Making small savings worthwhile

[Anonymous]

OP, home cooking isn't just cheaper, it's healthier and better. It's an investment in your family. You don't to go fancy. Meal prep, simple meals, and get the whole family involved in helping together.

[Anonymous]

Like some here I enjoy the game of small savings. For instance yesterday I was wearing a pair of socks that I got from my MIL which she received as a "gift" from a charitable organization soliciting her. That's $8 kept for me that I didn't spend on a pair of socks! Sometimes if we have a breakfast at work and there are leftovers, I will have a bagel for lunch and save the lunch I brought for the next day. As others said, moving to a job which pays more and an organization with better benefits would probably yield more financially, but in the meantime being cheap is a fun game to play and admittedly gives me some sense of control.

[Anonymous]

Anonymous wrote: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?

Do you have an emergency fund?

If not, HYSA.

If yes, brokerage account of your choice: taxable, tax advantaged, whatever.

And if you have a big purchase planned for the next two years, HYSA.

[Anonymous]

This is OP. I will look into brokerage account asap!

[Anonymous]

Also check out Acorns. Basically every purchase on their card can be rounded up with the difference invested. Also good rate on checking accounts. Easy way to save for a lot of people.

[Anonymous]

OP here.
Are there any disadvantages of opening SPAXX Fidelity Brokerage account?

[Anonymous]

Anonymous wrote: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.

I guess maybe ask yourself WHY you are trying to save this money and see if that helps guide what you should do with it.

When I still had tons of student debt, I used to send in an extra $50 or $80 payment several times a month (on top of my big monthly payments). It did add up.

Now I do that with my little Fidelity investment account. We are far behind saving for retirement and don't have nearly enough in savings - working on it! - and several times a month I'll just stick another $80 or $150 into my investment account. It's all saved in an index fund. I've managed to squirrel away about $24,000 in the last three years.

What is it that you are saving money for? Is it the security of a nest egg? Is it savings for a vacation? Whatever it is, I'd recommend creating an account for that purpose and sticking all those $80 savings in there. It won't make you rich overnight but it does add up.

[Anonymous]

“Are there any disadvantages of opening SPAXX Fidelity Brokerage account?”

Okay, I had to look this one up. Seems that it is a money market fund. So that would be what is considered a conservative investment - while these may be paying over 4% now, that will decrease as the Fed eases interest rates over the next year or so. A great choice if conserving your money is your main goal. For example, if you want to use it in the next few years to pay for college or buy a bigger house.

If building wealth is your goal, then you need a more aggressive investment choice. The most sane way to do this is to invest in low cost ETF or funds. The minimum wage PP’s recommendation of VOO (Vanguard’s s&p 500 ETF) is a very good choice, as is VTSAX (Vanguard’s total stock market mutual fund). Vanguard is very well known for being more low cost and consumer friendly, so you may want to open a brokerage account with them and set up monthly auto investing into VOO or VTSAX.

And PP’s recommendation that you do this as a Roth IRA, if you qualify, is great advice too. roth’s are amazing because earnings are tax free forever.

[Anonymous]

Anonymous wrote:“Are there any disadvantages of opening SPAXX Fidelity Brokerage account?”

Okay, I had to look this one up. Seems that it is a money market fund. So that would be what is considered a conservative investment - while these may be paying over 4% now, that will decrease as the Fed eases interest rates over the next year or so. A great choice if conserving your money is your main goal. For example, if you want to use it in the next few years to pay for college or buy a bigger house.

If building wealth is your goal, then you need a more aggressive investment choice. The most sane way to do this is to invest in low cost ETF or funds. The minimum wage PP’s recommendation of VOO (Vanguard’s s&p 500 ETF) is a very good choice, as is VTSAX (Vanguard’s total stock market mutual fund). Vanguard is very well known for being more low cost and consumer friendly, so you may want to open a brokerage account with them and set up monthly auto investing into VOO or VTSAX.

And PP’s recommendation that you do this as a Roth IRA, if you qualify, is great advice too. roth’s are amazing because earnings are tax free forever.

Thank you!

[Anonymous]

Go to a compound interest calculator. $80/week ($320/month) at 8% return would be about $60,000 in 10 years.

At least that is how I explain it to my teenagers who only make enough to invest about $100/month

[Anonymous]

Anonymous wrote:Go to a compound interest calculator. $80/week ($320/month) at 8% return would be about $60,000 in 10 years.

At least that is how I explain it to my teenagers who only make enough to invest about $100/month

I should have added they both have VOO through Vanguard.

[Anonymous]

This is simply garbage advice. OP you are correct, what will make the biggest impact is for you to have an income that way exceeds your expenses. Sure you can save $80/wk but that will not make you rich. We have 200k in a HYSA and made a few thousand in interest last year. We also bought a sold land with our excess income. That generated 14X the HYSA interest. Get a higher paying job if you can.

[Anonymous]

This is simply garbage advice. OP you are correct, what will make the biggest impact is for you to have an income that way exceeds your expenses. Sure you can save $80/wk but that will not make you rich. We have 200k in a HYSA and made a few thousand in interest last year. We also bought a sold land with our excess income. That generated 14X the HYSA interest. Get a higher paying job if you can.

[Anonymous]

Anonymous wrote: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.

What a great post!