If I wanted to start saving money for my future what is the best way to go?

Question

I'm about to be a 19 year old college student and I was wondering what is the best way for me to start saving. After this semester my scholarships will cover all college expenses. Only money I will spend will be for dates, birthdays, holidays, and of course gas money. After this summer I will have sufficient funds to either invest or put money into a savings account and allow it to draw interest. What is the best bet for me to have a reasonable amount to fall back on when I'm older. I'm not asking what will make me a millionaire but what will allow me to live comfortably. Thanks.

Answer 1

If you are looking for retirement money, you will want to start with an IRA. You can open it at most larger banks, or though a stock broker. Up to (currently) $4000 per year can be taken off your taxable income so you won't pay taxes on it until you take it out at retirement age. The money in your IRA is usually invested in stocks and/or mutual funds. They can go up and down, but if you pick good ones, you don't need to worry about temporary decreases at your age.

You may also want to put some of your money in CD's, money market accounts, or similar. They are not tax deferred, but you will be able to get your money much easier if you decide you want to use it for a down payment on a house or other big ticket item.

Answer 2

Well... if you're really serious about funding for when you're older, you might consider going ahead and starting a Roth IRA.

You pay the taxes NOW (and you aren't likely to ever get a better tax rate than you will as a student), then you can take the money out tax free after age 59 1/2. (There are also some special circumstances that allow you to take out money penalty and tax free to cover expenses if you become disabled, up to $10,000 to purchase your first home, etc.) You can read more about it on the link below. Both ING and ShareBuilder have some low-fee Roth IRAs available.

I'm not sure I'd recommend you tie up all your money there, though. Having an emergency fund in a place you can access it quickly is a pretty important thing, too. For that, I recommend you consider the ING Direct savings account (that's paying 4.5% right now), or one of the other similar online accounts.

Congratulations on your scholarship and your foresight!

Answer 3

Save your money for a house downpayment.

Owning a desirable piece of real estate, with surroundings you actually enjoy, is the best investment you can make.

So keep your powder dry, as they say, and when you find what you like at the price you want, buy it.

Answer 4

There are multiple ways to have $$$ work for you,
However some of them require ongoing attention (almost like children or a garden).
Investing and real estate require regular attention and maintenance or adjustments.
You could put your money in one of the better CDs or ING for now because school might leave you little time for $$$$ management.
You should still start studying Yahoo finance and invent some portfolios to track so you can get the hang of it for when you have more time.

good luck

http://finance.yahoo.com/ and

http://finance.yahoo.com/education

Answer 5

Open a brokerage account at Zecco and invest in the ETF DIA.

Answer 6

talk to many financial planners. everyone has their opinion. Start an IRA but don't put it all there. Whole life has its advantages and a 401k lets your employer contribute.

Answer 7

put it in a savings account and don't buy things you really don't need