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Did any of you ever do this?
Posted on 5/15/14 at 10:33 pm
Posted on 5/15/14 at 10:33 pm
The whole "put 10-20% of a paycheck into a separate account"? I've noticed a couple of friends telling me that they do it and I was just curious how you guys felt about it.
7
Posted on 5/15/14 at 10:36 pm to xxKylexx
It goes well until it's gone.
Posted on 5/15/14 at 10:47 pm to xxKylexx
As in, tell payroll to deposit your check into two separate accounts? That seems a bit much.
I have about 20% per month automatically moved into retirement/savings, though. Set it and forget it.
I have about 20% per month automatically moved into retirement/savings, though. Set it and forget it.
Posted on 5/16/14 at 12:49 am to xxKylexx
That's a question that doesn't really have an easy answer. Putting 20% into straight savings probably will keep your cash safe, but it's not going to make you any real gains.
Is your 401k funded to take advantage of any match your company makes? Is your Roth IRA funded to the maximum you're able? Are your total IRA contributions maxed out? Are you maxing out your 401k contributions after you've gotten the company match and the IRAs are fully funded? Do you have a cash account you can draw on for 6 months of rainy days? If all of that is in place, are you investing the extra 20% you want to put away every check wisely?
My point is that you're asking the right questions. The answer is basically "yes". It goes into many separate accounts, but it's squirreled away in a manner that should make you some return on your investments as opposed to just putting money in the bank and stockpiling it earning nothing on your money. Learn as much as you can about building a portfolio and do the best you can.
Is your 401k funded to take advantage of any match your company makes? Is your Roth IRA funded to the maximum you're able? Are your total IRA contributions maxed out? Are you maxing out your 401k contributions after you've gotten the company match and the IRAs are fully funded? Do you have a cash account you can draw on for 6 months of rainy days? If all of that is in place, are you investing the extra 20% you want to put away every check wisely?
My point is that you're asking the right questions. The answer is basically "yes". It goes into many separate accounts, but it's squirreled away in a manner that should make you some return on your investments as opposed to just putting money in the bank and stockpiling it earning nothing on your money. Learn as much as you can about building a portfolio and do the best you can.
This post was edited on 5/16/14 at 12:52 am
Posted on 5/16/14 at 7:46 am to xxKylexx
I'm not really sure what you're asking about as far as what that 10-20% would even be used for. Liquid savings, rainy day, fixed expenses?
I'm trying to save fairly aggressively for my age/salary so I have my paycheck split up and direct deposited into 4 accounts.
401k - 10%
Savings - 25% of gross - to help fund my IRA and save for a down payment. most of this gets funneled into either my Roth IRA or my trading account
Checking 1 - just enough to pay my rent every month
Checking 2 - the balance
The separate checking accounts aren't necessary, but I opened a 2nd checking account for convenience when I moved and started working, and I had an extra account that I could either close or just use for something like rent. It's kind of a nice mental thing to know that I'll always be paying my rent.
I'm trying to save fairly aggressively for my age/salary so I have my paycheck split up and direct deposited into 4 accounts.
401k - 10%
Savings - 25% of gross - to help fund my IRA and save for a down payment. most of this gets funneled into either my Roth IRA or my trading account
Checking 1 - just enough to pay my rent every month
Checking 2 - the balance
The separate checking accounts aren't necessary, but I opened a 2nd checking account for convenience when I moved and started working, and I had an extra account that I could either close or just use for something like rent. It's kind of a nice mental thing to know that I'll always be paying my rent.
Posted on 5/16/14 at 9:15 pm to xxKylexx
Yes, I did that a while back and it worked pretty well. It was easy to set up with HR where the first $x came off the top off my paycheck and went into my ETrade account. That was in addition to 401k deductions. Then the rest went into the checking account.
The idea was that I didn't want to have to think about saving. If money hit my checking account I could spend it if I wanted without a second thought about saving. It worked great at that time in my life where I would have otherwise just blown the money.
The idea was that I didn't want to have to think about saving. If money hit my checking account I could spend it if I wanted without a second thought about saving. It worked great at that time in my life where I would have otherwise just blown the money.
Posted on 5/16/14 at 10:35 pm to xxKylexx
I have a savings account I put a small amount in every month as a rainy day fund. Usually something I want, like a Xbox One, new phone or a Macbook.
I also have a checking account that I have enough money for the monthly bills, a regular checking account for food/gas/groceries and another as an emergency fund.
Makes it easier for me in budgeting to keep my spending in check.
I also have a checking account that I have enough money for the monthly bills, a regular checking account for food/gas/groceries and another as an emergency fund.
Makes it easier for me in budgeting to keep my spending in check.
Posted on 5/17/14 at 8:50 pm to xxKylexx
Yes, I split my paycheck to 3 different accounts(401k, savings, checking). It makes managing my expenses much easier and I know I save a set amount each month. I don't know why anyone would do it another way.
Posted on 5/17/14 at 9:14 pm to Chris Farley
Mine is 401k, Roth, checking.
However, the amount I put to ROTH wouldn't max it (even though I do max).
I like the little bit of flexibility
However, the amount I put to ROTH wouldn't max it (even though I do max).
I like the little bit of flexibility
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