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Started By
Message
Advice for a 20 year old - warning tl;dr
Posted on 10/23/12 at 4:47 pm
Posted on 10/23/12 at 4:47 pm
I'm pretty much of a shut in when it comes to this kind of stuff. I had no guidance on these issues and I don't really know where to start. I thought I would start by reading these threads but I'm overwhelmed by all the different accounts/acronyms/financial lingo. If anyone could link me somewhere to answer my questions or just answer them straight up that would be spectacular.
My situation is I'm a college student currently playing for my own tuition. I work full time at a hospital in a sterilization department. All my money goes to rent/food. I save very little each month. I was fortunate enough to have enough set aside for some last minute tickets to the usce game but other than that my gf and I do very little that requires extra cash.
I am 2 years in and I plan on getting my bs kinesiology and applying to lsuhsc to become a physical therapist. I know I will not be able to pay for it by just working so student debt is inevitable. I will attempt to minimize student debt as muh as possible but to attain my degree I'm going to need some help.
Now there's a little back story so my questions are.
What should I be doing to prepare for retirement(long ways way I know)?
What are some differences between different accounts? There are so many you guys talk about I feel a bit overwhelmed.
I feel very lost when it comes to taxes. Is this normal or will I understand it as I go?
Is there any basic guide I could look at to help me out?
I know these are very broad but I am very new to all of this so please bare with me. I know I may come off as annoying but these are things I feel I should already know that I have no clue about.
Any help would be appreciated. Thanks.
My situation is I'm a college student currently playing for my own tuition. I work full time at a hospital in a sterilization department. All my money goes to rent/food. I save very little each month. I was fortunate enough to have enough set aside for some last minute tickets to the usce game but other than that my gf and I do very little that requires extra cash.
I am 2 years in and I plan on getting my bs kinesiology and applying to lsuhsc to become a physical therapist. I know I will not be able to pay for it by just working so student debt is inevitable. I will attempt to minimize student debt as muh as possible but to attain my degree I'm going to need some help.
Now there's a little back story so my questions are.
What should I be doing to prepare for retirement(long ways way I know)?
What are some differences between different accounts? There are so many you guys talk about I feel a bit overwhelmed.
I feel very lost when it comes to taxes. Is this normal or will I understand it as I go?
Is there any basic guide I could look at to help me out?
I know these are very broad but I am very new to all of this so please bare with me. I know I may come off as annoying but these are things I feel I should already know that I have no clue about.
Any help would be appreciated. Thanks.
8
Posted on 10/23/12 at 4:55 pm to Reuben32
Im out of pocket right now, but one quick thing you can do to help you save is rework your thought process towards it. Instead of spending what you earn and saving what is left, work on saving off the top and basically work on using what money you earn to pay yourself each week. Anything you can do to systematically out away some money before it is in your spending account. I'll try and get on later to help out with your other questions, but do realize, you are only 20, most peoe your age don't even ask these questions.
Posted on 10/23/12 at 5:09 pm to Reuben32
quote:If your current job isn't leaving too much to invest/put towards IRA, then my advice is to save what you can for now.
What should I be doing to prepare for retirement(long ways way I know)?
Important issue for you right now is to manage your debt. Taking on student loans isn't a bad option if you intend to pay them back on time. By that, I mean not ever missing a monthly installement.
quote:I'm guessing you mean retirement accounts. 401K (some companies will match a portion of your contribution) is when you take some of your income (pre-tax) and put it into an account. Some bank/fund will invest this money for you. When you retire, you can start drawing on this money, but you must pay the taxes of that time (everyone assumes tax rates will go up over time). In case of emergency, you can access these funds for a penalty (10% of what you take out I think; so if you take out $1000 to fix your car, you must pay a $100 penalty fee)
What are some differences between different accounts? There are so many you guys talk about I feel a bit overwhelmed.
That is when you start hearing about Roth IRAs. Roth IRA's allow you to invest post-tax amounts into an account. Later, when you draw on it, you do not have to pay taxes since you would have already paid taxes on it before putting it into the account.
This is where, I believe, it is a good general rule of thumb to invest in your companies 401K up to the point where they match (free money!), then put the rest in Roth IRA since it "should" have tax benefits down the line.
That is my quick retirement statement. I don't really know more than that, because at my career-level, this is all I need to know for now...I think.
quote:Most people do. Either you'll pick up on what you need to know, or go hire a CPA to help you. CPA's exist to make life easier for people.
I feel very lost when it comes to taxes. Is this normal or will I understand it as I go?
Hope that helps, and I hope Im not way off on my suggestions.
This post was edited on 10/23/12 at 5:12 pm
Posted on 10/23/12 at 6:07 pm to GoHoGsGo06
Some basics:
Save / invest 15% of your income.
Avoid having payments on vehicles.
Don't smoke.
Save / invest 15% of your income.
Avoid having payments on vehicles.
Don't smoke.
Posted on 10/23/12 at 6:44 pm to Cholo
quote:
Save / invest 15% of your income.
Avoid having payments on vehicles.
Fair warning, it might be tough to get by on 85% of your income as a college student part-timer. If you make 20k and invest 15% of that, you've got 17k before taxes; after taxes (assuming your investments are tax deductible, like a traditional IRA or 401k), somewhere around 15k. Comes out to about 1275/mo. Rent, utilities, cell phone, gas, food, incidentals, etc will eat that amount away if you aren't especially frugal.
Financing a vehicle isn't the worst thing that you can do if you can get a nice enough rate and keep it reasonable. Probably not conditions that can be taken for granted if you're a college student, but it's not a bad bet to invest the amount you've financed assuming you have the cash on hand to pay for it in full and you can secure a low fixed rate.
This post was edited on 10/23/12 at 6:46 pm
Posted on 10/23/12 at 7:34 pm to Reuben32
quote:
I work full time at a hospital in a sterilization department. All my money goes to rent/food.
Are you paying too much for rent/food? Can you find areas to cut out so you can save a little. At your age if you could save even $100/month and invest it - 40 years from now that $100/month investment could be worth more than $500K. At your age, any amount you can save will benefit you later in life.
I would encourage you to put yourself on a strict written budget. Spend your monthly take home money on paper the first of the month (everything - rent/food/utilities/gas/insurance/entertainment, etc. and don't deviate if you can possibly avoid it.
Does your job right now offer a 401(k)? If so, do they match a percentage. If so, put in whatever will get you the match. That could be your $100/month.
Take out as few a student loans as you can. If it makes sense to sit out a semester and work more hours, it might be the right move. You have to decide that.
I was horrible with money when I was your age, and I'm paying the price now trying to catch up. Good luck, and you are to be commended at your age for considering these things and planning for your future. You won't regret it later in life.
Posted on 10/25/12 at 12:17 am to kywildcatfanone
Yes I can not save that much, if any at all. Sometimes I will get money from other sources, but that's not very often.
I pay for my rent, utilities, cable, food, gas, and gym so i'm pretty much broke at the end of each month. I have enough put back for next semesters tuition but thats about it.
I just really wish there was a basic money guide for guys in their 20's. Like where all the terminology is explained. sometimes I'm reading stuff on this board and I understand the main concept of things but then it gets to talk with a lot of different acronyms and obscure terms that I just have no idea about.
I pay for my rent, utilities, cable, food, gas, and gym so i'm pretty much broke at the end of each month. I have enough put back for next semesters tuition but thats about it.
I just really wish there was a basic money guide for guys in their 20's. Like where all the terminology is explained. sometimes I'm reading stuff on this board and I understand the main concept of things but then it gets to talk with a lot of different acronyms and obscure terms that I just have no idea about.
Posted on 10/25/12 at 12:27 am to Reuben32
quote:
Yes I can not save that much, if any at all. Sometimes I will get money from other sources, but that's not very often.
I pay for my rent, utilities, cable, food, gas, and gym so i'm pretty much broke at the end of each month. I have enough put back for next semesters tuition but thats about it.
I just really wish there was a basic money guide for guys in their 20's. Like where all the terminology is explained. sometimes I'm reading stuff on this board and I understand the main concept of things but then it gets to talk with a lot of different acronyms and obscure terms that I just have no idea about.
Term Glossaries
I've read most of The Truth About Money by Ric Edelman on the suggestion of a friend, I found it to be a very good intro on the basics of investing, particularly long-term investing.
Posted on 10/25/12 at 8:21 am to Reuben32
quote:
I just really wish there was a basic money guide for guys in their 20's. Like where all the terminology is explained. sometimes I'm reading stuff on this board and I understand the main concept of things but then it gets to talk with a lot of different acronyms and obscure terms that I just have no idea about.
I'm serious here. Call Dave Ramsey's show during show hours and explain what is going on with you and I'm sure he will send you some of his books and materials for free. He does that all the time for folks in your situation.
Posted on 10/25/12 at 8:33 am to Reuben32
quote:
What should I be doing to prepare for retirement(long ways way I know)?
You should be ignoring it right now. You don't have enough to save to put toward retirement and no reason to even be worrying about it.
When you graduate and get a good job that pays good money, you start saving. Right now, you spend what little you have and enjoy it.
Posted on 10/25/12 at 8:45 am to Tiger n Miami AU83
quote:
You should be ignoring it right now. You don't have enough to save to put toward retirement and no reason to even be worrying about it.
When you graduate and get a good job that pays good money, you start saving. Right now, you spend what little you have and enjoy it.
I tend to agree with this.
Once you graduate, you'll be (hopefully) earning what you currently earn + X, so when you get that first job, just start saving X and make no lifestyle changes for as long as you can. In the meantime, start researching different vehicles for saving and investing.
At 20, it's good that you are thinking about this but don't freak out about it. Do the above and by your mid 20s you'll be in fantastic shape.
Posted on 10/25/12 at 10:01 pm to Reuben32
First off, props and 
for this:
Most people insist that's impossible and you are proving they are all pussies.
Start by tracking all of your expenses. Just build a spreadsheet with columns for "date," "amount," "expense category," ect. If you are as a good a tightwad as you sound to be, the glaring problems will become obvious very quickly.
A few watch-outs if you haven't already figured it out are you cel bill, cable, eating out (at a restaurant. Cunnilingus is free. Play your cards right and you may be paid in return), and,
alcohol. Not saying you can't do any of these things, just in measured amounts.
A credit card is a good thing. It makes it easier to track expenses and you get reward points. In your case, I would look for a card that pays cash rewards. Just pay it off every month.
And don't feel bad if you aren't able to put much/any money into a retirement account. You ARE still young and you stand to earn a good degree debt free. That's a great accomplishment.
for this: quote:
My situation is I'm a college student currently playing for my own tuition.
Most people insist that's impossible and you are proving they are all pussies.
Start by tracking all of your expenses. Just build a spreadsheet with columns for "date," "amount," "expense category," ect. If you are as a good a tightwad as you sound to be, the glaring problems will become obvious very quickly.
A few watch-outs if you haven't already figured it out are you cel bill, cable, eating out (at a restaurant. Cunnilingus is free. Play your cards right and you may be paid in return), and,
alcohol. Not saying you can't do any of these things, just in measured amounts. A credit card is a good thing. It makes it easier to track expenses and you get reward points. In your case, I would look for a card that pays cash rewards. Just pay it off every month.
And don't feel bad if you aren't able to put much/any money into a retirement account. You ARE still young and you stand to earn a good degree debt free. That's a great accomplishment.
Posted on 10/25/12 at 10:33 pm to Reuben32
quote:
What should I be doing to prepare for retirement(long ways way I know)?
It's good to prepare for retirement but you are 20 right? With all due respect, your highest priority goal right now should be to increase income. There isn't much point in planning for savings until you have excess income.
Posted on 10/26/12 at 4:10 am to Reuben32
I've said this before, but I would just do my best to avoid debt. Pay off the credit card every month and avoid student loans, and you will be doing better than at least 75% of other students.
The thing that would most help your retirement would be to finish your undergraduate degree on time (four years) and get into PT school immediately, avoiding getting put on the waiting list for a year, which basically gives you another year of earnings before retirement.
Probably the most important thing for maximizing lifetime earning potential would be to get into LSU's physical therapy school. You're going to need loans for PT school and payback on loans for LSU PT school is a hell of a lot cheaper than a private school like St. Augustine.
Use the extra 50-100 bucks a month you have now to have fun, take road trips, etc.
The thing that would most help your retirement would be to finish your undergraduate degree on time (four years) and get into PT school immediately, avoiding getting put on the waiting list for a year, which basically gives you another year of earnings before retirement.
Probably the most important thing for maximizing lifetime earning potential would be to get into LSU's physical therapy school. You're going to need loans for PT school and payback on loans for LSU PT school is a hell of a lot cheaper than a private school like St. Augustine.
Use the extra 50-100 bucks a month you have now to have fun, take road trips, etc.
Posted on 10/26/12 at 7:19 am to foshizzle
quote:
With all due respect, your highest priority goal right now should be to increase income.
And pussy. 20 yo pussy is far cheaper when you are 20 than when you are 40.
Posted on 10/28/12 at 3:08 pm to Reuben32
quote:
What should I be doing to prepare for retirement(long ways way I know)?
What are some differences between different accounts? There are so many you guys talk about I feel a bit overwhelmed.
I feel very lost when it comes to taxes. Is this normal or will I understand it as I go?
Is there any basic guide I could look at to help me out?
1. Re: retirement, right now just concentrate on keeping your inevitable student debt minimized as much as possible. Study your arse off and get into PT school and get a good job. This is your first step to retirement.
2. There literally are tons of accounts...in your situation, I honestly wouldn't even worry about that right now. Especially since you're barely making ends meat...but if you absolutely want to put something away right now, I would opt for a Roth IRA (any financial house will have these) unless your job lets you have a 401k and they match
3. Taxes really aren't complicated unless you get into things like owning your own busines, rental property, etc...Even then, you can do everything on your own online for less than $100.
4. A book I would suggest you start with is I will teach you to be rich - the author is kind of arrogant, but it's no BS guide to personal finance
This post was edited on 10/28/12 at 3:11 pm
Posted on 10/28/12 at 5:06 pm to cpsilo1
go out and have some fun. get the things you want before getting married. if not, you may never get them. boat , 4 wheeler, big TV, etc.
don't go in debt, but enjoy it man....
also, one of my friends saved money hand over fist with small jobs. about 17 grand. new wife went thru the whole thing in no time.
PS, don't tell anyone what you save either. that's your money.
don't go in debt, but enjoy it man....
also, one of my friends saved money hand over fist with small jobs. about 17 grand. new wife went thru the whole thing in no time.
PS, don't tell anyone what you save either. that's your money.
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