Savings Plan advice?

Question

Hi! My husband and I are a young newlywed couple, and he's in the military as of now. I feel like we basically live paycheck to paycheck. Theres never really any extra money to put into savings. We always put a little into it, but then end up needing to spend it. I just got a part time job, so we'll be making a little more money each month, so im wondering what would be a good savings plan for us? We only have one car, and will need to buy a second as well as just to have a cushion of money if anything happens. Does anyone have any advice in this category!? I've heard a little about CD's & money markets, but I'm not sure what they are.. Any advice would be appreciated! thanks sooo much!!

Answer 1

Pay your self first. You must treat your saving like another bill that you have to pay at least ones a month. Human nature will tell you to spend all your money, and you will have no idea of what you did with that money. Now that you are making more money at you part time job you should be able to live pay check to pay check. What I mean is you survived so far with the income that you were making, and you should be able to save 100% of the money that you are making on your new job.

Look at your first paycheck. Open an investment vehicle,  and set an automatic investment on the day that you get paid. If you have the discipline to save look at what will happen:

$1/mo @ 12% for 20 years => $1 000

$100/mo @ 12% for 20 years => $100 000

$250/mo @ 12% for 20 years => $250 000

If you have another 20 years and you don't invest another dime:

$1 @ 12% for 20 years => $11

$100 000 @ 12% for 20 years => $1.1Million

$250 000 @ 12% for 20 years => $2.75 Million

For more info check my blog.

Good Luck