Overall, I agree with a lot of what has been posted, however most seem to be pretty much all or nothing on specific aspects. I have taken a generally more moderated approach in a number of areas.
First, absolutely start setting retirement funds aside today! No matter your age! I started out with a modest inheritance, but squandered it all away. I was young and brash...it was easy to make money back then, I probably won't ever make it to retirement anyway! WRONG on both counts! The economy changes, several times over a longish life. Saleable skillsets change over the years. Inflation also gets you over time. Paychecks never "keep up" with inflation over the long term. When I got my first car, a beat up 64 Impala SS, I paid 28.9 cents a gallon for premium. Here, now, we pay around $4.65 for regular. It just gets harder for most average schmoes to easily make significant money in later years.
I lucked out, had some good real estate sales the last 6- 8 years and was able to make full "catch up" contributions to an IRA each of those years. When I initially set up the IRA, I used a market account through a long time online brokerage. Simple, easy to use as a basic investment. Very minimal cost. Easy to research, on your brokerage site and elsewhere, a few recommended mutual funds oriented toward growth. Make your buy, then let it sit as a long term hold investment! Don't fret about "the market". Don't try to be a "trader" unless you REALLY know what is going on my people? you are doing. It goes up, it goes down. You don't actually "lose" money until you DO sell below what you paid for it. Most recommended Mutual funds will do far better than any bank savings account or CD. "Growth" funds may be considered riskier, but you want long term growth, not a big profit in a a couple months. Don't sell unless you have researched and decided to move to a different mutual fund. Don't take anything out of the IRA until you are required to at 73 years old or whatever current law requires. The money you put into the IRA, you do not pay income tax on for receiving it until you take it out of the IRA. This helps reduce your current year income tax obligation. When I reached a point where I had more available to invest than what I could contribute to the IRA, I opened a second, regular market account with the same brokerage, adding the same mutual funds to it. I only keep about two months worth of cash in a regular savings account, which, now that I am retired, I transfer as needed to regular checking. I plan to feed the regular savings from the regular market account when that becomes necessary. In addition, I have a stash of cash and gold, about 1/3 of my total funds, built up over roughly the same period as the IRA. I do not plan to need to withdraw from the IRA account until the required minimum distributions come due. They will just be moved to either the regular market account or regular savings account when needed. I'm fortunate to have a modestly healthy monthly retirement income, so my expectation is that I have about 25 years of funding based on current market values.
I never did budgeting in the past, but once I was in decision making mode for retirement, I did set up a spreadsheet to positively identify all regular recurring (monthly, quarterly, semi annual, and annual) payments, and a "range" for miscellaneous categories. It did take a little over a year to get a complete, accurate, set of numbers. You tend to forget about subscription renewals and other minor expenses that DO add up. This enabled me to evaluate the rationale and timing of retirement. Now, I track it month by month (Plenty of time to do so now!), only once per month on the first or second, after the retirement check comes in. I document the value of each of the above mentioned investments and cash. My strategy is, enjoy retirement, but keep an eye on the long game. I've got more time to research if I feel like it, but trying to outguess the market is where you can get into trouble. I'm, not doing options, puts, calls, or any of that. If I start approaching 50% loss of total value, I may need to reevaluate housing choice or location. About a year in, total value has actually increased, although I am sure there will be changes around election time. Overall, I am bullish on the US for the long term, so the election overall will not dramatically affect my investments over the longer term. I only use a credit card for online purchases, and pay it off the first of the following month. Credit cards usually have better protections for unauthorized use. With a Debit card, they directly remove your money and you have little chance of recovering unauthorized or disputed charges. Freeze your credit with the Big Three Credit Bureaus. You can still use your own existing credit cards/lines, but anyone that applies for new credit or tries to make changes to your account will not be successful.
With regard to some of the "all or nothing" ideas from prior posts, I too have cut back on restaurant meals, both fast and sit down, but I reduced from frequent, to only one fast food per week, one sit down every other month. You appreciate them much more when you don't have them daily! And, I'm not a terrible cook. I do still buy a better quality product for lunch meat, but most fresh meat comes from the "manager's special" bin. I also gave up canned soft drinks almost completely, down to maximum of one per day. Water is free and plentiful, I keep two, 2 liter jugs in the refer at all times, and that is what I drink the most...it must be COLD! I used an insulated lunch box for 20 years, keeping the water and my sandwiches or other goodies cold, whether going to work or out for a drive/walk.
I used a similar tactic with my auto loan as was previously mentioned for mortgage loans, paying extra after the first couple years, reducing the length of the term and amount of interest paid (dramatically). These loans now are typically 7 years or more! Calculate your total interest, it is insane, even at a 2% rate. Also, for cars AND for your owned home, PREVENTATIVE Maintenance is critical to follow through with, and the best way to "save" money. Prevention is always less costly than remediation, so establish a plan for your home and your car, identifying each element, and checking with the manufacturer, or with available "useful life" charts for the various elements of your residence, to determine maintenance intervals. Homeowners, water is your enemy! Regularly, once or twice a year, check for leaks...from the ceiling (bathroom above, or roof leak), from the baseboards (leak in the wall from a variety of possible sources), floors (generally near under counter water heaters, or plumbing fixtures either side of wall), inside of sink base cabinets and behind refrigerators, and around the perimeter of your basem*nt floors (foundation issues, gutter issues, sewer line issues). You must make proper repairs to these leaks, or the unseen damage will be ongoing. This can create mold issues as well, which can adversely affect your families health costing you even more!
A caveat for used cars and used appliances. For cars/trucks, TRACK YOUR SPENDING! Some of those lemons are burying you! I had a friend that was constantly either "fixing", or begging for a ride to the local "You Pull It", for his entire life. He could have easily leased a low cost vehicle and saved 1000's of dollars and years of life. And lots of aggravation for all who knew him. With regard to appliances, buying used is a crap shoot. As a Property Manager for a lot of years, I had owners that insisted on it, and more often than not they regretted it as the units failed horribly or repeatedly after the 90 day warranty was up. I always bought new, or when available "scratch and dent", from an actual wholesaler, and they would typically last 7 - 12 years depending on type of appliance. Finding a knowledgeable "technician" is challenging too. Usually they just change parts, rarely can they perform true testing and troubleshooting. To be fair, a lot of the components are not manufactured to be serviceable, in order to keep costs "down".
Depending on where you live, amazon can save you a lot if you do get "prime". If shipping is free, it's saving you the cost of gas to drive to the store, and the time involved. I'm a fan. Just be sure you are buying what you actually "need". Self discepline can be difficult! By the same token, DO check pricing closely. There are some things I purchase at Sam's Club that are cheaper than amazon. It pays to pay attention. I recently got a lesson in that with some fig bars. I thought the price was right, but when I received the amazon product it was only 2/3 of the count compared to Sam's. Ouch.
Great thread, hope this helps others...
