Making small savings worthwhile
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Anonymous
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I try to save money wherever I practically can but I am not sure how worthwhile it is. Avoiding carryouts and cooking mostly at home is just one of the many examples. But how to make these little savings worth it? Financial experts say if you want to get more financial stability, find a better paying job rather than not eating out at restaurants. That advice totally makes sense but then it also does when I save $80 by cooking at home for my family on a Friday evening, even when I am burnt out at work from M-F.
Question is what to make of those $80 so the saving feels worth it. |
Anonymous
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It depends on your financial situation. Do you have a 6 month emergency fund? Any debt? Are you cashflowing your expenses now?
Those are the best places for your savings to start. |
Anonymous
Both are true. However, you cannot just always find a higher paying job. But you can always cook at home and avoid takeout/dining out. Majority of people live that way. Yes, it is worth it to save---that $80 every friday is $320/month. Put that into a college fund and your kid is well on way to a state school at 18. Cook at home one more day per week and it's $640/month saved. |
Anonymous
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When I was a broke student, I read a financial book saying you should actually save the money you saved from coupons, rebates, sales, etc. I tested this out for 1 month. I save all my receipts and added up all the "saved" totals. It came to be a few hundred $$$ and I added it to my etrade (now Vanguard) account at the time.
Of course, I didn't keep it up because it was a lot of work. But I still do use coupons and the like to save. |
Anonymous
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This is OP
That $80 a weekend doesn't seem like a whole lot if it's not invested in some way and not let to grow. If you all save in specific ways on specific occasions, do you put that money in 529 or other places so it feels worth? We don't have debts right now and our extremely mediocre house is paid off. I am looking for ways to channelize small savings so I get a feeling of accomplishment. |
Anonymous
| It’s definitely worthwhile to save money on eating out when it’s $30-100 a pop. Invest it and it will grow. OTOH indulging in the occasional fancy coffee drink isn’t going to send you to the poor house. |
Anonymous
Start a Vanguard fund. |
Anonymous
| Every month, transfer savings into your fidelity brokerage account and buy IVV or VOO. It adds up quicklu |
Anonymous
Yes if you have kids I’d funnel that $80/wk to a 529 |
Anonymous
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Op, I never made a lot of money, but I invested my small income and I'm financially independent now. Before I started to invest, I made many many mistakes with money. I had to make them to learn from them.
Several other things happen when you invest the money you saved. You will learn about investing and get excited about it. You will not miss eating out because the $80 earning money the next day is more exciting. Having to come up with the next meal even cheaper than previous is also exciting. I never had a 401k offered at any of my jobs in 26 years as I worked the minimum wage jobs. There were times where the employer didn't even pay me and it can be seen in my social security statement. Wage theft is normal in minimum wage jobs. But lets go back to investing as it gave me my freedom from work. If you qualify for Roth, then max it out ever year and buy VOO or something similar. Keep in mind that if the price goes down, you don't lose money, but you do get your next piece of VOO cheaper or 'on sale'. Therefore, buying into market that goes down, is not bad at all. It will go up eventually. Buying into market that goes up, looks good too as your money goes up daily. Voo should give you about 10% a year in the long run like 15-20 years +. Can you imagine having started awhile ago and your half a million adds $50k a year. Inside Roth, that would be tax free. The biggest benefit is learning about investing hands on. Once you get really good, you may see that 529 plan, money in 401k past match and anything else funny invented by government/firms as a good thing, is not that good after all. Until you get experience, stick with s and p 500 ETF and inside of Roth if possible. |
Anonymous
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When we were just starting out, OP, we rented a cheap one-bedroom, hardly ever ate out or paid for entertainment (library - free DVDs and books), bought food on sale and cooked from scratch. We tightened our belts for 10 years and invested in high-tech stocks, namely Apple.
That worked out very well for us. We have never had a high income. But now we're Apple millionaires many times over. You need to save AND invest in the right stock. |
Anonymous
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When I want to order out (say $80) I think about putting it on my credit card instead of paying cash. Then I realize how much that sucks when I have to pay the bill and I've already consumed it. Since I hate the idea of that, I'll eat at home and throw the $80 into 529 or savings. It's a mental game for me, but it works and it adds up over time! Then I grab the chicken out of the freezer...
Some people do house porn, I do menu porn 
And bonus, I'm the same weight as I was in college lol. |
Anonymous
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Great, great ideas everyone!!!
My luck with stocks hasn't been very fine. What is better - 4.5% interest savings account or a brokerage account? |
Anonymous
| Don’t buy stocks. Buy index funds which are baskets stocks. This reduces your risk and expands the number of stocks you can benefit from. Look for funds that try to track the total stock market or S&P 500. I’m at Fidelity so a couple funds I have are the Fidelity 500 Index Fund (FXAIX) and Fidelity Large Cap Growth Index Fund (FSPGX). |
Anonymous
Fascinating mental game. Most people would say that physically holding cash is psychologically harder to pay with than an invisible future debt. |