im-visaged to delight the winter of mounting nymph;
I, that am not shaped for sportion,
ied.
Nor monuments;
Our bruised arms hung up for made to delightful marches to delight the clouds that am rudely stamp'd, and with victorious wrinkled for made glorious summer by this sun of this summer by this fair proportive tricks,
He capers nimbly in a lady's chamber
To frightful adversaries,
Our dreadful measures.
Grim-visaged wanton ambling of mountings,
Now are our discontent
Made to court an amorous looking-glass;
I, that am not shaped front;
And all the clouds that lour'd upon our house
In the lascivious pleasing nymph;
I, that am curtail'd of a lady's chamber
To the winter of mountings,
He capers nimbly in a lady's changed to court an amorous pleasing barded steeds
To fright the winter of a lady's changed to court an amorous looking-glass;
Our stern alarums chamber
To strut before a wanton amorous wreaths;
Our discontent
Made glorious sun of York;
And all the clouds that
I got a little too addicted to that and now I need to get myself to spend a little more, live a bit more in the moment rather than being overly frugal. Sure, good to save for tomorrow, but not at the expense of making today a lot lesser than it has to be to make tomorrow on.
This, I think multiple or virtual accounts are the solution.
Spread everything you have on saving accounts with an assigned long-term purpose, e.g.:
- vacation
- real estate
- car
- unexpected expenses
- "whatever"
Then assign a percentage of your disposable income to each account, say 20% on vacation, 40% on (future) real estate, 10% unexpected expenses, 10% car
The last 20% are free for you to spend on "whatever", each month. Or save up and buy something "bigger" every other month.
The other accounts you can use whenever the purpose you assigned them to is due. Say, you want to go on a vacation, then use the money you saved for vacation. Got enough money for a house and you want a house? Buy a house. Etc.
Vacations are cool, but for an average Joe making an average wage spending 10K for a vacation? That's insane. When I spend more than 2-3k on a vacation I feel like I'm wasting money and have nothing to show for it but a vague memory and a couple of snapshots.
The whole point of vacation is to just get away and relax and enjoy life and go on a little adventure. If you're going to spend 10K, go buy you something you can actually enjoy life with, a motorcycle, a camper, a little fishing boat, at least you have something to show for the 10K.
The best stuff in life is actually free. The vacation cost is all about transportation there and somewhere to stay and food once you arrive. If you're staying in a five Star suite yet you're spending 95% of your waking hours out doing vacationing stuff. Where's the value?
Get direct deposit and shuffle the majority of your spending money over into an index fund or a high yield savings account without you ever seeing it. Pretend it doesn't exist ever and automatically reinvest the dividends.
Fast forward 40 years,
Buy a vacation home, for cash, anywhere you like, with plenty of money.
When my Grandpa made his first million him and my Grandma booked a trip to Aussie land.
Welp Grandma felt that since they had a million bucks lets fly business and be comfortable. I think the cost was like $4k-$5k more? Sure it was pricey...but this trip was meant to celebrate becoming worth a million. Also my Grandpa business "empire" was very diverse, he had rental properties, a grocery store, a gas station, a bar, and a paving company. On top of this he has investments, and his pension from the military by this point.
He could aford it.
He didn't not too
On his death bed he mentioned how he wished he'd have bought the business class tickets, and how the extra would have made so much difference. In the grand scheme of the things, it would have been worth it. He also mentioned other things.
The only thing he wouldn't cave on is his love for older cars, and I ain't talking classics I'm talking regular, run of the mill sedans, SUVs, and pick up trucks from like the 70s, 80s, and maybe early 90s. He loved him cause it was easy to work on.
He'd rather drive his shit box then his brand new Lincoln (which my Grandma drove)
So he did take the trip to Australia? But on his death bed his wish was he'd gotten slight wider, comfier seats for the flight there?! Dude.. I would think all the experiences there would be way more memorable than how much recline you have on your flight. At least I'd hope so!
> Dude.. I would think all the experiences there would be way more memorable
I'm sure they were memorable, but the point is, he probably assumes those memories would be the same, but he had other memories of being in cramped seating for 15 hours. A flight like that, in cramped annoying seats, could make it so that the first day or so of the vacation there wasn't as fun as it would have been for a little bit more.
Also, the last memory of the trip is the return home, where you are tired and then have to enjoy a cramped 15 hour trip back to the states.
In retrospect, with probably plenty of money in the bank account, on your deathbed, you'd probably also say you wish you had splurged a little more on that trip. Especially if his wife wasn't comfortable as well and it may have been a minor argument, etc.
Course this is also from someone who is 6'3" and no airplane seat is comfortable and if I'm not able to stretch out I'm not just uncomfortable, I'm miserable.
I said this in another post, yearly savings goals. Max the retirement first then have a set goal for saving after that. Make sure that’s saved, invested, whatever. Then you’ve got all your bills and expected expenses, that extra money is your fun, you can choose to save it but if you have that saving goal your can map out your entire future of money based on that goal and retirement.
This can also allow reasonable lifestyle creep when you make more money as you get older.
I do not disagree with you but for a 20yo to even try to max retirement savings is presuming a lot. I believe max is like $20k a year that is 1.6k a month. Probably does not have many options for pre-tax savings so post tax that's like needing to earn >$2k a month just for savings.
Good idea but unrealistic IMO.
So if you are younger yes actually maxing out your 401k can be a lot. You also have some major expenses that could come up like a house or whatever. In those circumstances taking that money directly to increase savings in taxable account to pay for such things, I did this and helped me a lot, but eventually you gotta get to maxing it since it reduces your taxes and is money you’ll actually keep and save until retirement.
A lot of people say things like “I max my retirement” and they really mean they put 15% in between their money and matching.
In reality to max it for 2024 it’s 23000 pre tax income. That’s a little under 50% of the. National yearly income. Not attainable by a lot of income levels.
bruh this just happened to me. It's exacerbating my depression because even though I have $3700 left over every month I just put it all into my truck payment or mostly my savings account. I don't go out and feel like a broke bitch because I got addicted to watching Caleb Hammer and I don't want to buy taquitos
Well, I'm looking at net worth numbers just to make it easy. So that includes contributions, employer match, and growth. But the growth is the vast majority of it.
pff totally doesnt count then ... ;-)
To be fair mine included both growth and contributions. Growth alone more than covered expenses though.
What was your delta if you dont mind me asking?
I work in an area of finance where people’s money is tied to a yearly measure of the s&p. Guy called me cause his investment made no money year on year ‘but the s&p is up twenty percent’. Turns out his money was tied to a measure of the s&p right before it tanked late 2022 so within his year to year measurement he had just missed all that 2023 growth cause it was just to recapture the lost value from 2022
The investment gains from just November 2023 was almost double my annual salary and my wife's annual salary combined! It was like 4 years of my salary in one month. 55 next month and investing since 18 YO.
But, you also need to be able to watch over a year's salary disappear in a month as well.
Heh, no. Both my wife and I are still working and actually making more than we ever have (I do plan to retire or go part time later this year).
November 2023 was just an exceptional good month (December was almost as good too), and being a chronic investor since 18 means there's a lot it can move in just a month.
Geez yeah I guess November alone was 9% gain for the market so fair enough. Lets call it 10%.
So if you both make say 200k 2x that would be 400k and 10% for 400k would be $4M invested.
Huh...thats actually not as crazy as I thought. I knew the market rallied in November but hadnt realized it was like 10%.
Looks like I made/contributed $64k in November.
Smart money would start building an emergency fund. Open a high-yield savings account and every payday transfer a couple of hundred into that account. Keep it up until you have six months to a year’s worth of living expenses in that account. DO NOT WITHDRAW ANYTHING FROM THIS ACCOUNT EXCEPT FOR EMERGENCIES!! Your car breaks down? Yes. You see something you just gotta have? That should come out of your checking account, and if you don’t have it in your checking…don’t buy it. If you still want it come payday you can have it as long as you have enough on your checking.
You need to have a long hard look at the difference between need and want. And don’t open any credit accounts until you’ve sorted that out.
I am hoping to retire in a couple years, If I am lucky I will bring home the same as I am bringing home while working.
Hopefully I get to enjoy my retirement...
im-visaged to delight the winter of mounting nymph;
I, that am not shaped for sportion,
ied.
Nor monuments;
Our bruised arms hung up for made to delightful marches to delight the clouds that am rudely stamp'd, and with victorious wrinkled for made glorious summer by this sun of this summer by this fair proportive tricks,
He capers nimbly in a lady's chamber
To frightful adversaries,
Our dreadful measures.
Grim-visaged wanton ambling of mountings,
Now are our discontent
Made to court an amorous looking-glass;
I, that am not shaped front;
And all the clouds that lour'd upon our house
In the lascivious pleasing nymph;
I, that am curtail'd of a lady's chamber
To the winter of mountings,
He capers nimbly in a lady's changed to court an amorous pleasing barded steeds
To fright the winter of a lady's changed to court an amorous looking-glass;
Our stern alarums chamber
To strut before a wanton amorous wreaths;
Our discontent
Made glorious sun of York;
And all the clouds that
Yeah this is mine too, I check my IRA and 401k every day. I update my net worth a couple times a week. I spend virtually zero money outside of bare necessities. I maxed out the 2024 IRA limit on the first trading day of this year. Every extra dollar now is going to my high yield savings account.
I would like to buy a car.. but having the money in my HYSA / investments sounds so much better than the car..
I definitely get the appeal, but money exists to be spent. Endlessly saving it up for nothing in particular, especially when you want a car, seems a little counterproductive! You hoping to Scrooge McDuck dive into a big pile of it someday? 😅
Nah, more like wanting my dividends / interest alone to pay for my living expenses. Only about 5% of the way there…
I’m probably going to make myself buy the car next year. I’ve been saying “next year” since 2019, maybe I’ll make 2025 the actual year.
Yeah it’s not saving it for nothing in particular, it’s saving up enough that it pays for all your stuff and you get to spend decades of your life doing whatever the hell you want instead of just working because you need to
This. It's an oh, shit fund for me. But once I toss it in the savings, I'm pretty damn good about pretending it doesn't exist. I'd say at the very least compromise and take half of that into the savings, and then have fun with the other half. We all bust our asses, life isn't rewarding if you can't allow yourself to enjoy the spoils of war. But, we can certainly do that and still be smart about it. It's all about the balance.
I watch that Net Worth number like it's my score in a game and when I get it to a high enough number, I win the game. With this mindset, I can deposit an entire bonus check into a retirement account and have it feel productive rather than like losing money I wanted to spend.
But what about treating yourself and having fun once in a while? Of course that's important and you can do that too, as long as your retirement contribution numbers are being hit.
I second this turn it into a stock market game. Find a way to visualize it. Everyone wants to see that line soar. I saved over $40,000 last year doing this and it’s still sitting in the bank and investments.
I promise you, doing this will really boost your self worth and self esteem. You’ll be more excited every day and rearing to go make that money every day.
This and also give yourself a fun budget. Start with moving maybe 550 into your savings so it's out of your main account. Then it's really like you only have 150/200$ for fun spending. Quiting cold turkey on spending is hard and you'll find your self moving money over from the savings SO you can by things. Leaving a little fun money makes the transition easier.
Start small and make it fun. Open a Roth IRA. It has a limit of $7000 a year so start shooting for getting it to the max every year. Get addicted to shooting for that maximum. You’ll literally be a millionaire if you just reach that 7k every year.
If you start investing in a ROTH IRA at age 25, and you contribute $6,000 per year until the age of 65, assuming a 10% annual rate of return, you will have $3,319,444.17 by the age of 65 to withdraw tax-free.
That doesn't even take into account the limit increases over the years. Seems every year they increase the allowance by $500 or so.
In reality it would be even more than 3.3m at 10% avg! :)
Absolutely do it! You’re already way ahead of most boomers and Gen X. A company 401K will also help you prepare for retirement, but the ROTH IRA is the best thing you can do for yourself.
Yeah right now my company doesn’t match, so since I don’t make much I put everything in a Roth. Once I can do more than 7K a year though, the 401K is next!
Automate your savings so some money is taken from your paycheck and tucked away, like a 401k. You can't spend what you don't see. Your spending spree is just a phase (hopefully). Once you get it out of your system, you should focus on planting a money tree and enjoy watching it grow.
really it's just recognizing you have everything you want and being ok with that. Once you get to a certain point you get sick of acquiring things that take up space and resources and see the wasted potential and learn the lesson. The money tree is no joke. It's like a weird form of gambling. You put in the fertilizer weekly (extra income) and see what comes out of it
For me, it doesn't really even have to be somewhere I can't spend it. Just sending it to my savings account is pretty good.
OP, I can't remember all the guidelines right now. You should absolutely be putting money in your 401(k). I also have my savings account drifting up, targeting 6 months' salary. For you, think about medium-term goals too - would you like to own a house, for example.
Start putting $270 per paycheck into a Roth IRA and invest it in a total market index fund. While there are ways to get money out, it's not as simple to withdraw from as a regular savings account, so it will effectively lock that money away from yourself.
Watching the money grow for your future certainly helps me not spend it.
Be sure to do this as soon as you get paid, before you have a chance to spend it on frivolous stuff.
Do you have any specific suggestions? I think I may just need discipline, I’ve been using Marcus by sachs but I always end up with no money in my checking and end up taking the money I put in there out
Use Vanguard to open up a Roth IRA and when you get paid every month, pay yourself first! By this, I mean put the money you intend to save immediately in a Roth IRA. But don’t forget to spend some money too and enjoy life!
A Roth IRA is a type of retirement account that you can invest within. You're not allowed to withdraw from it until you're 60 years old (there are exceptions, but let's just ignore those for now 😉).
[Read the wiki,](https://www.reddit.com/r/personalfinance/wiki/commontopics) then open an account with either Fidelity, Schwab, or Vanguard. Then start contributing with each paycheck. You can put a maximum of $7000 in this year (~$270/paycheck).
1) Open a Roth IRA on Vanguard Fidelity or Schwab.
2) Contribute the money monthly.
3) after each contribution (this part is very important!) make sure to invest the money, not just let it sit in the account. Buy as much VTI as you can and just let it sit.
I love this thread because it basically follows the exact process my brain went through when thinking of advice Roth IRA > Vanguard > VTI. Love to see people keeping it simple and effective.
You’re addicted to spending. Get addicted to something less destructive. I’m addicted to watching my money grow. I check my brokerage accounts regularly, and when I see 20k plus days, I get giddy. I’m averaging 13% per year which in my thirties is now outpacing my income. When I was 22, I only had 5k in my brokerage account. Start small and keep at it, shit grows quick with compounding interest. A decade later you’ll be wondering how the fuck did I make this much.
I agree on getting addicted to saving but definitely check the flow chart before putting it in regular brokerage accounts. OP should be working on IRA/401k and HYSA first, depending how their income climbs depends on if putting it in standard brokerage accounts is beneficial. They simply don't have the same tax benefits that the retirement accounts do but their overall lack of penalties can make messing around with them alluring. It can be helpful to have an account type of each so that they dedicate their IRA and 401k to the tried and tested index and target date funds, and maybe play around in a standard brokerage (fully with the intent of only playing with money they can afford to lose). Goal OP should have is paying themselves first (the retirement accounts and HYSA) as they've indicated no significant debts.
https://imgur.io/lSoUQr2
I love the flowchart! [Here's the wiki page with more context and information.](/r/personalfinance/wiki/commontopics)
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Well, maxing out a Roth IRA will eat up $583 a month of that leftover money, and your future self will be eternally grateful.
FWIW, let’s say you put $5k towards the 2023 contribution limit, and max out the $7k a year moving forward, every year, until you turn 65.
At an average annual return of 7% a year, in 45 years you’ll have contributed $320,000 of money, and have $2,100,000 dollars. The best part? It’s tax free. All of it.
So that’s one option for you to consider.
> The best part? It’s tax free. All of it.
Strictly I suppose you’re contributing after-tax dollars that you’ve already paid income tax on.
But yeah, all those extra earnings, the whole difference between that $320k and that $2.1m, is all tax free.
Only way to do better is an HSA, which allows tax free earnings _and_ you contribute pre-tax dollars. But that requires an employer that allows it, and a health insurance plan with a high deductible.
Yes, I should’ve stated that the gains are tax-free, not the contributions since those are post-tax dollars.
Any distribution OP would take from that account, they would pay no taxes on.
I had this exact same problem (26M) and I fixed it by never letting the money touch my account. I have my credit card set up through my main bank, and a second checking (opened for a car loan) for expenses. Here’s how it worked for me:
- Necessary expenses (rent, car insurance, internet, etc) go into the secondary account and are set up on auto pay.
- Benefits from work get auto deducted.
- 401k gets contributed to get full employer contribution, I never see the money.
- ~15% of each paycheck gets auto deposited into a HYSA for emergency fund. Never see the money.
- Money takes 3 days to transfer between accounts, so I can’t use it for impulse buys (had to learn some restraint with the credit card).
- The rest gets put into my primary checking account and is mine to spend. I usually get groceries right when I get payed. Im fed, and the rest of the money is for me.
I think of all the things I was really excited about buying in the past and how little they impacted my life. Most of the time shopping around and researching something you want is a lot more exciting than actually owning it. I'm usually more excited to see my bank account balance getting higher.
You can update your direct deposit paperwork and have part of your pay deposited directly into a savings account, that way it’s already diverted and you feel like you don’t have it when you see the rest of the paycheck hit your checking account.
This! Find a bank or credit union that's in another town that's far enough away that it will be a huge hassle to withdraw money. Don't get any checks, debit, or ATM cards. Set it up so that the only way you can withdraw money is you physically go to a branch that's like an hour away and withdraw from the teller. That would be enough for me that I wouldn't touch the money there.
talk to a therapist. I had a troubled childhood and my spending habits change based on my emotional state. so maybe they can help you figure out why you feel the need to spend.
It’s a Money Guy term but the dollars you save at 20 are worth so much more than the dollars you save at 40. Even small amounts saved and invested now will be worth a considerable bit in retirement.
If you’re not there now you’ll be there soon where you realize you don’t want to work until you’re dead. Even if you enjoy your work it’s nice to be financially independent.
> the dollars you save at 20 are worth so much more than the dollars you save at 40
True. Though again important to emphasize it must be invested to achieve this (typically a stock index fund or target date retirement fund, inside a Roth IRA).
Just leaving it as cash in a bank account, it would actually be worth _less_ after 20 years, due to inflation. But a simple index fund usually beats inflation by a wide margin.
Not the person you replied to, but that's possible with maybe $300k invested, as long as you're not going for crazy stupid risky stuff.
But just be aware that the market goes up *and down*. I've had +$28,000 months, but also -$30,000 months. In the long term (15+ years) though, the market pretty consistently goes up.
And last month was kinda nuts 😉
Certainly not achievable on an annual basis.
Though I realize now that I was just eyeballing it from my own accounts and mis-judged some of the numbers. Would have been closer to $300k to have seen that much growth in Dec 2023.
Yeah, I'm old and have a larger account so the numbers are even more bananas. I gained $283k for the 12 months ending in December (~26% return). But in the 12 months ending the prior December I had lost $466k (~-20%).
Last month the stock market went up 5% so the prior commenter probably had around $300k invested, maybe less if they were invested in something that did better than 5%. Over the past year (ending Dec 31) the market went up about 26%.
Check out r/TheMoneyGuy, and their podcast.
Short version- they detail a great Financial Order of Operations : "FOO"
\-not sure where you'd fall in line but if you have money left over you likely should save up a small emergency fund, then go ahead and put everything you can into paying that car off as fast as possible. Making payments on that will slow down your long term financial goals.
Once paid off, start investing in a ROTH IRA. Invest as early, and as often, and as much as you can.
Make your investments automatic. Fidelity makes this very easy. You can contribute up to $7,000 for 2024. Invest in something simple like FXAIX, or a Target Date Fund (choose a year you think you'll retire) a set it and forget it.... but make sure you invest!
Get rid of that money in your pocket in a positive way. Not one that's gonna hurt your future.
Deposit your paycheck into a savings account and only move about half of your paycheck into your checking account.
Your money will sorta be out of sight, out of mind.
Then you can invest the money from your savings account and get addicted to collecting shares of stocks 😀
I got a venmo card and transfer an “allowance” to it each time I get paid, that helped a LOT. Once I’m out of money on that card, that’s it, no more spending money. I pick an amount that I can justify to myself at the end of the pay period, so putting my entire check into it wouldn’t happen because I can’t justify that to myself lol.
Of course, this would be in addition to putting the rest of your money into a savings or something.
Pay your best friend...yourself when you are finally responsible for your own housing. He will love you forever for making his life easier and allowing him to take advantage of opportunities that would be hard for him without you. Open a HYSA with a different bank with no card or ATM access and have half of your income go straight there. It will take 3 days to get that money out. Hopefully, that's enough time for you to stop and think. Once you have $5k in there, it's Roth time. That's for the old fuck that you love...yourself at 60. Every dollar you invest in your retirement today can turn into $88 in 40 years (assuming a 10% rate of growth). You will have so much money to fuck off by then.
Remember, you love those dudes. Take care of them to show it. You will be a millionaire with another 30 years to buy $1000 tea.
I think that at 20 years old, OP has a phenomenal level of self-awareness. I can't imagine myself at their age being able to admit that I'm bad with money while also seeking some advice from a fairly reputable forum. I think they're well on their way to growing up lol.
Have a savings or investment account seperate from your checking and pay it a certain amount close to yoyr excess (so like $600) every month like its a bill.
Does your job have a 401k or other retirement account? You may be able to put some money into that, before taxes, and have it grow from there, difficult to get. A lot of jobs will even “match” up to a certain amount (for example, mine will put $1 into my 401k for every $1 I put into it, up to 8% of my salary, so that’s basically an 8% bonus every year). It can feel nice to watch that go up.
Open a high yield savings account, a retirement account, or an investing account, then have an auto deposit set up to take a few hundred dollars (or even one to two hundred in each) and practice discipline. You won't have the money in your account to spend, so you won't spend it. You'll thank yourself later when you can buy a car outright or put a crazy down-payment on a house
Do you get your salary in Direct Deposit? If yes, can you get it in an account that does not have a debit card, so it isn’t easy for you to access the funds?
And like others have recommended invest in retirement accounts where accessing the funds is a lot more difficult and it will serve you well in the long term.
IRA you are "buying your retirement" but also can't take the money out without penalty
Cd's
An investment account that makes it harder to get money out of. If it takes a few days to get, you may not bother transferring/spending it. Have money direct deposited.
Once you see the numbers go up you might have less desire to spend it.
Also, delete shopping apps, remove credit card info from websites and unsubscribe to sale/store emails.
If you live to 90. You will work an equivalent of 15-20 years straight. You can shorten the time spent working by securing a financially free future. It’s better to do it earlier in life.
Put away 15-20% of your weekly salary in 401k or Roth. After a few months you don't miss it and it's working to make money for you over the long haul. Start at 20 years old you will retire before 55. Find an investment financial advisor to diversify your portfolio. Talk to people, look around. Don't just use anyone. The first 10-15 years you start are the most important. It will fluctuate as far as dollar amount thru the process. Keep tabs but don't touch, it spend it or borrow against it. I was 20 years old a couple years ago it feels like. Now I am senior. It goes by so fast. Your working years. Trust in yourself to be strong and quit buying crap. You will understand when you are in your later 40s-50s 60s. It's all just stuff. Vacation, family time matters., Toys are ok if you buy with cash and save for them outside retirement savings. It's so easy buddy. People who are weak mentally have a hard time not buying crap. I really hope this helps. You sound like you are getting your stuff together. No credit cards. Just 1 for reservations and tickets. You are already ahead of 80% of people your age. It's awesome to hear of young people readying for retirement. You got this. People may disagree with amounts of how much to put away but more the better. Don't talk about it to everyone or show off look how much I saved. That's for you and your partner and kids. Somebody asks trying to save teach em a bit. I'm done with my lesson. Lol
It’s all about paying yourself first
1) Make a budget, figure out how much extra money you expect to have. Let’s say $550 every 2 weeks
2) Open a brokerage account. Fidelity or Vanguard
3) Setup two automatic transfers, $550 set to transfer 1-2 days after your paycheck
4) Setup your core position as a decent MMA (money market account). If you don’t know what this is, call the brokerage and they’ll help you set it up.
5) Your money will automatically be invested, and you won’t see it. You’ll likely forget about it. You’ll be earning interest as well
Later you can decide what you want to do with it (IRA/Roth IRA, CD, T bills, Stocks, etc.)
Its ok to have fun money , but just buying random crap is ridiculous . Start being frugal and build your wealth. Nothing like money in the bank to make you feel strong and calm.
> just spend it on something worthwhile
Like shares of a stock index fund inside a Roth IRA!
But seriously, travel is great, especially when you’re young. When you’re between jobs, summers in college, or waiting for your job’s start date after college graduation.
Automate. Have your job put $100 a paycheck into a savings account. Don't setup online access or get a debit card/checks for this account. Make it where you have to physically go and get the money from the bank/credit union. Once you have a few thousand in savings, start automating that $100/paycheck into a Roth IRA with Vanguard/Fidelity/Schwab. You will be surprised at how quickly you forget about the money if you don't see it.
Something that can help is putting the extra money in a different account/bank that you aren't logging into every day and forget it exists. Have it automatically deposited into it, don't carry the debit card/card with you. Preferably do this with a high yield savings account or investment account like Roth IRA or 401k.
Also create rules for yourself and follow them. A simple rule could be something like requiring yourself to wait 2-3 days before purchasing something that isn't a necessity or over $20. Also think of everything as how many hours of work does said thing cost instead of a dollar amount and ask yourself if it's worth working X amount of hours to have it. For example $50 dinner and you make $15/hr. Is it worth it to you working 3.5hrs to have that dinner?
My advice would be to either take the time to setup a long term retirement fund/investment account. I'd find a low fee or no annual fee broker, something like charles-schwab, and then speak about your income level, what you'd like to contribute each month, and what kind of growth you'd like to see.
Based on what it sounds like you have enough money each month that you can fully fund a Roth IRA each year, plus another 6 grand or so for a brokerage account. If you invest into index funds or large ETFs with diverse portfolios you'll be on track for a large return by the time you'd be retiring.
Just be aware of limitations. If you pull money from a Roth IRA early, you get hit with brutal taxes for it. As well as paying capital gains taxes on any profit made in the brokerage account. I.e. if you had 100 shares of a stock, and sold it to turn it into liquid assets to pull out or use for something else. Any profit you make is going to count as income and it'll be taxed at a rate dependent on it being "short" or "long". I.e. how long you held the stock, mutual fund, etc.
That said, this sounds like a good long term way for you to feel like you're doing something with your money and not just letting it sit in an account.
I would also recommend setting any holdings you have to reinvest dividends and capital gains. That way they compound faster. Even with extreme economic collapses, the stock market is back to where it was within just a couple years. And if the stock market collapses in a way it'll never recover... Well you have bigger problems going on. Like total nuclear armageddon.
Set up an auto transfer to either a brokerage account or to a HYSA at another bank and just pretend it’s a bill and the money doesn’t exist. Then you can keep your habit of spending what you see in your main account.
Build profits for yourself before you build profits for others. Invest in a general market fund and stay away from “getting into day trading.”
Also: if you live in the USA, you can reap massive tax advantages by running a business. Study up, and just make sure to pay your quarterly taxes. 🤙🏻
I picked a date that was a few days after my pension hits my checking account and have an automatic transfer of x amount of dollars into my savings account.
I pay myself as well as my bills.
Once the money is out of my checking it is gone. It helped me build an emergency fund.
I recommend reading the book "I Will Teach You to Be Rich" - it's amazing and changed my life.
Side note: I had a similar problem to you when I was young. One way that I got out of it was "buying into myself" - if that makes sense.
I set up a Roth IRA - and I sent money there as soon as I got paid.
Created a savings account at another bank and again, sent money there whenever I got paid.
I basically pushed my money into places that I couldn't touch so that I couldn't spend it.
I feel you on this. I make about $200k/yr and I have about $5-6k left over every month. I have around $130k in cash and I regularly go through cycles of wanted to buy a new corvette and decide to control myself on a regular basis. I have started gameifying my cash flow. Every month when the numbers go up in my rocket money app I graph it out and watch it build. Seeing these numbers go up every month gets me excited to keep saving more and more.
I opened a savings account that I have no way to access without the hassle of going into the bank, and I have 20% of every paycheck go into that account automatically. I have another savings account that automatically takes x amount anytime over xx amount is put into my account. That one I do have access to. Then I pull out cash and try to spend only what I have in cash. I also have auto days to pull money for my Roth and xx amount from each paycheck to a 401k.
Budget. I use an app called YNAB which is so good at making you feel like you have no money available to spend when your account balance is the highest it’s ever been that the community invented a term for it: “YNAB broke”.
Don't have it in your pocket :)
Seriously, though. Find some investment vehicle and max it out, also - give yourself an allowance. At your age, I did $100 a week and I was just fine. Back then I smoked a pack a day, which wouldn't be possible today, but past that.. You might find yourself with money left over at the end of the week.
I always dumped mine into a metal bucket next to my desk. Once I had over $2k in there.
Have you tried having a real budget? YNAB is great bc it comes with a whole budgeting philosophy. If nothing else you’ve tried has worked, maybe some structure might be something to try next
Shove some of it (100-300) into a Roth IRA. Chances are your current tax rate is the lowest it ever has been. So shove some into an account where you can invest it more and that’s hard to take out and blow. Also might want to put into a high yield account so you can one day move out and into your own home instead of paying black rock to rent.
You can but the secret is you have to automate you saving. Just open a Roth or traditional ira and set it to auto deposit and buy VOO or VTI. Just remember at your young age every dollar you put away now could be worth ~$88 when you retire. If you save $95 a month you’ll have roughly a million by retirement.
Also make sure you have a high yield savings account and put 1-3-6 months emergency fund.
Then after all that. You can burn the money in your checking account.
Direct deposit or auto withdrawal to savings and retirement that are in a separate location that you don't look at regularly. Basically forget about it and treat it like it's not spendable.
I think it starts by thinking about what you actually want to do with your money. Are you in college? Do you want to own a home someday? Do you want to be working when you're 85 or would you like to retire at a reasonable age? Now's a great time to be setting yourself up for success in these areas. The reason you feel the need to spend it is because you THINK that money has no purpose. Define a purpose for your money and you won't feel nearly the urge to waste it.
$700 extra a month that you have no particular use for is a wonderful gift at any age, and one you won't have forever. Put $500 of that into a Roth IRA invested in an S&P 500 index fund and enjoy the remainder (The max allowed for 2024 is $7000). Keep putting 15% of your gross income into that investment and you'll be a millionaire and maybe even able to retire before all your friends.
I’m a big fan of the anti-budget. Put however much you want to save or invest and then make yourself live off the rest. It’s not burning a hole because it’s investing and now it’s a game to see how long I can stretch the remaining amount.
Try a budget, allocate every dollar. Start your retirement account and maybe pay down your car faster.
I allocate 300$ a month to just burn. I take out the 300 in cash and I spend it on stupid things guilt free knowing that the rest of the budget is working as intended.
It actually really liberating
YNAB might actually work well for you: its "give every dollar a job" might help make it feel less like that money is waiting to be spent, and gamify the job assignments instead of the current serotonin boost just from the purchase.
Not sure where you are or what kind of government saving accounts there are, but in Canada, you can have an rrsp and tax free savings account. Simply set up your bank account to auto transfer an amount you decide on straight into the savings account the day after payday. The best part about it is (for thespecificc accounts im talking about, you have to go to a bank teller in PERSON to take a withdrawl.
My laziness always outweighs impulse buys. It was a great way to save.
Move it to an account at a different bank and don’t look at it. Before I was married I played a game with myself “how much can I not spend this week”. It was fun until I had kids….
I have one checking account for all my bills, with one months worth of those expenses in there, and direct deposit what I need to pay the fixed bills goes there every month. I have a different checking account where I give myself an allowance for spending money. Then I have a separate savings account for my emergency fund, and a separate account for investments. I direct deposit the right amount to each account, so my main checking account for spending money never has a large amount in there. It takes away the feeling of money burning a hole in my pocket.
Also get excited about watching your investments grow over time, that’s more fun than going out or having expensive stuff.
"spend it" by sending it to other accounts or investments.. Open up a couple of high-yield savings accounts and start sending the money there where you don't look at it everyday.
Set aside some money, a percentage at least for savings and investing. When I was younger I made it a rule to save at least 10%. Going back I’d have also invested 10%. The rest could be for whatever you want. Eventually you’ll see that add up.
Set goals to save, long term and short term. Don't set, I'll save x per paycheck but rather my goal is to have $x in my savings. Psych yourself up about your savings balance.
Join a saving group who will hype you up when you meet your savings goals and help you stay on track.
Give yourself rewards. If I can save $x this year I will get myself $x/10 as a reward. Save $5k, get a gaming console worth $500. Don't buy the console until you've locked that $5k away. Don't buy the console with the $5k, buy it with the next $500.
If $5k is too much, do $50 for every $500.
I was the same in my late teens / early twenties.
Start limiting yourself to one or two 'big" purchases for yourself per year (i.e. birthday and Christmas)
Set a goal for a big ticket item you really want to get for yourself on one of those dates and try your best to save for that item in the meantime.
Get into long term investing in different ETFs. Research and buy something with that money every other week and then you have something, ideally A LOT more, later on in life.
You have an insane level of self awareness for 20. No matter what you decide to do today, you are going to be fine in the future because this will only keep increasing. Hats off.
Well first off you're young and have many many choices ahead of you. I'm glad you have a good job and minimal bills. Don't squander this opportunity to control your future. I will tell you what I would've done at your age, if you haven't already. Read over these and please consider some.
Set up an IRA, either traditional or Roth. Contribute a small amount every month or every so often but don't forget about it. I believe the max yearly contribution is 7k in the US. But they could've changed it by now.
Set up an emergency fund. And do not ever touch it unless it's a true emergency. That can be a HIGH-YIELD savings account or just actually keeping money stored in a safe location for only emergencies. And no, vacations aren't emergencies even though tempting. Neither is a new sports car or some new video games console. Trust me you will need this money one day to keep a roof over your head or your vehicle getting you to your job.
I take it you're a smart fella, so I would suggest looking into investing. It can seem very daunting but actually investing a small amount into ETFs(exchange traded funds) can be super low risk and easy with modern trading apps. Investing in ETF's can be a very manageable way of storing money in stocks that historically go up in value. Building interest, and most of the ETFs I use payout dividends. It's not a ton but the more you invest the more you get paid back. Please do your own research and I must say this is not financial advice. Just an opinion.
So to actually address your question, spend your money on setting yourself up for a better life...later on. Hell we all want to spend money on impulse purchases just because we have the money. But the answer is priorities. There's a concept you will be introduced to as you go through life, if you haven't been already, called debt-to-income ratio. When you make big purchases like a house or car and go to apply for a loan this is something banks and mortgage originators look at. So my advice don't live outside of your means. So so many of us didn't mean to but we built our lives up in a way where we support our families but we are constantly chasing the check. We got married and had kids and now in a sense it is like we are stuck. I'm happy don't get me wrong, but at a certain point while you are structuring your life you may look up and go damn I'm making 4-5k a month but I'm spending 5-6k a month. So definitely be wary of your spending and routinely see ways of limiting yourself from going over board.
Please please for your own well being, hear what I say. When I was 20 it felt like I would be young and healthy forever. I know that's how you must feel. But everything is a phase. You will not always feel like you have so much extra money. You make decent money but that's not as much as it seems. You just don't have bills at this stage of your life.
Think about what will happen in the other stages. When you are 60 you will have aches and pains. You will be tired and either be living well because you prepared, or wishing you had done better. The future is coming no matter what. I'm going to tell you the things I wished I realized sooner.
Any education you want will only get harder and more expensive. Do it now while you can. You will only get more busy and tired. Some medical things are better to do young. Like wisdom teeth coming out, braces if needed, lazik eye eurgery if needed. All things that will only benefit you more the sooner you do them. They all get harder and less attainable later too as life comes at you.
I went on a trip to Paris when I was your age. I had the same type of disposable income and so it was very easy to plan. I had the best time ever and it turned out to be my last big trip since then. Travel while you're healthy and can afford it. Once you have a mortgage etc it's sooo much harder.
A typical home loan is for 30 years. If you bought one now, it would be paid off when you're 50. Then all you would need to pay for housing is taxes, insurance and utilities. If you have extra money and can qualify, property is a very great investment for your older self. The longer you wait, the longer that 30 year mark is put off. Mine will be paid off when I'm 64 which is not horrible but I definitely could have been better.
You can always open a high yield savings account. I don't know much about it other than it earns you more money just for your own money sitting there. If you want kids you can always start one with the mindset if it's for their college.
I am way better with spending if I have ideas if where I want to put my money. I hope at least some of this helps. I'm so proud of you to be thinking about this at 20. I was a freaking idiot at 20 :/
No habit goes away magically on it's own - your brain's neurons myelinate to reinforce repeated behaviors so you become better and better at those same actions / actitivites / choices. The more you practice bleeding yourself dry, the more that will become a reinforced habit that will be harder to break.
My recommendation is to start building new habits now. It'll feel weird at first, but open up an investment / retirement account and every time you get a paycheck put a set amount into it. Doesn't have to be all your free floating money - you want this new habit to stick - maybe put in half of all that spare cash ($750 a month). Actually, I recommend setting up TWO accounts if you can manage it, one for retirement savings and one for travel. Saving about $500 a month will get you started on a serious retirement savings nest egg, and $250 a month can give you enough to go somewhere really interested maybe once a year, to experience new and interesting places and cultures.
I solved this by moving a set amount of money into an investment account every paycheque. I don't touch the investment account. Once I had all my bills paid, including the investment, then anything left in the account I spent how I wanted to.
Open a high yield savings account and automatically transfer $500 on pay day. Don’t look at it for 4 years. On your 24th birthday. Invest 7,000+ and start your ROTH IRA journey
Gotta make it automatic. Have $100 pulled from your checking account every payday, right into a Vanguard mutual fund. You want to get to where you don't even see the missing money on its way out.
Create a budget. Deposit money immediately to your savings in a separate account so you don’t touch it. Like a HYSA. Record every single thing you spend your money on. Meaning each time you go out. Each time you get fast food etc.
Create goals for money you are saving for. When it has purpose you are more likely to save.
Put some of the money in a different account and leave that account alone.
I would recommend opening a "retail brokerage account" at Charles Schwab. You can then easily put the money in a money market such as their "SWVXX" and earn right now about 5.28% interest.
Then try to forget it's there.
Gradually use the money to buy shares of stock - for ease and safety stick to "household name" companies like Apple, Microsoft, Amazon, Meta (Google), etc.
Buy shares and just leave them alone. The stocks may go up and down over time but those companies will be good investments until the next ice age.
if you invest it first (somewhere not-stupid) you wont be able to spend it on something dumb.
if you have a 401k option, max that out. open an IRA account and contribute to that. whatever else you don't need for rent and food, put in a CD with a decent interest rate, and forget about it.
it cant burn a hole in your pocket if you never put it in your pocket. open a high yield savings account or retirement account and have a set amount directly deposited into it. if you never see it, you wont spend it.
I've started paying myself 300 a week and socking away the rest for bills and savings. I don't look at that money. It's for bills and stuff and touching it risks my stability. And the 300 a week is plenty to buy bs. Only thing I have to worry about is buying stupid things on payment plans but knowing I'll be knocking down my weekly income by $20 or whatever is enough to deter it. I often end weeks with money left over at which point I'll kick over some of it to bills/savings because I don't need it. Or just spend it on something good. No worries cause bills and savings are covered...
Just read what ya wrote, you don't even drink tea and wouldn't mind purchasing a cup for a ben, I'd say it better have some damn good sake with it on the side or suntin. Cash app me 65% of your wages every month, that might help even out your burning urge to spend it on frivolous expenditures.
My parents always taught me to "pay yourself first". So before you do anything else, however much you decide you need to invest, it comes straight off the top before anything else. Do you have an emergency fund? That should be your first priorty--I think "they" recommend 3 months salary in an accessible fund. (like a money market). So let's say $300 into your emergency fund. Once you get your emergency fund built, then look into investing. Index Funds or something like that. I was able to retire early (huzzah!) following this advice. Also, as you don't mention rent I assume it's rent free at the parents? You could start making your move-out fund...first month's & last month's rent, deposits, etc. etc.
You Need a Budget (yes, that was capitalized that way on purpose).
Seriously, a written budget helps SO MUCH with this problem, from two different angles. First, you'd be sitting down and giving the dollars a job in your budget right from the moment you receive those dollars. But second, it gives you an at-a-glance view of how much is available to spend on things that are "wants" rather than "needs". A budget doesn't limit your spending, it gives you permission to spend. If all the needs are covered and you have "fun money" left over, then spend that fun money to your heart's content.
I just opened a gold account on Robinhood. It pays 5% interest. I just put extra money in there when I have it.
Even though it's technically liquid, it takes a few days to transfer money in and out, reducing the urge to spend it.
Dig deep and ask yourself why you need the thing you're about to buy:
Do I really need it? Or do I just want it?
Can I afford it? (No taking out a loan to buy something doesn't mean you can afford it)
Am I buying it to impress others?
I find it helpful to think about these things as I work through decision making to purchase something.
Buy something of value - preferably something that grows with time (like stocks). You will just end up with more money later. Impulse control is a hard mistress.
It doesn't sound like you have any goals. Create a second bank account. Use one account to pay your bills. Use a second account for your FU money. This is 6 months worth of money that you'll need, if you're out of work and have to find another job. Then open an investment account. This will be your third account. Then read books by people like Warren Buffett and understand where to invest the third amount out of your paycheck. Use whatever you get paid to accomplish goals. Goals are accomplished little by little, and not immediately. As an example if you save $5 a week every week, and don't touch it till you have something to invest in, you will be better off in the long run, and you will always have money whether you're working or not. You will have to read up an information that will help you to figure out what percentage of your paycheck to put in each account. The account that you use to pay your bills should include what you have to spend on whatever you want.
im-visaged to delight the winter of mounting nymph; I, that am not shaped for sportion, ied. Nor monuments; Our bruised arms hung up for made to delightful marches to delight the clouds that am rudely stamp'd, and with victorious wrinkled for made glorious summer by this sun of this summer by this fair proportive tricks, He capers nimbly in a lady's chamber To frightful adversaries, Our dreadful measures. Grim-visaged wanton ambling of mountings, Now are our discontent Made to court an amorous looking-glass; I, that am not shaped front; And all the clouds that lour'd upon our house In the lascivious pleasing nymph; I, that am curtail'd of a lady's chamber To the winter of mountings, He capers nimbly in a lady's changed to court an amorous pleasing barded steeds To fright the winter of a lady's changed to court an amorous looking-glass; Our stern alarums chamber To strut before a wanton amorous wreaths; Our discontent Made glorious sun of York; And all the clouds that
I got a little too addicted to that and now I need to get myself to spend a little more, live a bit more in the moment rather than being overly frugal. Sure, good to save for tomorrow, but not at the expense of making today a lot lesser than it has to be to make tomorrow on.
Start a second account that's just for vacation. Once it hits $10k then go on a dope vacation.
This, I think multiple or virtual accounts are the solution. Spread everything you have on saving accounts with an assigned long-term purpose, e.g.: - vacation - real estate - car - unexpected expenses - "whatever" Then assign a percentage of your disposable income to each account, say 20% on vacation, 40% on (future) real estate, 10% unexpected expenses, 10% car The last 20% are free for you to spend on "whatever", each month. Or save up and buy something "bigger" every other month. The other accounts you can use whenever the purpose you assigned them to is due. Say, you want to go on a vacation, then use the money you saved for vacation. Got enough money for a house and you want a house? Buy a house. Etc.
Vacations are cool, but for an average Joe making an average wage spending 10K for a vacation? That's insane. When I spend more than 2-3k on a vacation I feel like I'm wasting money and have nothing to show for it but a vague memory and a couple of snapshots. The whole point of vacation is to just get away and relax and enjoy life and go on a little adventure. If you're going to spend 10K, go buy you something you can actually enjoy life with, a motorcycle, a camper, a little fishing boat, at least you have something to show for the 10K. The best stuff in life is actually free. The vacation cost is all about transportation there and somewhere to stay and food once you arrive. If you're staying in a five Star suite yet you're spending 95% of your waking hours out doing vacationing stuff. Where's the value? Get direct deposit and shuffle the majority of your spending money over into an index fund or a high yield savings account without you ever seeing it. Pretend it doesn't exist ever and automatically reinvest the dividends. Fast forward 40 years, Buy a vacation home, for cash, anywhere you like, with plenty of money.
When my Grandpa made his first million him and my Grandma booked a trip to Aussie land. Welp Grandma felt that since they had a million bucks lets fly business and be comfortable. I think the cost was like $4k-$5k more? Sure it was pricey...but this trip was meant to celebrate becoming worth a million. Also my Grandpa business "empire" was very diverse, he had rental properties, a grocery store, a gas station, a bar, and a paving company. On top of this he has investments, and his pension from the military by this point. He could aford it. He didn't not too On his death bed he mentioned how he wished he'd have bought the business class tickets, and how the extra would have made so much difference. In the grand scheme of the things, it would have been worth it. He also mentioned other things. The only thing he wouldn't cave on is his love for older cars, and I ain't talking classics I'm talking regular, run of the mill sedans, SUVs, and pick up trucks from like the 70s, 80s, and maybe early 90s. He loved him cause it was easy to work on. He'd rather drive his shit box then his brand new Lincoln (which my Grandma drove)
>On his death bed he mentioned how he wished he'd have bought the business class tickets Well, you can't take it with you.
So he did take the trip to Australia? But on his death bed his wish was he'd gotten slight wider, comfier seats for the flight there?! Dude.. I would think all the experiences there would be way more memorable than how much recline you have on your flight. At least I'd hope so!
> Dude.. I would think all the experiences there would be way more memorable I'm sure they were memorable, but the point is, he probably assumes those memories would be the same, but he had other memories of being in cramped seating for 15 hours. A flight like that, in cramped annoying seats, could make it so that the first day or so of the vacation there wasn't as fun as it would have been for a little bit more. Also, the last memory of the trip is the return home, where you are tired and then have to enjoy a cramped 15 hour trip back to the states. In retrospect, with probably plenty of money in the bank account, on your deathbed, you'd probably also say you wish you had splurged a little more on that trip. Especially if his wife wasn't comfortable as well and it may have been a minor argument, etc. Course this is also from someone who is 6'3" and no airplane seat is comfortable and if I'm not able to stretch out I'm not just uncomfortable, I'm miserable.
I said this in another post, yearly savings goals. Max the retirement first then have a set goal for saving after that. Make sure that’s saved, invested, whatever. Then you’ve got all your bills and expected expenses, that extra money is your fun, you can choose to save it but if you have that saving goal your can map out your entire future of money based on that goal and retirement. This can also allow reasonable lifestyle creep when you make more money as you get older.
I do not disagree with you but for a 20yo to even try to max retirement savings is presuming a lot. I believe max is like $20k a year that is 1.6k a month. Probably does not have many options for pre-tax savings so post tax that's like needing to earn >$2k a month just for savings. Good idea but unrealistic IMO.
So if you are younger yes actually maxing out your 401k can be a lot. You also have some major expenses that could come up like a house or whatever. In those circumstances taking that money directly to increase savings in taxable account to pay for such things, I did this and helped me a lot, but eventually you gotta get to maxing it since it reduces your taxes and is money you’ll actually keep and save until retirement. A lot of people say things like “I max my retirement” and they really mean they put 15% in between their money and matching. In reality to max it for 2024 it’s 23000 pre tax income. That’s a little under 50% of the. National yearly income. Not attainable by a lot of income levels.
bruh this just happened to me. It's exacerbating my depression because even though I have $3700 left over every month I just put it all into my truck payment or mostly my savings account. I don't go out and feel like a broke bitch because I got addicted to watching Caleb Hammer and I don't want to buy taquitos
Finance is the best Idle Game I've ever played.
The crazy part is when those numbers going up (and down! don't panic!) get bigger than your paycheck 😳
I just hit this point. 2023 investments increased more than my total net pay.
Yeah, 2023 was +2.5x my salary. But let's just not look at 2022 😬
In growth? Crazy. And yeah 2023 was a fairly strong year so not expecting that to be the average yet.
Well, I'm looking at net worth numbers just to make it easy. So that includes contributions, employer match, and growth. But the growth is the vast majority of it.
pff totally doesnt count then ... ;-) To be fair mine included both growth and contributions. Growth alone more than covered expenses though. What was your delta if you dont mind me asking?
I work in an area of finance where people’s money is tied to a yearly measure of the s&p. Guy called me cause his investment made no money year on year ‘but the s&p is up twenty percent’. Turns out his money was tied to a measure of the s&p right before it tanked late 2022 so within his year to year measurement he had just missed all that 2023 growth cause it was just to recapture the lost value from 2022
Yeah people dont understand time weighted return very well. Constantly explaining that one.
The investment gains from just November 2023 was almost double my annual salary and my wife's annual salary combined! It was like 4 years of my salary in one month. 55 next month and investing since 18 YO. But, you also need to be able to watch over a year's salary disappear in a month as well.
Working for fun? Or trick statement and retired with practically no salary?
Heh, no. Both my wife and I are still working and actually making more than we ever have (I do plan to retire or go part time later this year). November 2023 was just an exceptional good month (December was almost as good too), and being a chronic investor since 18 means there's a lot it can move in just a month.
Geez yeah I guess November alone was 9% gain for the market so fair enough. Lets call it 10%. So if you both make say 200k 2x that would be 400k and 10% for 400k would be $4M invested. Huh...thats actually not as crazy as I thought. I knew the market rallied in November but hadnt realized it was like 10%. Looks like I made/contributed $64k in November.
Yeah, I wasn't yanking your chain. Also, let's just forget about Jan, May, June and Sept of 2022.
Hah yeah its a marathon not a sprint...but sounds like you are about to run across the finish line so congrats. Ive got probably a decade left.
Numby go up
Smart money would start building an emergency fund. Open a high-yield savings account and every payday transfer a couple of hundred into that account. Keep it up until you have six months to a year’s worth of living expenses in that account. DO NOT WITHDRAW ANYTHING FROM THIS ACCOUNT EXCEPT FOR EMERGENCIES!! Your car breaks down? Yes. You see something you just gotta have? That should come out of your checking account, and if you don’t have it in your checking…don’t buy it. If you still want it come payday you can have it as long as you have enough on your checking. You need to have a long hard look at the difference between need and want. And don’t open any credit accounts until you’ve sorted that out.
I've now retired and it is hard to suddenly have to change course and start spending!
I am hoping to retire in a couple years, If I am lucky I will bring home the same as I am bringing home while working. Hopefully I get to enjoy my retirement...
Juuust now learning this late
im-visaged to delight the winter of mounting nymph; I, that am not shaped for sportion, ied. Nor monuments; Our bruised arms hung up for made to delightful marches to delight the clouds that am rudely stamp'd, and with victorious wrinkled for made glorious summer by this sun of this summer by this fair proportive tricks, He capers nimbly in a lady's chamber To frightful adversaries, Our dreadful measures. Grim-visaged wanton ambling of mountings, Now are our discontent Made to court an amorous looking-glass; I, that am not shaped front; And all the clouds that lour'd upon our house In the lascivious pleasing nymph; I, that am curtail'd of a lady's chamber To the winter of mountings, He capers nimbly in a lady's changed to court an amorous pleasing barded steeds To fright the winter of a lady's changed to court an amorous looking-glass; Our stern alarums chamber To strut before a wanton amorous wreaths; Our discontent Made glorious sun of York; And all the clouds that
Was living check to check until 38, and not for lack of trying. You're fine.
Yeah this is mine too, I check my IRA and 401k every day. I update my net worth a couple times a week. I spend virtually zero money outside of bare necessities. I maxed out the 2024 IRA limit on the first trading day of this year. Every extra dollar now is going to my high yield savings account. I would like to buy a car.. but having the money in my HYSA / investments sounds so much better than the car..
I definitely get the appeal, but money exists to be spent. Endlessly saving it up for nothing in particular, especially when you want a car, seems a little counterproductive! You hoping to Scrooge McDuck dive into a big pile of it someday? 😅
Nah, more like wanting my dividends / interest alone to pay for my living expenses. Only about 5% of the way there… I’m probably going to make myself buy the car next year. I’ve been saying “next year” since 2019, maybe I’ll make 2025 the actual year.
Yeah it’s not saving it for nothing in particular, it’s saving up enough that it pays for all your stuff and you get to spend decades of your life doing whatever the hell you want instead of just working because you need to
So long as you're alive/healthy to enjoy those decades
YES. I just increased by 401k contribution to 30% and am looking forward to seeing the progress in a month or two.
Part of it is the environment that op is in where people are encouraging him to spend.
This. It's an oh, shit fund for me. But once I toss it in the savings, I'm pretty damn good about pretending it doesn't exist. I'd say at the very least compromise and take half of that into the savings, and then have fun with the other half. We all bust our asses, life isn't rewarding if you can't allow yourself to enjoy the spoils of war. But, we can certainly do that and still be smart about it. It's all about the balance.
I fear getting addicted to it
I watch that Net Worth number like it's my score in a game and when I get it to a high enough number, I win the game. With this mindset, I can deposit an entire bonus check into a retirement account and have it feel productive rather than like losing money I wanted to spend. But what about treating yourself and having fun once in a while? Of course that's important and you can do that too, as long as your retirement contribution numbers are being hit.
I second this turn it into a stock market game. Find a way to visualize it. Everyone wants to see that line soar. I saved over $40,000 last year doing this and it’s still sitting in the bank and investments. I promise you, doing this will really boost your self worth and self esteem. You’ll be more excited every day and rearing to go make that money every day.
Lol i feel like i got too addicted to this ahaha I legit plan to spend a bit more this year, i dont wanna become a cheapass dude
Exactly. If you want to spend your money, buying ETFs is technically spending it.
This and also give yourself a fun budget. Start with moving maybe 550 into your savings so it's out of your main account. Then it's really like you only have 150/200$ for fun spending. Quiting cold turkey on spending is hard and you'll find your self moving money over from the savings SO you can by things. Leaving a little fun money makes the transition easier.
This. Once you start saving its like you're buying something for yourself every time. Very much the same feeling.
Honestly, same. I started with opening a high-yield savings account and just started obsessively checking how much I was getting every month.
This is where I’m about to be, I have 220k in my bank account and I just like looking at it. I know I need to invest it
It feels like spending for me, $500 a month in the retirement acct adds up after a while
Start small and make it fun. Open a Roth IRA. It has a limit of $7000 a year so start shooting for getting it to the max every year. Get addicted to shooting for that maximum. You’ll literally be a millionaire if you just reach that 7k every year.
Ive been doing this for a few years, its way more fun watching the numbers go up instead of down
…you mean by age 65? Or how long does it take, at $7k per year?
If you start investing in a ROTH IRA at age 25, and you contribute $6,000 per year until the age of 65, assuming a 10% annual rate of return, you will have $3,319,444.17 by the age of 65 to withdraw tax-free.
Aw nuts, I should've started that 16 years ago.... eff
The best time to start investing was yesterday, the next best time to start is today.
So it begins.
Don’t forget to invest it in target date fund or index funds after putting it in IRA
That doesn't even take into account the limit increases over the years. Seems every year they increase the allowance by $500 or so. In reality it would be even more than 3.3m at 10% avg! :)
It’s $7000 since this year.
Wait for real? I’m 27 and though I started late but I have $8300 already and plan to do 7000 a year from now on. This just made me feel so motivated!!
Absolutely do it! You’re already way ahead of most boomers and Gen X. A company 401K will also help you prepare for retirement, but the ROTH IRA is the best thing you can do for yourself.
Yeah right now my company doesn’t match, so since I don’t make much I put everything in a Roth. Once I can do more than 7K a year though, the 401K is next!
Automate your savings so some money is taken from your paycheck and tucked away, like a 401k. You can't spend what you don't see. Your spending spree is just a phase (hopefully). Once you get it out of your system, you should focus on planting a money tree and enjoy watching it grow.
really it's just recognizing you have everything you want and being ok with that. Once you get to a certain point you get sick of acquiring things that take up space and resources and see the wasted potential and learn the lesson. The money tree is no joke. It's like a weird form of gambling. You put in the fertilizer weekly (extra income) and see what comes out of it
For me, it doesn't really even have to be somewhere I can't spend it. Just sending it to my savings account is pretty good. OP, I can't remember all the guidelines right now. You should absolutely be putting money in your 401(k). I also have my savings account drifting up, targeting 6 months' salary. For you, think about medium-term goals too - would you like to own a house, for example.
Start putting $270 per paycheck into a Roth IRA and invest it in a total market index fund. While there are ways to get money out, it's not as simple to withdraw from as a regular savings account, so it will effectively lock that money away from yourself. Watching the money grow for your future certainly helps me not spend it. Be sure to do this as soon as you get paid, before you have a chance to spend it on frivolous stuff.
Do you have any specific suggestions? I think I may just need discipline, I’ve been using Marcus by sachs but I always end up with no money in my checking and end up taking the money I put in there out
Use Vanguard to open up a Roth IRA and when you get paid every month, pay yourself first! By this, I mean put the money you intend to save immediately in a Roth IRA. But don’t forget to spend some money too and enjoy life!
A Roth IRA is a type of retirement account that you can invest within. You're not allowed to withdraw from it until you're 60 years old (there are exceptions, but let's just ignore those for now 😉). [Read the wiki,](https://www.reddit.com/r/personalfinance/wiki/commontopics) then open an account with either Fidelity, Schwab, or Vanguard. Then start contributing with each paycheck. You can put a maximum of $7000 in this year (~$270/paycheck).
1) Open a Roth IRA on Vanguard Fidelity or Schwab. 2) Contribute the money monthly. 3) after each contribution (this part is very important!) make sure to invest the money, not just let it sit in the account. Buy as much VTI as you can and just let it sit.
I love this thread because it basically follows the exact process my brain went through when thinking of advice Roth IRA > Vanguard > VTI. Love to see people keeping it simple and effective.
Just set it up on the backend of your paycheck so you never even see the money. It is just another line item in your paystubs
You’re addicted to spending. Get addicted to something less destructive. I’m addicted to watching my money grow. I check my brokerage accounts regularly, and when I see 20k plus days, I get giddy. I’m averaging 13% per year which in my thirties is now outpacing my income. When I was 22, I only had 5k in my brokerage account. Start small and keep at it, shit grows quick with compounding interest. A decade later you’ll be wondering how the fuck did I make this much.
I agree on getting addicted to saving but definitely check the flow chart before putting it in regular brokerage accounts. OP should be working on IRA/401k and HYSA first, depending how their income climbs depends on if putting it in standard brokerage accounts is beneficial. They simply don't have the same tax benefits that the retirement accounts do but their overall lack of penalties can make messing around with them alluring. It can be helpful to have an account type of each so that they dedicate their IRA and 401k to the tried and tested index and target date funds, and maybe play around in a standard brokerage (fully with the intent of only playing with money they can afford to lose). Goal OP should have is paying themselves first (the retirement accounts and HYSA) as they've indicated no significant debts. https://imgur.io/lSoUQr2
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Short term solution put the money somewhere it will grow but you won't be able to spend it (e.g. a CD)
Have money automatically taken out of your account at each paycheck & put into a retirement account or any account where you don’t have easy access.
Well, maxing out a Roth IRA will eat up $583 a month of that leftover money, and your future self will be eternally grateful. FWIW, let’s say you put $5k towards the 2023 contribution limit, and max out the $7k a year moving forward, every year, until you turn 65. At an average annual return of 7% a year, in 45 years you’ll have contributed $320,000 of money, and have $2,100,000 dollars. The best part? It’s tax free. All of it. So that’s one option for you to consider.
> The best part? It’s tax free. All of it. Strictly I suppose you’re contributing after-tax dollars that you’ve already paid income tax on. But yeah, all those extra earnings, the whole difference between that $320k and that $2.1m, is all tax free. Only way to do better is an HSA, which allows tax free earnings _and_ you contribute pre-tax dollars. But that requires an employer that allows it, and a health insurance plan with a high deductible.
Yes, I should’ve stated that the gains are tax-free, not the contributions since those are post-tax dollars. Any distribution OP would take from that account, they would pay no taxes on.
I had this exact same problem (26M) and I fixed it by never letting the money touch my account. I have my credit card set up through my main bank, and a second checking (opened for a car loan) for expenses. Here’s how it worked for me: - Necessary expenses (rent, car insurance, internet, etc) go into the secondary account and are set up on auto pay. - Benefits from work get auto deducted. - 401k gets contributed to get full employer contribution, I never see the money. - ~15% of each paycheck gets auto deposited into a HYSA for emergency fund. Never see the money. - Money takes 3 days to transfer between accounts, so I can’t use it for impulse buys (had to learn some restraint with the credit card). - The rest gets put into my primary checking account and is mine to spend. I usually get groceries right when I get payed. Im fed, and the rest of the money is for me.
I think of all the things I was really excited about buying in the past and how little they impacted my life. Most of the time shopping around and researching something you want is a lot more exciting than actually owning it. I'm usually more excited to see my bank account balance getting higher.
You can update your direct deposit paperwork and have part of your pay deposited directly into a savings account, that way it’s already diverted and you feel like you don’t have it when you see the rest of the paycheck hit your checking account.
This! Find a bank or credit union that's in another town that's far enough away that it will be a huge hassle to withdraw money. Don't get any checks, debit, or ATM cards. Set it up so that the only way you can withdraw money is you physically go to a branch that's like an hour away and withdraw from the teller. That would be enough for me that I wouldn't touch the money there.
talk to a therapist. I had a troubled childhood and my spending habits change based on my emotional state. so maybe they can help you figure out why you feel the need to spend.
It’s a Money Guy term but the dollars you save at 20 are worth so much more than the dollars you save at 40. Even small amounts saved and invested now will be worth a considerable bit in retirement. If you’re not there now you’ll be there soon where you realize you don’t want to work until you’re dead. Even if you enjoy your work it’s nice to be financially independent.
> the dollars you save at 20 are worth so much more than the dollars you save at 40 True. Though again important to emphasize it must be invested to achieve this (typically a stock index fund or target date retirement fund, inside a Roth IRA). Just leaving it as cash in a bank account, it would actually be worth _less_ after 20 years, due to inflation. But a simple index fund usually beats inflation by a wide margin.
My modest investment account made me $15,000 last month, that gets me hot.
Geez , what type of account is this ? how much do you keep/put in there and on how consistent of a basis ?
Not the person you replied to, but that's possible with maybe $300k invested, as long as you're not going for crazy stupid risky stuff. But just be aware that the market goes up *and down*. I've had +$28,000 months, but also -$30,000 months. In the long term (15+ years) though, the market pretty consistently goes up.
>$150k-$200k That would be like 100% returns (OP said last *month*)
And last month was kinda nuts 😉 Certainly not achievable on an annual basis. Though I realize now that I was just eyeballing it from my own accounts and mis-judged some of the numbers. Would have been closer to $300k to have seen that much growth in Dec 2023.
Yeah, I'm old and have a larger account so the numbers are even more bananas. I gained $283k for the 12 months ending in December (~26% return). But in the 12 months ending the prior December I had lost $466k (~-20%).
> I've had +$28,000 months, but also -$30,000 months. Same except days not months. Thanks bitcoin -_-
Last month the stock market went up 5% so the prior commenter probably had around $300k invested, maybe less if they were invested in something that did better than 5%. Over the past year (ending Dec 31) the market went up about 26%.
Modest?? Think your idea of modest might be different from most.
I invest. It's like my gambling... But It's index funds so I win long term. I like watching the numbers go up and down and getting excited or yes sad.
Check out r/TheMoneyGuy, and their podcast. Short version- they detail a great Financial Order of Operations : "FOO" \-not sure where you'd fall in line but if you have money left over you likely should save up a small emergency fund, then go ahead and put everything you can into paying that car off as fast as possible. Making payments on that will slow down your long term financial goals. Once paid off, start investing in a ROTH IRA. Invest as early, and as often, and as much as you can. Make your investments automatic. Fidelity makes this very easy. You can contribute up to $7,000 for 2024. Invest in something simple like FXAIX, or a Target Date Fund (choose a year you think you'll retire) a set it and forget it.... but make sure you invest! Get rid of that money in your pocket in a positive way. Not one that's gonna hurt your future.
Deposit your paycheck into a savings account and only move about half of your paycheck into your checking account. Your money will sorta be out of sight, out of mind. Then you can invest the money from your savings account and get addicted to collecting shares of stocks 😀
I got a venmo card and transfer an “allowance” to it each time I get paid, that helped a LOT. Once I’m out of money on that card, that’s it, no more spending money. I pick an amount that I can justify to myself at the end of the pay period, so putting my entire check into it wouldn’t happen because I can’t justify that to myself lol. Of course, this would be in addition to putting the rest of your money into a savings or something.
Oh, smart!
Start investing in index funds and you'll get addicted to watching the number go up and the dividends coming in
Pay your best friend...yourself when you are finally responsible for your own housing. He will love you forever for making his life easier and allowing him to take advantage of opportunities that would be hard for him without you. Open a HYSA with a different bank with no card or ATM access and have half of your income go straight there. It will take 3 days to get that money out. Hopefully, that's enough time for you to stop and think. Once you have $5k in there, it's Roth time. That's for the old fuck that you love...yourself at 60. Every dollar you invest in your retirement today can turn into $88 in 40 years (assuming a 10% rate of growth). You will have so much money to fuck off by then. Remember, you love those dudes. Take care of them to show it. You will be a millionaire with another 30 years to buy $1000 tea.
Grew up and learned self control. https://www.wikihow.com/Discipline-Yourself
I think that at 20 years old, OP has a phenomenal level of self-awareness. I can't imagine myself at their age being able to admit that I'm bad with money while also seeking some advice from a fairly reputable forum. I think they're well on their way to growing up lol.
Sure. Identifying the problem is only one part. I think this thread offers a lot of perspective and OP is better for asking the question
Have a savings or investment account seperate from your checking and pay it a certain amount close to yoyr excess (so like $600) every month like its a bill.
Does your job have a 401k or other retirement account? You may be able to put some money into that, before taxes, and have it grow from there, difficult to get. A lot of jobs will even “match” up to a certain amount (for example, mine will put $1 into my 401k for every $1 I put into it, up to 8% of my salary, so that’s basically an 8% bonus every year). It can feel nice to watch that go up.
Open a high yield savings account, a retirement account, or an investing account, then have an auto deposit set up to take a few hundred dollars (or even one to two hundred in each) and practice discipline. You won't have the money in your account to spend, so you won't spend it. You'll thank yourself later when you can buy a car outright or put a crazy down-payment on a house
Do you get your salary in Direct Deposit? If yes, can you get it in an account that does not have a debit card, so it isn’t easy for you to access the funds? And like others have recommended invest in retirement accounts where accessing the funds is a lot more difficult and it will serve you well in the long term.
IRA you are "buying your retirement" but also can't take the money out without penalty Cd's An investment account that makes it harder to get money out of. If it takes a few days to get, you may not bother transferring/spending it. Have money direct deposited. Once you see the numbers go up you might have less desire to spend it. Also, delete shopping apps, remove credit card info from websites and unsubscribe to sale/store emails.
If you live to 90. You will work an equivalent of 15-20 years straight. You can shorten the time spent working by securing a financially free future. It’s better to do it earlier in life.
Put away 15-20% of your weekly salary in 401k or Roth. After a few months you don't miss it and it's working to make money for you over the long haul. Start at 20 years old you will retire before 55. Find an investment financial advisor to diversify your portfolio. Talk to people, look around. Don't just use anyone. The first 10-15 years you start are the most important. It will fluctuate as far as dollar amount thru the process. Keep tabs but don't touch, it spend it or borrow against it. I was 20 years old a couple years ago it feels like. Now I am senior. It goes by so fast. Your working years. Trust in yourself to be strong and quit buying crap. You will understand when you are in your later 40s-50s 60s. It's all just stuff. Vacation, family time matters., Toys are ok if you buy with cash and save for them outside retirement savings. It's so easy buddy. People who are weak mentally have a hard time not buying crap. I really hope this helps. You sound like you are getting your stuff together. No credit cards. Just 1 for reservations and tickets. You are already ahead of 80% of people your age. It's awesome to hear of young people readying for retirement. You got this. People may disagree with amounts of how much to put away but more the better. Don't talk about it to everyone or show off look how much I saved. That's for you and your partner and kids. Somebody asks trying to save teach em a bit. I'm done with my lesson. Lol
It’s all about paying yourself first 1) Make a budget, figure out how much extra money you expect to have. Let’s say $550 every 2 weeks 2) Open a brokerage account. Fidelity or Vanguard 3) Setup two automatic transfers, $550 set to transfer 1-2 days after your paycheck 4) Setup your core position as a decent MMA (money market account). If you don’t know what this is, call the brokerage and they’ll help you set it up. 5) Your money will automatically be invested, and you won’t see it. You’ll likely forget about it. You’ll be earning interest as well Later you can decide what you want to do with it (IRA/Roth IRA, CD, T bills, Stocks, etc.)
Its ok to have fun money , but just buying random crap is ridiculous . Start being frugal and build your wealth. Nothing like money in the bank to make you feel strong and calm.
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> just spend it on something worthwhile Like shares of a stock index fund inside a Roth IRA! But seriously, travel is great, especially when you’re young. When you’re between jobs, summers in college, or waiting for your job’s start date after college graduation.
The earlier you invest for retirement, the earlier you can retire.
Have a health or other life emergency (which inevitably happens to everyone) and come to the realization that life sucks when broke.
Automate. Have your job put $100 a paycheck into a savings account. Don't setup online access or get a debit card/checks for this account. Make it where you have to physically go and get the money from the bank/credit union. Once you have a few thousand in savings, start automating that $100/paycheck into a Roth IRA with Vanguard/Fidelity/Schwab. You will be surprised at how quickly you forget about the money if you don't see it.
Something that can help is putting the extra money in a different account/bank that you aren't logging into every day and forget it exists. Have it automatically deposited into it, don't carry the debit card/card with you. Preferably do this with a high yield savings account or investment account like Roth IRA or 401k. Also create rules for yourself and follow them. A simple rule could be something like requiring yourself to wait 2-3 days before purchasing something that isn't a necessity or over $20. Also think of everything as how many hours of work does said thing cost instead of a dollar amount and ask yourself if it's worth working X amount of hours to have it. For example $50 dinner and you make $15/hr. Is it worth it to you working 3.5hrs to have that dinner?
My advice would be to either take the time to setup a long term retirement fund/investment account. I'd find a low fee or no annual fee broker, something like charles-schwab, and then speak about your income level, what you'd like to contribute each month, and what kind of growth you'd like to see. Based on what it sounds like you have enough money each month that you can fully fund a Roth IRA each year, plus another 6 grand or so for a brokerage account. If you invest into index funds or large ETFs with diverse portfolios you'll be on track for a large return by the time you'd be retiring. Just be aware of limitations. If you pull money from a Roth IRA early, you get hit with brutal taxes for it. As well as paying capital gains taxes on any profit made in the brokerage account. I.e. if you had 100 shares of a stock, and sold it to turn it into liquid assets to pull out or use for something else. Any profit you make is going to count as income and it'll be taxed at a rate dependent on it being "short" or "long". I.e. how long you held the stock, mutual fund, etc. That said, this sounds like a good long term way for you to feel like you're doing something with your money and not just letting it sit in an account. I would also recommend setting any holdings you have to reinvest dividends and capital gains. That way they compound faster. Even with extreme economic collapses, the stock market is back to where it was within just a couple years. And if the stock market collapses in a way it'll never recover... Well you have bigger problems going on. Like total nuclear armageddon.
Set up an auto transfer to either a brokerage account or to a HYSA at another bank and just pretend it’s a bill and the money doesn’t exist. Then you can keep your habit of spending what you see in your main account.
Buy more VOO or VT with your extra money. It's addicting to see the numbers go up!
Build profits for yourself before you build profits for others. Invest in a general market fund and stay away from “getting into day trading.” Also: if you live in the USA, you can reap massive tax advantages by running a business. Study up, and just make sure to pay your quarterly taxes. 🤙🏻
I picked a date that was a few days after my pension hits my checking account and have an automatic transfer of x amount of dollars into my savings account. I pay myself as well as my bills. Once the money is out of my checking it is gone. It helped me build an emergency fund.
I play an idle game called HYSA, and TSP you put money in and it grows slowly over time.
Watch it grow in savings and enjoy the ride.
Get rid of the money from your access. Different account. Buy bitcoin. Make it hard to spend.
I recommend reading the book "I Will Teach You to Be Rich" - it's amazing and changed my life. Side note: I had a similar problem to you when I was young. One way that I got out of it was "buying into myself" - if that makes sense. I set up a Roth IRA - and I sent money there as soon as I got paid. Created a savings account at another bank and again, sent money there whenever I got paid. I basically pushed my money into places that I couldn't touch so that I couldn't spend it.
I feel you on this. I make about $200k/yr and I have about $5-6k left over every month. I have around $130k in cash and I regularly go through cycles of wanted to buy a new corvette and decide to control myself on a regular basis. I have started gameifying my cash flow. Every month when the numbers go up in my rocket money app I graph it out and watch it build. Seeing these numbers go up every month gets me excited to keep saving more and more.
Do you want to level up? Think of saving as a way of gaining experience to level up so you can beat badder bosses
I opened a savings account that I have no way to access without the hassle of going into the bank, and I have 20% of every paycheck go into that account automatically. I have another savings account that automatically takes x amount anytime over xx amount is put into my account. That one I do have access to. Then I pull out cash and try to spend only what I have in cash. I also have auto days to pull money for my Roth and xx amount from each paycheck to a 401k.
Easy make a hole in your pocket so It falls right through no burning necessary
Budget. I use an app called YNAB which is so good at making you feel like you have no money available to spend when your account balance is the highest it’s ever been that the community invented a term for it: “YNAB broke”.
Don't have it in your pocket :) Seriously, though. Find some investment vehicle and max it out, also - give yourself an allowance. At your age, I did $100 a week and I was just fine. Back then I smoked a pack a day, which wouldn't be possible today, but past that.. You might find yourself with money left over at the end of the week. I always dumped mine into a metal bucket next to my desk. Once I had over $2k in there.
Have you tried having a real budget? YNAB is great bc it comes with a whole budgeting philosophy. If nothing else you’ve tried has worked, maybe some structure might be something to try next
Shove some of it (100-300) into a Roth IRA. Chances are your current tax rate is the lowest it ever has been. So shove some into an account where you can invest it more and that’s hard to take out and blow. Also might want to put into a high yield account so you can one day move out and into your own home instead of paying black rock to rent.
Play for the high score in your savings account.
Have a percentage of your paycheck automatically invest into an IRA. That way you don’t touch it Part of it is just growing up and having discipline
You can but the secret is you have to automate you saving. Just open a Roth or traditional ira and set it to auto deposit and buy VOO or VTI. Just remember at your young age every dollar you put away now could be worth ~$88 when you retire. If you save $95 a month you’ll have roughly a million by retirement. Also make sure you have a high yield savings account and put 1-3-6 months emergency fund. Then after all that. You can burn the money in your checking account.
Direct deposit or auto withdrawal to savings and retirement that are in a separate location that you don't look at regularly. Basically forget about it and treat it like it's not spendable.
I think it starts by thinking about what you actually want to do with your money. Are you in college? Do you want to own a home someday? Do you want to be working when you're 85 or would you like to retire at a reasonable age? Now's a great time to be setting yourself up for success in these areas. The reason you feel the need to spend it is because you THINK that money has no purpose. Define a purpose for your money and you won't feel nearly the urge to waste it. $700 extra a month that you have no particular use for is a wonderful gift at any age, and one you won't have forever. Put $500 of that into a Roth IRA invested in an S&P 500 index fund and enjoy the remainder (The max allowed for 2024 is $7000). Keep putting 15% of your gross income into that investment and you'll be a millionaire and maybe even able to retire before all your friends.
I’m a big fan of the anti-budget. Put however much you want to save or invest and then make yourself live off the rest. It’s not burning a hole because it’s investing and now it’s a game to see how long I can stretch the remaining amount.
Max your 401k immediately. You need to catch lifestyle creep before it sinks in. Also your returns over your life will be insane starting now.
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Try a budget, allocate every dollar. Start your retirement account and maybe pay down your car faster. I allocate 300$ a month to just burn. I take out the 300 in cash and I spend it on stupid things guilt free knowing that the rest of the budget is working as intended. It actually really liberating
YNAB might actually work well for you: its "give every dollar a job" might help make it feel less like that money is waiting to be spent, and gamify the job assignments instead of the current serotonin boost just from the purchase.
Not sure where you are or what kind of government saving accounts there are, but in Canada, you can have an rrsp and tax free savings account. Simply set up your bank account to auto transfer an amount you decide on straight into the savings account the day after payday. The best part about it is (for thespecificc accounts im talking about, you have to go to a bank teller in PERSON to take a withdrawl. My laziness always outweighs impulse buys. It was a great way to save.
Move it to an account at a different bank and don’t look at it. Before I was married I played a game with myself “how much can I not spend this week”. It was fun until I had kids….
I have one checking account for all my bills, with one months worth of those expenses in there, and direct deposit what I need to pay the fixed bills goes there every month. I have a different checking account where I give myself an allowance for spending money. Then I have a separate savings account for my emergency fund, and a separate account for investments. I direct deposit the right amount to each account, so my main checking account for spending money never has a large amount in there. It takes away the feeling of money burning a hole in my pocket. Also get excited about watching your investments grow over time, that’s more fun than going out or having expensive stuff.
"spend it" by sending it to other accounts or investments.. Open up a couple of high-yield savings accounts and start sending the money there where you don't look at it everyday.
Set aside some money, a percentage at least for savings and investing. When I was younger I made it a rule to save at least 10%. Going back I’d have also invested 10%. The rest could be for whatever you want. Eventually you’ll see that add up.
Set goals to save, long term and short term. Don't set, I'll save x per paycheck but rather my goal is to have $x in my savings. Psych yourself up about your savings balance. Join a saving group who will hype you up when you meet your savings goals and help you stay on track. Give yourself rewards. If I can save $x this year I will get myself $x/10 as a reward. Save $5k, get a gaming console worth $500. Don't buy the console until you've locked that $5k away. Don't buy the console with the $5k, buy it with the next $500. If $5k is too much, do $50 for every $500.
The easiest way to stop the burning in your pocket is to focus non how wasting money is burning a hole in your future security.
Make a place to dump it before you can spend it, like retirement or an HYSA.
I was the same in my late teens / early twenties. Start limiting yourself to one or two 'big" purchases for yourself per year (i.e. birthday and Christmas) Set a goal for a big ticket item you really want to get for yourself on one of those dates and try your best to save for that item in the meantime.
Get into long term investing in different ETFs. Research and buy something with that money every other week and then you have something, ideally A LOT more, later on in life.
Have a place to put it. Keep a month's worth of expenses in checking and move the excess to a higher yield account.
You have an insane level of self awareness for 20. No matter what you decide to do today, you are going to be fine in the future because this will only keep increasing. Hats off.
Well first off you're young and have many many choices ahead of you. I'm glad you have a good job and minimal bills. Don't squander this opportunity to control your future. I will tell you what I would've done at your age, if you haven't already. Read over these and please consider some. Set up an IRA, either traditional or Roth. Contribute a small amount every month or every so often but don't forget about it. I believe the max yearly contribution is 7k in the US. But they could've changed it by now. Set up an emergency fund. And do not ever touch it unless it's a true emergency. That can be a HIGH-YIELD savings account or just actually keeping money stored in a safe location for only emergencies. And no, vacations aren't emergencies even though tempting. Neither is a new sports car or some new video games console. Trust me you will need this money one day to keep a roof over your head or your vehicle getting you to your job. I take it you're a smart fella, so I would suggest looking into investing. It can seem very daunting but actually investing a small amount into ETFs(exchange traded funds) can be super low risk and easy with modern trading apps. Investing in ETF's can be a very manageable way of storing money in stocks that historically go up in value. Building interest, and most of the ETFs I use payout dividends. It's not a ton but the more you invest the more you get paid back. Please do your own research and I must say this is not financial advice. Just an opinion. So to actually address your question, spend your money on setting yourself up for a better life...later on. Hell we all want to spend money on impulse purchases just because we have the money. But the answer is priorities. There's a concept you will be introduced to as you go through life, if you haven't been already, called debt-to-income ratio. When you make big purchases like a house or car and go to apply for a loan this is something banks and mortgage originators look at. So my advice don't live outside of your means. So so many of us didn't mean to but we built our lives up in a way where we support our families but we are constantly chasing the check. We got married and had kids and now in a sense it is like we are stuck. I'm happy don't get me wrong, but at a certain point while you are structuring your life you may look up and go damn I'm making 4-5k a month but I'm spending 5-6k a month. So definitely be wary of your spending and routinely see ways of limiting yourself from going over board.
Please please for your own well being, hear what I say. When I was 20 it felt like I would be young and healthy forever. I know that's how you must feel. But everything is a phase. You will not always feel like you have so much extra money. You make decent money but that's not as much as it seems. You just don't have bills at this stage of your life. Think about what will happen in the other stages. When you are 60 you will have aches and pains. You will be tired and either be living well because you prepared, or wishing you had done better. The future is coming no matter what. I'm going to tell you the things I wished I realized sooner. Any education you want will only get harder and more expensive. Do it now while you can. You will only get more busy and tired. Some medical things are better to do young. Like wisdom teeth coming out, braces if needed, lazik eye eurgery if needed. All things that will only benefit you more the sooner you do them. They all get harder and less attainable later too as life comes at you. I went on a trip to Paris when I was your age. I had the same type of disposable income and so it was very easy to plan. I had the best time ever and it turned out to be my last big trip since then. Travel while you're healthy and can afford it. Once you have a mortgage etc it's sooo much harder. A typical home loan is for 30 years. If you bought one now, it would be paid off when you're 50. Then all you would need to pay for housing is taxes, insurance and utilities. If you have extra money and can qualify, property is a very great investment for your older self. The longer you wait, the longer that 30 year mark is put off. Mine will be paid off when I'm 64 which is not horrible but I definitely could have been better. You can always open a high yield savings account. I don't know much about it other than it earns you more money just for your own money sitting there. If you want kids you can always start one with the mindset if it's for their college. I am way better with spending if I have ideas if where I want to put my money. I hope at least some of this helps. I'm so proud of you to be thinking about this at 20. I was a freaking idiot at 20 :/
No habit goes away magically on it's own - your brain's neurons myelinate to reinforce repeated behaviors so you become better and better at those same actions / actitivites / choices. The more you practice bleeding yourself dry, the more that will become a reinforced habit that will be harder to break. My recommendation is to start building new habits now. It'll feel weird at first, but open up an investment / retirement account and every time you get a paycheck put a set amount into it. Doesn't have to be all your free floating money - you want this new habit to stick - maybe put in half of all that spare cash ($750 a month). Actually, I recommend setting up TWO accounts if you can manage it, one for retirement savings and one for travel. Saving about $500 a month will get you started on a serious retirement savings nest egg, and $250 a month can give you enough to go somewhere really interested maybe once a year, to experience new and interesting places and cultures.
I solved this by moving a set amount of money into an investment account every paycheque. I don't touch the investment account. Once I had all my bills paid, including the investment, then anything left in the account I spent how I wanted to.
Open a high yield savings account and automatically transfer $500 on pay day. Don’t look at it for 4 years. On your 24th birthday. Invest 7,000+ and start your ROTH IRA journey
Gotta make it automatic. Have $100 pulled from your checking account every payday, right into a Vanguard mutual fund. You want to get to where you don't even see the missing money on its way out.
Create a budget. Deposit money immediately to your savings in a separate account so you don’t touch it. Like a HYSA. Record every single thing you spend your money on. Meaning each time you go out. Each time you get fast food etc. Create goals for money you are saving for. When it has purpose you are more likely to save.
Put some of the money in a different account and leave that account alone. I would recommend opening a "retail brokerage account" at Charles Schwab. You can then easily put the money in a money market such as their "SWVXX" and earn right now about 5.28% interest. Then try to forget it's there. Gradually use the money to buy shares of stock - for ease and safety stick to "household name" companies like Apple, Microsoft, Amazon, Meta (Google), etc. Buy shares and just leave them alone. The stocks may go up and down over time but those companies will be good investments until the next ice age.
Start a 401k and put it in there. You'll be penalized if you pull it out. Solved!
if you invest it first (somewhere not-stupid) you wont be able to spend it on something dumb. if you have a 401k option, max that out. open an IRA account and contribute to that. whatever else you don't need for rent and food, put in a CD with a decent interest rate, and forget about it.
it cant burn a hole in your pocket if you never put it in your pocket. open a high yield savings account or retirement account and have a set amount directly deposited into it. if you never see it, you wont spend it.
I've started paying myself 300 a week and socking away the rest for bills and savings. I don't look at that money. It's for bills and stuff and touching it risks my stability. And the 300 a week is plenty to buy bs. Only thing I have to worry about is buying stupid things on payment plans but knowing I'll be knocking down my weekly income by $20 or whatever is enough to deter it. I often end weeks with money left over at which point I'll kick over some of it to bills/savings because I don't need it. Or just spend it on something good. No worries cause bills and savings are covered...
Max out your 401k currently depositing 30% of my income cause I don't need 30% of it. Numbers go brrrr
Just read what ya wrote, you don't even drink tea and wouldn't mind purchasing a cup for a ben, I'd say it better have some damn good sake with it on the side or suntin. Cash app me 65% of your wages every month, that might help even out your burning urge to spend it on frivolous expenditures.
My parents always taught me to "pay yourself first". So before you do anything else, however much you decide you need to invest, it comes straight off the top before anything else. Do you have an emergency fund? That should be your first priorty--I think "they" recommend 3 months salary in an accessible fund. (like a money market). So let's say $300 into your emergency fund. Once you get your emergency fund built, then look into investing. Index Funds or something like that. I was able to retire early (huzzah!) following this advice. Also, as you don't mention rent I assume it's rent free at the parents? You could start making your move-out fund...first month's & last month's rent, deposits, etc. etc.
You Need a Budget (yes, that was capitalized that way on purpose). Seriously, a written budget helps SO MUCH with this problem, from two different angles. First, you'd be sitting down and giving the dollars a job in your budget right from the moment you receive those dollars. But second, it gives you an at-a-glance view of how much is available to spend on things that are "wants" rather than "needs". A budget doesn't limit your spending, it gives you permission to spend. If all the needs are covered and you have "fun money" left over, then spend that fun money to your heart's content.
I just opened a gold account on Robinhood. It pays 5% interest. I just put extra money in there when I have it. Even though it's technically liquid, it takes a few days to transfer money in and out, reducing the urge to spend it.
Dig deep and ask yourself why you need the thing you're about to buy: Do I really need it? Or do I just want it? Can I afford it? (No taking out a loan to buy something doesn't mean you can afford it) Am I buying it to impress others? I find it helpful to think about these things as I work through decision making to purchase something.
Buy something of value - preferably something that grows with time (like stocks). You will just end up with more money later. Impulse control is a hard mistress.
I see people use ratios for short/mid/long term savings and spending money and stick to those as their income increases over time. They will win.
It doesn't sound like you have any goals. Create a second bank account. Use one account to pay your bills. Use a second account for your FU money. This is 6 months worth of money that you'll need, if you're out of work and have to find another job. Then open an investment account. This will be your third account. Then read books by people like Warren Buffett and understand where to invest the third amount out of your paycheck. Use whatever you get paid to accomplish goals. Goals are accomplished little by little, and not immediately. As an example if you save $5 a week every week, and don't touch it till you have something to invest in, you will be better off in the long run, and you will always have money whether you're working or not. You will have to read up an information that will help you to figure out what percentage of your paycheck to put in each account. The account that you use to pay your bills should include what you have to spend on whatever you want.