How much should I save?

Question

About how much money should I save to move out on my own if I already have a $425 car payment, a $60 cell phone bill, and about $80 worth of misc. bills? I make $13.00 an hour, and for where I live that is pretty good income. Please don't say I'm to young to be worrying about this kind of stuff, I'm very responsible and independent (which is why I want to move out), I am simply looking for suggestions on how much to save up.

Answer 1

A good rule of thumb is 10% of the GROSS amount of your paycheck.
-MM

Answer 2

Beloved and Stanley are giving you great advice. But a $425 monthly car payment?! Get rid of that! A car is nothing but a money pit. Buy something cheaper. Take the additional money and 10% of your net and invest it.

I have never had a car payment above $250 a month. I buy a 2 year old car that has depreciated 40 to 50 percent that has between 30-35,000 miles on it. I currently drive a car that I payed off 6 years ago and it is now 10 years old. I am able to do repairs myself, so the $100 - $200 I spend annually on regular maintenance items is less than one of your monthly payments. And I drive almost 3000 miles for work monthly.

Remember to always live below your means and save. Shop at Goodwill and 2nd hand stores (I still do even though I could go buy new). Invest in your company's 401K and start a Roth IRA. Pay cash whenever you can and DON'T TRY TO KEEP UP WITH THE JONES' - They're broke!

As you get older, you will notice how many people your age haven't taken any advice and just finance everything. So they are investing in 401k's making 6 to 8% interest, but are paying 12 - 21% interest in credit card interest. A little backwards, huh?

Answer 3

Don't know your age.... What are you saving for ? How much do you need ? Can you afford to put away $100 or $200 a month? If you can afford it then definitely start and put it in a Roth IRA that has a mutual fund within it and add to it monthly.

Next you can start to read up on the stock market... read read read !!!! Email companies and request their prospectus', it is free! Read about the companies that interest you. After a while when you have more money to invest, you can find a company that you can buy directly from them without a broker. EASY EASY !!

Search : "direct stock purchase plans" and it will get you headed in the right direction. Heck... persuade friends to learn this too !! Remember ONLY YOU can make your future SWEET !! Get started NOW!!!

Spend nothing!(whenever possible) Keep your bills to a minimum and see where you can cut corners to save more money. Nothing makes money grow more than by adding to it. Soon it is big enough to grow on its own and that is where independent wealth comes from.

Every time you go out to buy something, put that equal amount away into a jar or savings account. Once a month, once every six months or annually, take that money and put it in your mutual fund or buy stock in a company ((that you have done your homework on)).

Its not how much money you make...It is how much you KEEP. Stop spending it all and soon it will grow. Very few people I have met in my life have the discipline to do this. I hoarded as a child, My family has the "hoarding gene", it has worked well for us

MSN money central has a savings calculator that works great for finding out how much you will have if you put away such and such amount! Figure how much you want to live off each year during retirement... double it and add a zero... that is the simple calculation you can do for the amount of money you need to have invested in an IRA, mutual fund or other, and live off its interest. Example : if you want $50,000 a year to live off, then double it = $100,000 now add a zero = $1,000,000... you will need this amount to get $50,000 in interest annually with out working.

This "savings caclulator" it will also tell you how much you need to put away each month or annually which ever you prefer... TO get to where you want to be....with the number of years you plan on working yet.

Keep your head high and do the right thing!

Answer 4

OK, since you insist you're responsible and independent for your age, let's consider this:

So far everyone has said that you should save up as much as you can, and for the most part that's true. But you also have to consider how much you're going to pay out once you move out.

You've got rent, and that will depend on what you think you can afford on $1900/mo net, which is roughly what $13/hr gross gets you. Along with rent, there are utilities like electricity and heating. Add food, and that amount will depend on whether you plan to do a fair amount of cooking (doesn't cost much) or you'll be eating out (will cost much).

When you calculated the $80 worth of misc bills, did you add your gasoline costs, since that seems to be taking a chunk out of many household's expenses? And auto insurance premiums?

So far, from what you wrote, you have $1335 left/month for all of the other expenses we haven't acounted for yet. Subtract out the stuff unaccounted for and hopefully you still have some money left over every month as savings.

Good luck.

Answer 5

You would also have to consider the rent payment if you will be moving out. First, pretend that you already moved out and consider the living expenses (rent, car, insurance, utilities, cell phone, food, clothes, entertainment, & misc). If you have two months of living expenses saved, I think you are ready to move out. Also, don't forget the security deposit for your new place and many of the utility companies will ask you to put security deposits if you are a customer for the first time. Another thing, you may need to purchase some appliances like refrigerator, vacuum cleaner, kitchen wares, & etc, so make sure you have enough money for all those.

Answer 6

Save as much as you can the more the better.

Answer 7

lock it away and throw away the key!