How much money should a 23 yr old save each year?

Question

Just graduated college and work full time. How much money does the average 23 year old save each year? How much should I save each year?

Answer 1

Sorry....age isn't a biggy! 40 yr. olds should be asking this question. It's not the amount......That has to do with your salary and how you choose to live. If you are Average..... you're not saving a dime! What you might consider is 10% this year. Next year bump it up a percentage point ---- then as your salary grows keep raising it at your comfort level. Try to work for a company that offers a good 401 and match what they offer. Think about what you will have if you only save 10% of your salary for the next 40 years and it earns on average 5%. You will retire a rich person. SAVE

Good Luck!! Glad to see a young person THINKING about their future.

Answer 2

Sounds like there a few things you want to change about him. Well it comes down to this....you can try but you really can't change a person and if you love them you will ignore their flaws. The basketball cards are probably the only really ridiculous thing I hear here. Just because hes spending up to $40 a week on it. I think at that age he has much better things he could put the money towards. As for concerts......he should never stop going and you should start!! Life is too short to not go out and have fun....music is always good. Guys tend to mature A LOT slower than girls so I wouldn't say hes too far behind. Sometimes only children tend to be a little bit spoiled and just need a little bit of reality to snap them out of it. You should talk to his parents about not letting him live in the house anymore. Maybe if he had bills to pay the money wouldn't go to basketball cards.

Answer 3

Get a financial adviser, they are the biggest help in life you will ever have.
Also, some easy tips:

1. Never buy on credit unless you have to. Save up, and pay for as much as possible in cash.

2. Open a ROTH IRA, and put the maximum into it that you can, every year. Yes, $3000 seems like a lot of money, now, but when you retire, it can and will make a huge difference in your lifestyle.

3. Track every penny! Use Quicken, or Microsoft Money, and track where your paycheck goes. A cup of coffee is great, but spending hundreds a year on it may not be in your best interests. Unless you keep track of it, money tends to evaporate.

4. Educate yourself on money matters. Bookstores and The Motley Fool's website are great free resources.

5. Spend 1/2 an hour a week planning your retirement. That sounds silly, but 95% of the people today had no retirement planning. If you expect to live 30 years after retirement, it is in your best interests to plan now, while you are still able.

6. Get a living trust now, just in case something happens to you later.

Answer 4

Use the calculator below to see the results of how much you decide to save. Say you are earning $20,000/year, and invest only 10% of it in a mutual fund or basket of funds that average an 8% return, you will have a million dollars by age 60 even if you never get a single raise!

Starting to invest at your age is the smartest move that 90% of 23-year-olds (sadly) never make.

If your job allows "tax-deferred" contributions (like a 401(k), for example), jump at the chance, max out your contributions now, you will be rich and grateful you did later on.

Best wishes, & Happy Festivus!

Answer 5

A good rule of thumb is to save 10% of each check.

At this point, you should be working to reduce any credit card, student loan, or auto debts you have while still socking away a little money each pay period.

The reasoning for putting so much behind debt reduction is if you have $100 in the bank, but owe $150 on an auto loan, you're still $50 behind. Paying that off puts you $100 ahead.

You could speak with someone at your local bank about CDs or mutual funds. They have advisors who can suggest ways to invest your paycheck each period.

Also, check Ingdirect.com. Their APR for their savings account is almost 4.5%, which is awesome. And they have it to where you can automatically debit the amount from your checking account each pay period.

Visiting your local library will give you resources about different investment vehicles, also.

You sound like you've got a good head on your shoulders, though. Don't worry about saving every penny though, enjoy yourself every once in a while!

Answer 6

Depends upon your current situation. If you are still at home, and your parents are OK with that, save every dime you can for as long as you can. Resist the impulse to buy a new car and fancy stuff and live off of just the bare necessities. By the time you are ready to marry and settle down, you should have a hefty amount for the downpayment on a property. When you are married and your money obviously is spread thinner, again try to live on the minimum possible, putting away as much as you can. If you can train yourself to be that frugal, you will be able to retire much, much sooner than some of us old poots!!!

Answer 7

Have you created a budget yet? That should be the first step you should do.

What are you short term and long term goals?

Take advantage of any retirement saving plans at work such as a 401k, put in as much as you can.

Create an automatic deducation into a saving or money market account.

Pay off any debt that you currently carry such as credit card debt.

Good luck!

Answer 8

I'm 23 years old myself and I save 20 percent. In my opinion 10 percent is the minimum if you want to be financially smart and prepared. Don't forget to invest wisely and contribute to your 401(k) up to your employer's match. This may sound too much, and it certainly is at first but the key to success is to live frugally. Debt is bad, unless it's for your home and education. I am still paying student loans back. :-S

Answer 9

Save as much as you can as early as you can.

Though it's never too late to start, the sooner you begin saving, the more time your money has to grow. Gains each year build on the prior year's -- that's the power of compounding, and the best way to accumulate wealth.

http://money.cnn.com/pf/101/lessons/13/

http://money.cnn.com/pf/101/lessons/13/page3.html

Answer 10

I have been told by many finical investors that if you save $25 from each pay check.