Tips on saving/managing money

Oh, and you can also buy through mutual funds, that's right.

But if you're looking to hold your money for the short-term, try opening a money market account. That's very easy to do through your bank. You can only take money out a set number of times a month. They earn much higher interest. Just reserve a certain set amount to play around with and shop with.

 

Okay, when you feel ready to start doing mutual funds, which perhaps a less adventurous investor ought to consider doing, here is what looks like a fairly good article on mutual funds:

MONEY 50: The World's Best Mutual Funds and ETFs - TIME

I just sometimes get sort of excited watching individual stocks and seeing what they do and trying to figure out why. I'm just a nerd like that. I've been off that for several months, being kind of preoccupied, but damn, it's fun to study. It's hard for me to think about things like mutual funds, but they make so much sense.

But just ask at your bank about a money market account. Nearly all banks can set you up with one. Also, nearly every bank in the country has a financial advisor you can talk to: her job is to give you better advice than most here could. She is paid for it, and she is paid well, just to talk to you about handling money.

 

if you don't already, start using cash, and don't bring a ton with you.

 

I have monthly direct debits so money is taken out of my account every month to pay for things - at least then I don't miss payments or decide to skip payments.

I also don't have a credit card - I was advised against getting one and I have no desire to. I do not want to go down that route.

 

You might want to look at breaking bad habits.. If you figure out their cause it's easier to stop them. I used to be a huge impulsive buyer too, but then I realised that the cause was probably rooted in not having much choice growing up due to being raised by a single mother with two kids which led to me wanting to spend money to make up for missing out on things I thought I wanted. Having that awareness really helped me cut back with impulse spending because I could see why I was doing it, and now I'm a lot better with my money.

I think the best advice is just to literally spend money on necessities only and even then make those the cheapest you can. I read your savings goal needs to be completed by December, so the next few months are probably going to suck but it has to be done.

If you know your income, your necessary expenditures, your savings goal and how long you have to complete it, then you can work out how much disposable income you have and how much of that you need to put away every week or month. Put that into an account and do not touch it. Don't carry around a debit card and do not go to withdraw anything until you have to. Setting up a direct debit with your bank so that it goes straight from your paycheck into that account before you see it will make it a lot easier.

 

Banks won't give you good rates on anything right now, including money market accounts, cd's, etc. The only thing such accounts are good for at the moment is perhaps to prevent yourself from dipping into funds that you want to preserve. If you're able to put away a sum of money and not touch it for 6 months to a year, you could get a cd, but the cd rates are currently pathetic and I wouldn't even bother with it.

 

I dislike credit cards, partly because some in my family have had problems. That said, a credit card is almost a necessity in the US. Credit history hugely helps with renting a place to live, and sometimes (I think) it may be looked at by potential employers.

The key is to be careful with the credit card. Use it enough to keep the account active, and pay it off every month.

 

Yeah, interest rates will never again be as high as they were at some point in the 1980's, I think. I think that's when a lot of people had huge interest in trying to save money in the banks. I think it was related to stagflation or something, and I think Volcker had this theory regarding interest rates. It was a crazy time.

The current thinking on money market accounts, though, is really similar to the thinking on treasury bonds, which is basically that they're just a place for money to sit and do slightly more than nothing. In fact, I don't think t-bonds even keep up with inflation.

Actually, I don't think that, for a while, interest rates were even keeping up with inflation. Wasn't it the case, at one point, that if you had money in the bank or even CDs, its worth was being eaten up by inflation faster than it gained value? Weird time.

---------- Post added 17th Jun 2015 at 06:35 PM ----------

Wait, yeah, I checked. Yeah...if you have a CD, then if you consider inflation, you're actually losing money. Sorry, but you're getting poorer! Woo!

 

Options are the way to go, if you have a solid strategy and know what you're doing. The returns can be lucrative, and the strategies available aren't one dimensional like buy and hold.

 

Don't get married.
Ever.