Your tips for managing my finances?
April 11, 2019 7:31 AM Subscribe
I am 33 years old, I am alone and I need some advice. How to plan for retirement? What are your solutions to save money? Do you have a financial advisor?
Have you decided to go with reer, or insurance? Or a house? Investments any? Help me find it!
Have you decided to go with reer, or insurance? Or a house? Investments any? Help me find it!
Best answer: Even though Reddit is questionable sometime, /r/personalfinance is made for this question and has a wiki with a lot of resources. Even though you're in your 30s, since you haven't really started, you might want to look at both their 18-25 and 25-35 sections, as well as the general advice.
Does your job have a 401k or similar retirement plan? Do they match your contributions? If so, contribute what you need to in order to get that matching contribution, since that's free money. I'm a lazy investor and my retirement is just in Vanguard index funds, which track the major stock indices and perform about as well as anything else short of amazing dumb luck, with no active input from me.
As far as saving goes, that depends a lot on your income and your bills. Do you have debt? People argue for focusing on the highest interest first (to minimize what you'll owe in interest over time), but also for focusing on the smallest total dollar amount first (to get a sense of achievement for reducing the number of bills). I'd go with the former, but I'm a math-y person.
The "economics is the dismal science" part of this is that the only way to save more money is to spend less money. I've been making a conscious effort to be more reasonable, but I do it mostly by tracking my month over month inflow/outflow and savings totals in a big spreadsheet. It's possible to get much more involved than that, but it's worked for me so far.
Do you have an emergency fund? It's recommended to have 3-6 months's savings stuffed away somewhere liquid (I use a high interest savings account with an online bank). Focus on building that, in parallel to retirement savings.
posted by Alterscape at 7:48 AM on April 11, 2019 [8 favorites]
Does your job have a 401k or similar retirement plan? Do they match your contributions? If so, contribute what you need to in order to get that matching contribution, since that's free money. I'm a lazy investor and my retirement is just in Vanguard index funds, which track the major stock indices and perform about as well as anything else short of amazing dumb luck, with no active input from me.
As far as saving goes, that depends a lot on your income and your bills. Do you have debt? People argue for focusing on the highest interest first (to minimize what you'll owe in interest over time), but also for focusing on the smallest total dollar amount first (to get a sense of achievement for reducing the number of bills). I'd go with the former, but I'm a math-y person.
The "economics is the dismal science" part of this is that the only way to save more money is to spend less money. I've been making a conscious effort to be more reasonable, but I do it mostly by tracking my month over month inflow/outflow and savings totals in a big spreadsheet. It's possible to get much more involved than that, but it's worked for me so far.
Do you have an emergency fund? It's recommended to have 3-6 months's savings stuffed away somewhere liquid (I use a high interest savings account with an online bank). Focus on building that, in parallel to retirement savings.
posted by Alterscape at 7:48 AM on April 11, 2019 [8 favorites]
Are you located in the U.S.?
posted by praemunire at 7:55 AM on April 11, 2019
posted by praemunire at 7:55 AM on April 11, 2019
For savings, nothing has been as helpful to me as utilizing my direct deposit of paychecks into two separate accounts. I have most of it go to my regular bank account, but a specific amount every paycheck is auto-deposited into a less-than-easy-to-get-to savings account that I use for emergency situations. While I do have a card I can use for that account, I have to go into the savings, transfer it to the checking account, and then go find that card.
Last year, I had to spend over $10K on a sick cat, and all of that money was available to me because I had spent the past 10 years just shuttling money into the account that I try to never really look at. It's one of the simplest forms of saving, but if it's automated and not easy to access, I find it's one of the best.
posted by xingcat at 8:01 AM on April 11, 2019 [2 favorites]
Last year, I had to spend over $10K on a sick cat, and all of that money was available to me because I had spent the past 10 years just shuttling money into the account that I try to never really look at. It's one of the simplest forms of saving, but if it's automated and not easy to access, I find it's one of the best.
posted by xingcat at 8:01 AM on April 11, 2019 [2 favorites]
So long as the religious talk doesn't bother you, most of Dave Ramsey's advice is pretty solid. He's got a free podcast if you want to get a sense of his approach.
posted by Twicketface at 8:04 AM on April 11, 2019 [1 favorite]
posted by Twicketface at 8:04 AM on April 11, 2019 [1 favorite]
Best answer: "Fee-based financial planner" is what you're lookng for. Figure out what kind of retirement you want, then go to them with your statements and list of assets and they'll figure out how to get you there, or what you need to change in order to make it possible (or give you a reality check).
Remember -- fee-based, you pay the fee -- otherwise you're not their customer, the bank/brokerage is, and they're working on commission.
posted by seanmpuckett at 9:17 AM on April 11, 2019 [1 favorite]
Remember -- fee-based, you pay the fee -- otherwise you're not their customer, the bank/brokerage is, and they're working on commission.
posted by seanmpuckett at 9:17 AM on April 11, 2019 [1 favorite]
Try to max out tax allowances for savings each year - in the UK this would be a private pension, ISA and personal savings allowance. I've never paid for a financial advisor though have used a mortgage broker that earned commission (as some more specialist mortgages are intermediary only). It's all fairly simple maths so read up on resources relevant to your location. Try to minimise debt interest and taxes, and maximise earned interest and investment income. Buy a house if you want to own a house but it's not always a financial advantage to.
posted by JonB at 9:35 AM on April 11, 2019
posted by JonB at 9:35 AM on April 11, 2019
Best answer: I'm guessing you're in Quebec from your mention of REER - if so, you will find r/personalfinancecanada far more relevant than the r/personalfinance one which, while also helpful, is very US-focused.
They have a very good wiki which will probably answer many of your questions. You will hear a lot about TFSA (this is CELI in French) and RRSP (this is REER), which are the two main retirement savings types in Canada - which one is better for you depends on your income.
You can learn more by reading the wiki, or by talking to a financial advisor if you prefer. Make sure you don't use an advisor who earns a commission based on what they sell you, including the ones trying to sell you mutual funds with high fees given to the bank.
posted by randomnity at 11:19 AM on April 11, 2019 [4 favorites]
They have a very good wiki which will probably answer many of your questions. You will hear a lot about TFSA (this is CELI in French) and RRSP (this is REER), which are the two main retirement savings types in Canada - which one is better for you depends on your income.
You can learn more by reading the wiki, or by talking to a financial advisor if you prefer. Make sure you don't use an advisor who earns a commission based on what they sell you, including the ones trying to sell you mutual funds with high fees given to the bank.
posted by randomnity at 11:19 AM on April 11, 2019 [4 favorites]
Can I address the "alone" part? Sure, saving with a partner is typically easier, financially, because you're splitting expenses. But the actual saving is (or should be) the same. Even if you had a partner, would you depend on them to save for you? So pick something and do it today. Open a savings account and set up a monthly payment (or reminder on your phone) so that you are always paying yourself first. Or if retirement is the bigger priority, start that today. Okay, maybe don't buy a house today, that one would probably be a mistake. You can always find someone who is trying to squeeze out that last dollar of investment return, but by far the biggest difference is between saving something and nothing.
posted by wnissen at 5:21 PM on April 11, 2019
posted by wnissen at 5:21 PM on April 11, 2019
Recently the woman who cleans our house decided to retire in her mid-50s. And about three years ago she invited me to a party celebrating her final mortgage payment. Both achievements impressed me especially as she did not grow up in a family with any means to transfer wealth inter-generationally. She told me that 30 years ago one of her clients advised her that as a self-employed person she should use a third of her earnings for living expenses, set aside a third for taxes and invest the rest with help from [local branch of well-known national wealth advisors]. In addition to her frugality, this simple formula served her very well.
posted by carmicha at 5:49 AM on April 12, 2019 [1 favorite]
posted by carmicha at 5:49 AM on April 12, 2019 [1 favorite]
I Will Teach You to Be Rich by Ramit Sethi
Don't let the off-putting name fool you. This short, straightforward book will singlehandedly turn your personal finances around. It's the book I've gifted most. Literally changed friends' lives.
One thing I love is how much he removes friction. For example, when he recommends setting up an account, he gives you 3 specific options, says which one he personally uses — and then gives specific instructions (including scripts for phone calls when needed).
posted by ialas at 9:09 AM on April 13, 2019 [1 favorite]
Don't let the off-putting name fool you. This short, straightforward book will singlehandedly turn your personal finances around. It's the book I've gifted most. Literally changed friends' lives.
One thing I love is how much he removes friction. For example, when he recommends setting up an account, he gives you 3 specific options, says which one he personally uses — and then gives specific instructions (including scripts for phone calls when needed).
posted by ialas at 9:09 AM on April 13, 2019 [1 favorite]
Response by poster: Well, thank's for all the answer. Since I don't have much time to read books about Finances (well that's just boring!) and I'm not really on Reddit (I tried, I swear), I decided to get some advices from la Financière des professionels (Yes, I'm in Quebec!). They crate a fiducie familiale for me, I don't know what is it in English, Family Trust? Well, for my situation, I think it's the best way to get a refund on my taxes and put that money I save in a fund. What did you get as tips from Reddit and books?
posted by NathalieBou at 6:41 AM on October 30, 2019
posted by NathalieBou at 6:41 AM on October 30, 2019
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posted by pinochiette at 7:44 AM on April 11, 2019