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  1. #1
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    Default The importance of savings

    I know that the economy in general sucks right now, and I also know that a lot of us will be in somewhat of a pinch because of gas prices.

    I thought I would post links to articles that I read and find interesting relating to personal finance, and saving.

    Here's one I found on Yahoo.

    Spend-$10-Today-Be-Out-$100K-Tomorrow: Personal Finance News from Yahoo! Finance

  2. #2
    The Resident Shopaholic susieq's Avatar
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    Default Re: The importance of savings


  3. #3
    Moderator and Blogger boysRsmelly's Avatar
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    Default Re: The importance of savings

    Yep, my husband has been on the savings thing lately. :rolleyes: He made me open up a joint savings account that we can both (supposedly) put money into. I have $20 taken out of my paycheck automatically. Him... well, I'm not sure what's going on with him. But wait a minute... this was his idea to begin with the little sneak!

  4. #4
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    Default Re: The importance of savings

    You know what's hard for me to do ... put money in my 401(k)...I get a 70% match so it's like throwing money away by not saving...but it is SO HARD. This market has negative returns across the board...I do realize that I am only 24 and over the next 30 years returns will be better. I hope.

    BrS, if you don't plan on tapping in to the savings, you can open up a Roth IRA or a traditional IRA (traditional IRA's are on pre-tax income meaning you don't pay taxes until you start drawing money out and ROTH IRA's are on post-tax income meaning you pay taxes now, but don't pay taxes when you take distributions in retirement.) Even with small savings, it will really add up over time.

    The good thing about retirement accounts are that if you ever have to file bankruptcy, you won't lose your retirement money. This is a loophole that could be changed by bankruptcy laws, though (so always check with an attorney before filing bankruptcy)

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    Moderator and Blogger boysRsmelly's Avatar
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    Default Re: The importance of savings

    My work have a mandatory retirement plan. I think we can contribute up to 6% of our pay and the company will match it. Beyond the 6% though, they do not match.
    Actually, once we have a substantial chunk of change in the savings account, we'll probably look into CDs or IRAs. The interest rates are really crumby right now though.

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    Default Re: The importance of savings

    CD Rates suck. You're looking at like 2%...whereas last year you could get a decent 5-6%

    Roth IRAs are good too because if you need to tap in to them before retirement I think you can take out your contributions without penalty. There's a penalty on the early W/D of a regular IRA (because you didn't pay tax on the money you put in it ... remember?)

    Right now, the economy doesn't want you to save money. Interest rates are low so that you go "screw it. I am buying that Cd Player/Dvd/ipod instead of saving which pumps money into the economy. When they want the economy to slow down, they "reward" you with savings at high interest rates.

    I am too chicken to do the stock market thing, though. I just don't have the stomach for it.

  7. #7
    \(^.^)/ Jennifer's Avatar
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    Default Re: The importance of savings

    Nashville, thank you for posting that link. I was a great read!

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    Default Re: The importance of savings

    Here is another link to the Feed the Pig Campaign...it's through the AICPA and I do admit...it's a little nerdy and cheesy (hey...a bunch of CPA's thought of it with the help of the Ad Council...what did you expect?)...BUT There is a lot of information on there that is useful.

    Feed the Pig

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    Moderator and Blogger boysRsmelly's Avatar
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    Default Re: The importance of savings

    Nashville - Are the CD rates really down to 2%?! Geez... my husband and I were just checking a few months ago and they were 3 point something. I'm aware though that they used to be 4% and 5%... so that really sucks if they've fallen that much.

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    Default Re: The importance of savings

    OMG...yes...they have fallen that much. You can go to schwab.com and look at their CD rates (they have brokered CD's). Most the time you can get a little more at a local bank, but that will show you the market.

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    Moderator and Blogger boysRsmelly's Avatar
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    Default Re: The importance of savings

    My grandma was a HUGE investor in CDs. Geez, we're talking 10's of thousands of dollars. When the rates were high, I bet it was a decent chunk of change she was making in interest off of that.

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    Default Re: The importance of savings

    Quote Originally Posted by boysRsmelly View Post
    My grandma was a HUGE investor in CDs. Geez, we're talking 10's of thousands of dollars. When the rates were high, I bet it was a decent chunk of change she was making in interest off of that.
    Yes, back in the 80's CD rates were high. So...if she had $100,000 and the rate was 10%, she would make $10,000 annually (actually more, but I don't feel like compounding the interest...it's simpler when it's interest simple). So, if she needed $50,000 annually to live on, she would need $500,000 nest egg at 10%. Now, for the same $50,000 annual income, you will need $1.7 Million (rounded) at 3% OR $2.5M at 2%.

    I am thinking of putting my 401(k) match and the defined contributions that my emploeyr puts in my 401(k) account in the 2050 target account (those are mutual funds that are supposed to reallocate/rebalance theirselves throughout your life so that you are taking riskier investments when you are young for higher potential returns and then it get's more and more conservative as time goes on and you near retirement - the name of the account like 2050 is for the year closest to your retirement.) and then the money I withhold put it in a fixed income REIT (for rental property - not mortgages). I don't know. I hate it. I wish CD rates were higher!

  13. #13
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    Default Re: The importance of savings

    *sigh* i really should start saving.

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