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best savings option with low income

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pdizz1e
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best savings option with low income  Reply with quote  

Hi all,

I am a graduate student still paying tuition but also have a co-op position that pays well enough for me to have a bit of spare cash if I live at home and live frugally. I would love to start saving something like 10% depending on my expenses that month.

Since 10% of what I make is not a huge number, what would be the best way to invest this money? I have a savings account but I believe the interest on that is somewhere around .5% which is essentially nothing.
Post Mon Jan 02, 2012 2:26 am
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coaster
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Good for you!! I commend you on your plan to begin saving 10% of your income; that's the first step toward financial success. And you know what they say about the first step..... Laughing

.... so, for now, I wouldn't be too concerned about your return. I think the main payoff for this first step is just in the development of the discipline and the good habit patterns. When you have several thousand saved up, then you can start thinking about where to put it for a better return. Meantime, just your sense of accomplishment will be your main reward.

Best wishes and good luck!! Smile

~Tim~
Post Mon Jan 02, 2012 7:22 am
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KatherineLee88
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Although I largely agree with coaster on this,

if you're saving $100+ month you could drop the money into a Roth IRA.
I currently am a PhD student and take about 1800/mo home in a paycheck from the University. I put $100 of that into a Roth IRA every month.

However, if you're still paying tuition, that means you're still taking on student debt? If so, perhaps you would be better saving a few hundred for extreme emergencies and then using the other savings towards paying off some of your student debt.

I balance my Roth IRA savings with student loan repayment, but tend more towards the loan repayment. I feel like putting it towards a Roth IRA or student loans could be the better method than letting it sit around (but do put aside some sort of emergency reserve for yourself).
Post Mon Jan 02, 2012 5:32 pm
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littleroc02us
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I'll tell you that from experience when I graduated from college in the mid 90's the worst part of keeping my school loan until I paid them off in 2006 was just having that thorn in my side. It was always there and getting in the way of investing more money and having disposable cash lying around. I would suggest making sure you have enough savings to get you out of a bind, some blow money and the rest to pay for school loans while in school. I use to use my GI Montgomery bill to pay for school, while my 2 part time jobs helped pay for living expenses.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Mon May 14, 2012 5:42 pm
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MagdaO
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Post Thu May 17, 2012 3:36 pm
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cashdoctors
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I completely agree with Coaster.

Putting away that 10% each week is a great way to start yourself off, and I think you will be surprised at how much 5% will amount to after a year.

This small fund will be readily available in an emergency, not tied up in bonds or shares. Wait until you have a few thousand saved up and then consider where you might like to invest it. But I think it's important to still save yourself some cash for a rainy day - don't invest it all!

Good luck to you!
Post Mon May 21, 2012 3:41 am
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debedwards
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That's a great plan you have there. Saving 10% of your money is actually a good start. People with low income usually resort to putting their money in savings account but since you've mentioned that the return isn't that impressive I guess you have to explore your options some more like get into mutual funds, IDA or you can invest in Real Estate. But the key here is how you can discipline yourself in keeping a part of your money. It's more than enough that you're able to save something.

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Post Sat Jul 21, 2012 12:45 am
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Johnkewin
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Yes i agree with debe if you want to save your money try to go with real estate or insurance services its more safety when you putting your money in insurance is the best way to save your money for future.
Post Tue Jul 31, 2012 12:13 pm
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benzmen
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Good suggestions from all and the thought of saving is surely appreciable and need to encourage the same. In order to think about savings we have to think of our earnings too.. I think we have to focus more on earning than saving at the beginning of our financial career. Make saving is a habitual thing is pretty easy with some disciplined living and restrict expenditures.. as well earning money also the important thing.
Post Thu Nov 01, 2012 11:20 am
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Bolainmarsh8
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I do have student loan debt so I hadn't even thought about that but I should start paying that off. I do own a car but its got 140k+ miles on it and would love to replace it whenever I can afford to do so. Even though I work close to full time at the job, it is still technically part time and therefore don't get any retirement/benefits.
Post Fri Nov 16, 2012 2:32 pm
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oldguy
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quote:
I do own a car but its got 140k+ miles on it and would love to replace


What's wrong with it? Age? Rust? (Most modern cars provide 200,000 miles of trouble-free service.)
Post Fri Nov 16, 2012 4:14 pm
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Bolainmarsh9
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why don't you try getting a loan approved FIRST from a credit union, then buying your car. Dealerships can be so very tricky and will make you jump through hoops when you don't have too. IF you can avoid a cosigner then by all means work around it.
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Post Fri Nov 16, 2012 5:23 pm
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oldguy
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Well, you've covered the restaurants in Calgary, Edmonton, & Vancouver. How about Prince George? And Kamloops? (Bolainmarsh 7, 8, 9) Very Happy

Do you have any real questions? Or just having fun?
Post Fri Nov 16, 2012 7:45 pm
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Concatenate
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Good job on saving money, as long as you have an emergency fund ready in the bank you could start looking at investing.
Post Sun Nov 18, 2012 11:36 am
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