I'm 21 and taking out $28 per paycheck each week to put in my savings account do u think this is a good idea?

Question

I've been wanting to do this b/c so may people have said that they wish that they started to save money at a young age so they would have money in the future. So i figured maybe i should do that. BUT am i just wasting my time and money by doing this?

Answer 1

Very good. Any money you can put into savings on a regular basis is good. Obviously the more money you save the better. You are also starting at a young age, and that's even better. So keep it up. Good luck ;)

Answer 2

Great idea! Is this in addition to contributing to your 401K? If so, the 401K is separate from your savings or emergency fund because in an emergency, you're not going to be able to get the money out of your 401K, depending on how it was set up. If you're putting this money aside for a rainy day or as an emergency fund, put it into a money market account. The money markets usually pay a higher rate of interest than a regular savings account and are definitely more liquid than an IRA. The nice feature about a money market is that usually you have to wait 3-4 days for a withdrawl to be made available to you so that gives you a nice safeguard against impulsive purchases or emergencies that may not really be emergencies. Lots of money markets have minimum balances, but quite a number don't. One that I really like and that gets high reviews from just about everyone who reviews online banks is from ING Direct (ingdirect.com). Their interest rate right now is 4.50% and they have no minimums. They call it a "savings" account, but it is actually set up and works just like a money market. There are a few other online banks that may offer a higher rate of interest with no minimums. And no, you are definitely not wasting your time or your money. Once you get it parked somewhere where you can watch it grow and grow, you'll get addicted to it!

Answer 3

In the short-run it may seem like a waste.

What you're really doing is building freedom for your future. It's called "paying yourself." The problem with living paycheck to paycheck (meaning that you have no money in savings) is that, even if you make enough money to cover your everyday expenses, there's always going to be some crisis that comes along. If you've saved some money, while you may not be happy to see it go, at least you'll have it to use.

If you don't have any money saved, when the tire blows out on your car, or you break your arm and have the pay for the ER visit, or your roommate moves out and leaves you holding the bag for the utilities... then you start to fall behind. You'll start spending money you haven't made yet, basically (overextending yourself; also known as "living beyond your means.") And once you get behind like that, it becomes a vicious cycle that's very hard to break.

Save your money. It's YOUR money; make it work for you. The most important thing is to start saving your money. If you can save more, then do it.

It can be challenging when all your friends seem to be out wasting money like it grows on trees. You can rest assured that will catch up with them eventually. And they'll be adding insult to injury paying off their current frivolity for decades to come.

No, you aren't wasting your time and most certainly not your money. If you want some more food for thought, check out the web site link below (the Dollar Stretcher.)

Answer 4

Any kind of saving money is good. Start with $28 and with time increase this amount. But remember you have to be consistent. If you are paid twice a month you will have over $600 after first year. With time try to save more that way in the future you will have money to buy a new car or nice down-payment for a house. SAVING MONEY IS NEVER WAIST OF TIME!!!

Answer 5

You should be putting that money into your company's 401(k) because it is tax free and most employers also dump some money into that account for you. If that is not available, the money needs to go into an Roth IRA. Again, you get some tax benefits by doing this.

If you need it to be in a savings account - be sure to get the highest paying interest possible (read the fine print) compare banks at www.bankrate.com.

Regardless of what you do with that money, saving is always good and start now - and I save 20% of my gross pay - not paycheck.

Answer 6

No, you're doing a good thing. I'm 23 years old and have no real savings. I don't have the ability to spare extra money out of my paycheck each week, b/c I have so many other responsiblities. When I get on my feet financially, I want to start doing the same thing. Good for you!!

Answer 7

It's not a bad idea to build up some extra cash. It's a good way to slowly build up an emergency fund of 3-6 months of expenses.

Once you have that, take some time to do some research or talk to a financial advisor about your savings goals are. Sometimes they can help you determine the right course of action for your goals.

Answer 8

WELL IT IS A GOOD START, KEEP IT UP.
By the way if you don't save now and need the money really bad later then you'll be in debt!
Also depends on your paycheck, don't try to save too much if your paycheck is low.

Answer 9

It is always smart to save money if you can. I saw on TV last week you should bank 1 hour of your work days pay every week. You will find that eventually it adds up.Then before you spend it on something make a want list and after 30 days if you still want it then think about purchasing it. Lots of times after a month we no longer want it.

Answer 10

It's a good start! You can NEVER start saving too early. Save as much as you can, without sacrificing a decent life. I started saving when I was 20, and will be retiring in 5 years, at 45.