 401k/403b?
If so, that is the best place to start. They should have people who can explain it all to you. Your contributions are deducted directly from your paycheck pre-tax. This has the additional benefit of lowering your tax liability to the IRS.
For a simple example, let’s use $100 per pay to contribute. If you designate that to go to your 401k, you are credited with a deposit of $100. If you chose to get it as cash in your paycheck, it would be more like $75-80 because it would be taxed.

Not to mention, a lot of places do a company match--for every dollar you put in, the company puts in something (frequently 50%, up to a certain limit). Throw this on top of the fact that your money is pre-tax, and it's a really good deal. Instead of you kicking in $1000/year, to pick a number, it's more like you kick in $500, less tax owed kicks in another $250, and the company kicks in $250. Those aren't exact numbers, just to give you an idea. Add in the fact that the money grows tax-free, for decades if you're lucky, you can have a real nice chunk of change, without feeling a lot of pain up-front. The pain comes later, when you withdraw the money and have to pay taxes.

Roth IRAs work the opposite--you put in post-tax money, but owe no taxes later--either on your initial investment, or on the earnings. If these remain the way they are, they're a really good tax deal for your retirement years. However, I personally don't trust the government--I think they're going to look at all those people, taking out all that money that they don't get a bite of, and change the rules. (YMMV on this--it's just my personal thought). But I, personally, prefer to take my tax break today, rather than count on one that's promised to me in a couple decades. This is a common debate among investing wonks.

At this point in our lives, DH and I don't need to save more for retirement. However, he still throws money in his 401k, just to get the company match. He puts just enough to get the maximum they'll give him. because hey--free money.

 

[barkley]

for those making plans regarding retirement savings. i strongly recommend looking into long term disability insurance if your employer does not offer it as a benefit. both myself and my dh became very unexpectedly totally disabled from our careers (different incidents/several years apart) and had we not had that insurance we would have had little to no monies coming into our household b/c disability pensions can take months and months to be approved and social security is a nightmare process of upwards of years.

get it while you're young and healthy-much better premiums.

 

[Nebraska_Disney]

Some great advice here from some and I'll chime in. I too am not associated with any investment or banking firm, I have learned how to do all of this on my own (by reading) and from some advice my dad provided.

First, live within your means. Have a budget and stick to it. Once you are comfortable with your budget, start seeing where you can adjust it to utilize cash out of one area and in another (savings)

Emergency funds are needed. 3-6 months of cash set aside that covers all expenses you would have during that period. Think of taking your budget and multiplying the portions of it that are not associated with any savings/investments by 3-6 and this will get you started on where you should be on an emergency fund.

I am true to Vanguard and follow many of the "boglehead" principles which the founder of Vanguard preached. Some good stuff in this forum: https://www.bogleheads.org/ I started my first mutual fund when I was 14 and my wife and I put close to 40% of our gross pay into retirement savings every year. I am in my mid 40's now and we have reached 7 figures on our retirement investments and neither of us makes over $75K a year. We have funded college savings for both our kids, utilizing our states 529 plan. The key to the benefits of compounding interest is to start early and always pay yourself first. Treat your savings and investments like a "bill" that you put the money to first and foremost every month.

Read books on investing and how it can be done. There is no single way to approach it, but low costs and diversification will not only save you money, but will balance out what you are trying to do and will not place all your eggs in one basket. Even for my "emergency fund" I have this money in Vanguard in a lower risk fund that pays 5-9% annually, which is way better than what any bank can offer me and I accept the added risk of not being in a bank.

You have to be determined and you have to be religious about saving and investing. Little gimmicks of a gift card here or a survey there is nice, but that is not real financial planning and will only take you so far. Until a person decides to pay themselves first, much of this will not make sense.

Edited to add: If you have any debt (car loans, credit cards, student loans, etc) you should have a plan for eliminating and paying them off ASAP.

 

[2China2009]

BIG PAYOFF GOALS 2021.
I am 49 years old single mom with 2 daughters 17&13. Have been a nurse 26 yrs. This year will be the first time over my entire career I will be making what all nurses should make. I am a travel nurse working 36 hrs a week making big time money. So with that said here are my financial goals.
1. Mortgage paid off by April 1st.
2. Credit cards by March 1st.
3.No other debt!!!! Cars have been paid off for yrs,. Emergency fund for 6 months.
4. Max out Roth IRA at $6500.
5. Build a sizeable savings account around $10,000.
My DD will graduate 2022. I will pay cash for room and board. Hopefully she will apply for many scholarships to get 4 full years of academics paid for. She will then go on to Physical Therapy school and get her doctorate and she will take student loans out for her last 3 years.

 

[ruadisneyfan2]

BIG PAYOFF GOALS 2021.
I am 49 years old single mom with 2 daughters 17&13. Have been a nurse 26 yrs. This year will be the first time over my entire career I will be making what all nurses should make. I am a travel nurse working 36 hrs a week making big time money. So with that said here are my financial goals.

Wonderful! First, thank you for all that you do!! Nursing is a tough job. I actually went to nursing school before switching over to xray. The 1st 2 years were all academic/pre-requisites and 2nd 2 years all clinical. By October of my first year of clinical I knew it wasn't for me. This was reinforced further when I had my first c-section. Thank God there are people in the world with the strength, heart and stamina for your job.
There's nothing glamorous about mammography either but it suits me.
Good luck with your goals!!

 

[MrsPete]

Minivan tires are more expensive than car tires (one example)...and there are different quality/mileage levels on a tire...plus install prices...

Yes, I've owned a mini-van, and I've owned an SUV. I'm done with that -- they are not "cheap to keep" cars, and I am not a person who values cars beyond their usefulness.

2000 dollars for a water heater?

I haven't dealt with a problem water heater since ... well, since when my grandmother was alive. She died in 2013. But I can make two comments on them:

- My grandmother's water heater went bad, and I helped her buy one at Lowes (?). The cost of the water heater was reasonable, but the installation was almost as much as the water heater itself. I called my brother, and he installed it in an hour or two, saving our grandmother oodles of dollars. Of course, not everyone has the skill (or the family) to make that happen.
- If you have your water heater "serviced" every year -- I forget the name of the "rod" in the middle, but it needs cleaning every year -- your water heater will last significantly longer.

wait for when target has a special on it where you get more gift cards for buying these products.

Yes, if online articles are telling the truth, people tend to "splurge" when they're spending a gift card. Don't. Spend it just as you would your own cash dollars -- and that probably means waiting until a good sale comes along.

Personally, I'd work on the emergency fund before adding extra to retirement fund. Peace of mind is priceless.

To be argumentative, I think the emergency fund and the retirement fund BOTH give peace of mind -- just in different ways, and we all know that putting money into your retirement fund early = more time for the magic of compound interest to be on your side. I'd split my savings between the two.

Another thought: What if you had an emergency and didn't have the money? Would you have a credit card you could use? Could you easily get a loan? As a last resort, could you easily borrow against your retirement? The point is, how much trouble would you be in ... if you didn't have a fully-funded emergency fund?

Consider, too, that while having an emergency fund is 1000% better than not having one, most emergencies can be financed. For example, our HVAC broke a week ago, and the guy from Morris Jenkins offered us a payment plan.

Of course you should work towards having a fully-funded emergency fund, but UNTIL you get there, consider that you do have options.

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

This is one of my New Year's resolutions! We're planning to move -- hopefully in summer -- and I'd like to eat up most of what we have in the pantry so we don't have to move it. Honestly, we have more than is reasonable.

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

Absolutely! Don't use a credit card "just because". If you're going to give them your business, you should get something for it. Even if you pay off your bill every month /don't pay them any interest, they're still making money off of you every month.

 

[mrodgers]

I have a question since investing has been talked a good bit... Note, not rich by any means here. No set monthly extra. My extra comes from overtime which is also extra to take care of things I can't working a normal 40.

First off, I view emergency fund a bit differently I suppose than what I'm reading. Emergency fund is for income loss, not house or car repairs. Those are budgeted as you know you will have them eventually. A new roof is not an emergency, it is something that can be seen coming from a mile away.

Also note, 401k is already being funded beyond the company match, but not to the level you folks are which would be impossible.

Do investments such as in Vanguard require a regular deposit? I have a bit of cash sitting uselessly in a savings account (not getting anywhere with my $0.13 interest per month). I do not have a regular extra income in my paycheck to do regular monthly investing. It is near impossible to find financial help or investing help when you are paycheck poor as everything assumes you have an enormous amount every month to add to it.

I am working on emergency fund as well as savings fund for other non-emergency non-regular items (read as home repair or car repair.) The emergency fund I want to invest in mutual funds, but it would be funded as money comes rather than regularly. It's feast or famine as overtime and end of year bonuses and other income comes. Can one throw $1000 (random) in a mutual fund and forget about it for 11 months until the end of the year when one cashes in 15 days of unused vacation or until the tax return comes, that sort of thing?

I have just finally recovered from divorce recently, well, right before the pandemic paying off a car, furnace, and debt. I still have many things needed to purchase to make living easier so most of my extra goes towards that (need a fridge, want a freezer, have no propane for the stove, etc) which means there isn't much to start investing. This is why a lot of people don't invest, there's no information on how to go about finances if you're not in the middle class. I fund the savings account during the feast times so my daughter can go to college still during the famine times and I'm finally finding myself OK with all the extra non-bills expenditures to where I can start investing.

 

[ruadisneyfan2]

I have a question since investing has been talked a good bit... Note, not rich by any means here. No set monthly extra. My extra comes from overtime which is also extra to take care of things I can't working a normal 40.

First off, I view emergency fund a bit differently I suppose than what I'm reading. Emergency fund is for income loss, not house or car repairs. Those are budgeted as you know you will have them eventually. A new roof is not an emergency, it is something that can be seen coming from a mile away.

Also note, 401k is already being funded beyond the company match, but not to the level you folks are which would be impossible.

Do investments such as in Vanguard require a regular deposit? I have a bit of cash sitting uselessly in a savings account (not getting anywhere with my $0.13 interest per month). I do not have a regular extra income in my paycheck to do regular monthly investing. It is near impossible to find financial help or investing help when you are paycheck poor as everything assumes you have an enormous amount every month to add to it.

I am working on emergency fund as well as savings fund for other non-emergency non-regular items (read as home repair or car repair.) The emergency fund I want to invest in mutual funds, but it would be funded as money comes rather than regularly. It's feast or famine as overtime and end of year bonuses and other income comes. Can one throw $1000 (random) in a mutual fund and forget about it for 11 months until the end of the year when one cashes in 15 days of unused vacation or until the tax return comes, that sort of thing?

I have just finally recovered from divorce recently, well, right before the pandemic paying off a car, furnace, and debt. I still have many things needed to purchase to make living easier so most of my extra goes towards that (need a fridge, want a freezer, have no propane for the stove, etc) which means there isn't much to start investing. This is why a lot of people don't invest, there's no information on how to go about finances if you're not in the middle class. I fund the savings account during the feast times so my daughter can go to college still during the famine times and I'm finally finding myself OK with all the extra non-bills expenditures to where I can start investing.

I would say once you’re caught up on post-divorce needs, you could open a Vanguard acct. The minimum opening investment varies but their website will list it. You could open a mutual fund acct as either an IRA, a Roth IRA or just a personal investment account. If you choose the latter, any earnings will need to be declared as income to the IRS, same as if it were earning interest in a savings account.
Of course it’s great if you can keep adding to it but even if you can’t add on, I don’t believe it’s required. These questions would be good to ask a phone rep. I have found them to be a wealth of knowledge with no pressure.

 

[imbatman]

Does your employer offer a 401k/403b?

If your employer does match, check in on it regularly. We discovered last year that DH's employer stopped making their matching payments. No explanation. Since they laid off 2/3 of their workforce and DH kept his job, he didn't ask. But it made us more vigilant about checking.

There's nothing glamorous about mammography either but it suits me.

But it's people like you who save people like me (mammograms save lives, people!)

I'm finally finding myself OK with all the extra non-bills expenditures to where I can start investing.

I hop over to Doctor of Credit at least once a week. I hadn't planned on opening a Fidelity account, but they often run specials to open accounts. When I opened mine a few years ago, it was a $500 opening balance and a $200 credit after 6 months. So, you can check on Vanguard or Fidelity to see if there are any bonuses once you get closer to that goal.

 

[ruadisneyfan2]

But it's people like you who save people like me (mammograms save lives, people!)

Aww, thanks. So true. A few seconds of discomfort is worth a lifetime.