Saving

[Jcpdragonx]

saved: 13.5k
spent 5k on...
phone- $500
gym - $550
protein - $150
festivals - $500
clothes - $300
car sound system - $570 (without subs...)
computer $1.2k
video games $100
bus $50
rest on food and going out.

this is working as a casual, i used to get 1-3 shifts (3-5hr) for about 6 months but now im getting 4-7. parents gave me their old car (worth 2.5k, mint condition) instead of selling it since its worth gold to me. im 20 and fortunate ive had to pay sfa expenses, however this year ill have to pay insurance, rego and petrol, which is still nothing to most people. yes i live with my parents.

 

[Scotland]

In 6 months you earned $13.5k and spent $5k of it or you earned $18.5k and spent $5k of it?

Either way, good going for someone in your position.

 

[Hellgood]

Turned 21 a few months back and decided it's time to put a bit more thought into this so am going to see a financial planner. But would be very interested in hearing any comments/tips from a second opinion here!

Have 20k in a savings account in bank, interest is pretty rubbish at the moment so usually get approx $60 bucks back a month, spoken with the bank and they agree a term deposit isn't really an option. Also have approx 2k worth in shares, not sure whether to stay out of this or get in further and build something up with dividends from 'blue chip' companies which has been mostly my strategy so far (not that I've gone in with a lot of science to base this on).

Honestly don't know where I stand amongst other people of the same age, never really discuss money with mates so if anyone could give any insights that would be great?

Personal situation is that I have finished uni, have a full time job and am paying a couple of hundred a week for rent.

 

[Old M8]

Turned 21 a few months back and decided it's time to put a bit more thought into this so am going to see a financial planner. But would be very interested in hearing any comments/tips from a second opinion here!

Have 20k in a savings account in bank, interest is pretty rubbish at the moment so usually get approx $60 bucks back a month, spoken with the bank and they agree a term deposit isn't really an option. Also have approx 2k worth in shares, not sure whether to stay out of this or get in further and build something up with dividends from 'blue chip' companies which has been mostly my strategy so far (not that I've gone in with a lot of science to base this on).

Honestly don't know where I stand amongst other people of the same age, never really discuss money with mates so if anyone could give any insights that would be great?

Personal situation is that I have finished uni, have a full time job and am paying a couple of hundred a week for rent.

I think what you're doing is quite good. Financial planners will tell you to go heavily into the share market via a managed fund because you're still young, but I don't believe you should. You need to remember everyone has the same idea as you, they want better returns then the bank interest currently offered. But what if interest rates go up? People start getting out of the market and back into cash. You don't want to get caught with your savings heavily invested if that happens. I don't think it's a coincidence the market is getting close to all time highs, while interest rates are at all time lows.

Word of warning, if you are going to your banks financial planner, don't go. Find an independent one, bank financial planners will sting you for all kinds of coin. Horrible, blood sucking people. They want your money. I've saw someone a year ago paying $1,000 upfront to get work done, and $1,000 per year as an ongoing fee for the $60,000 they invested, which was inappropriately placed into margin loans. The guy was 60 FFS. Couldn't believe it. That's not to say independent Financial planners won't try and suck as much out of you as they can, they want to make money, but they are generally much more reasonable. Don't get too sucked in by how hard they make the work out to be to justify their fee, if you think it's exuberant, don't pay it.

I think the most you'll get from a financial planner at your age will come in that initial appointment, which can be free depending on where you go. They can be very helpful, but they will absolutely try to sell you something. I used to work in the industry for years. Of course all of the above isn't financial advice, you should seek financial help with any decisions and all that crap.

 

[Hellgood]

Cheers mate, yeah going to an independent planner recommended by a relative.

Not sure if I'll even do anything with the advice, not keen on getting involved in anything too complicated as I'm pretty conservative - but just think I need to start opening my eyes to what opportunities are out there.

 

[RobbieGray17]

I trialed goodbudget app, was impossible to use free version but saw the potential so paid the $60. Its clean and simple. Takes some Getting used to.but its amazing how good it helps keep track of all your money. I just took $30 out of games to put into buying clothes. I like the accountability. I feel like im working less, spending on more worthwile things, doing more and saving more. Im only $ 150 behind budget cos of early bills

 

[Mootsy]

I think the only way to save these days is to rent/board cheap or stay with family and save 25-50% of your salary in an account with some interest, maybe 2-3%.

Not easy though. Cant imagine what saving is like for people renting or with a mortgage, must be very tedious and slow moving. (they probably don't save much).

Professional working couples would probably be saving a bit more.

It would be very slow and tedious, but i guess that's how things go in this expensive climate.

 

[Hamingja]

I think the most you'll get from a financial planner at your age will come in that initial appointment, which can be free depending on where you go. They can be very helpful, but they will absolutely try to sell you something. I used to work in the industry for years. Of course all of the above isn't financial advice, you should seek financial help with any decisions and all that crap.

Unless you have the financial literacy of some of the AFL players that can't pay their phone bills etc by themselves then a planner is a waste of time for anyone under 50 IMO. The only place they have value (a good honest one at that!) is transition to retirement.

 

[Power Raid]

I think the only way to save these days is to rent/board cheap or stay with family and save 25-50% of your salary in an account with some interest, maybe 2-3%.

Not easy though. Cant imagine what saving is like for people renting or with a mortgage, must be very tedious and slow moving. (they probably don't save much).

Professional working couples would probably be saving a bit more.

It would be very slow and tedious, but i guess that's how things go in this expensive climate.

yep

the secret to wealth is usually a two step process. most people don't have an expense problem, they have a revenue problem.

saving $10k a year will get you nowhere fast, yet it is hard to achieve when you are in your 20s. The secret is to get your income up in the 6 figures but to do that usually takes and education and years of experience or capital. Thus staying on top of your expenses, like you highlighted is so important.

 

[Maester]

The average annual return of the Australian stock market (including dividends) over the past 30 years is 11.7%. The US market 11.2%. https://www.vanguardinvestments.com...om/Vanguard-releases-the-2014-Index-Chart.jsp

If you have time on your side it's a no brainer investing regularly in good quality businesses and letting the power of compounding work for you.

A recent quote from Warren Buffett:

"Stock prices will always be far more volatile than cash-equivalent holdings. Over the long term, however, currency-denominated instruments are riskier investments – far riskier investments – than widely diversified stock portfolios that are bought over time and that are owned in a manner invoking only token fees and commissions. [The long-term investor's] focus should remain fixed on attaining significant gains in purchasing power over their investing lifetime. For them, a diversified equity portfolio, bought over time, will prove far less risky than dollar-based securities."

 

[Power Raid]

The average annual return of the Australian stock market (including dividends) over the past 30 years is 11.7%. The US market 11.2%. https://www.vanguardinvestments.com...om/Vanguard-releases-the-2014-Index-Chart.jsp

If you have time on your side it's a no brainer investing regularly in good quality businesses and letting the power of compounding work for you.

A recent quote from Warren Buffett:

"Stock prices will always be far more volatile than cash-equivalent holdings. Over the long term, however, currency-denominated instruments are riskier investments – far riskier investments – than widely diversified stock portfolios that are bought over time and that are owned in a manner invoking only token fees and commissions. [The long-term investor's] focus should remain fixed on attaining significant gains in purchasing power over their investing lifetime. For them, a diversified equity portfolio, bought over time, will prove far less risky than dollar-based securities."

better still bonds with convertible equity kickers

10% yield with upside or two to three times as much

they are not available to institutional investor though. you can thank our protective governments for that.

 

[Kcrack]

Any of you guys parents? If so what have you done for your kid(s)? I'm putting away a lousy $10 a week so when my son turn 18, there should be around 10k. Is there more I can do?

 

[Old M8]

Any of you guys parents? If so what have you done for your kid(s)? I'm putting away a lousy $10 a week so when my son turn 18, there should be around 10k. Is there more I can do?

Depending on how old your son is you could put it into some shares with a managed fund. If you've got a timeframe of 15+ years I think you'd probably earn a fair bit more then just interest.

But $10 a week is great. A $10,000 present at 18 is a lot of money.

 

[Power Raid]

Any of you guys parents? If so what have you done for your kid(s)? I'm putting away a lousy $10 a week so when my son turn 18, there should be around 10k. Is there more I can do?

a better way is pay an extra $10 a week of your mortgage. Then pay the money plus interest saved to your kid.

If you invest in shares you will have to pay tax. Where you interest savings is not taxable.

 

[treefingers]

Can anyone recommend a good bank to open a savings account with? I'm with Bendigo Bank but want to use a separate bank so I can put it away and forget about it, without being able to access it easily.

This one seems decent.

 

[Kcrack]

a better way is pay an extra $10 a week of your mortgage. Then pay the money plus interest saved to your kid.

If you invest in shares you will have to pay tax. Where you interest savings is not taxable.

The feels when still renting.

-_-

 

[Hamingja]

Can anyone recommend a good bank to open a savings account with? I'm with Bendigo Bank but want to use a separate bank so I can put it away and forget about it, without being able to access it easily.

This one seems decent.

How long are you looking to keep the money in there? After 3 months the interest rate on that one drops to 2%. Also you need to have a transaction account with them to link to the savings account. The savings account will have no fee but you would have to check to see if the transaction account they also make you open has any. The tricks of the banks right there.

 

[Jordie_tackles]

Any of you guys parents? If so what have you done for your kid(s)? I'm putting away a lousy $10 a week so when my son turn 18, there should be around 10k. Is there more I can do?

Still so much better than most, not many kids getting a 10k gift imo

 

[Kcrack]

Still so much better than most, not many kids getting a 10k gift imo

Won't give him the full 10k. Assuming he's a good kid, I'll think about offering enough for a trip overseas or a first car etc.

 

[PP34]

Still so much better than most, not many kids getting a 10k gift imo

Yeah I got an 18th with grog supplied and a trip to the US beforehand (I owe my parents for most of it though).

Would be wary of giving a kid 10k at age 18. Coming from someone that age the money might not be too well spent unless they decide on buying a car or something worthwhile.

 

[Jordie_tackles]

Yeah I got an 18th with grog supplied and a trip to the US beforehand (I owe my parents for most of it though).

Would be wary of giving a kid 10k at age 18. Coming from someone that age the money might not be too well spent unless they decide on buying a car or something worthwhile.

Yeah of course I would place some restriction on it

 

[John of all Johns]

Lucky kid!!! I got sweet F all!!! 21 was a bbq. 18th was sleeping at the drive ins!!!
So trust me your doing very well and be proud of your self!!

My kids will get the same one day as you suggested as I think its a great incentive and a great goal for you as well!!

My question is, what do you mean pay it off of your mortgage then give him the same amount of money and interest? how would that work? can you explain further?

 

[Jordie_tackles]

Lucky kid!!! I got sweet F all!!! 21 was a bbq. 18th was sleeping at the drive ins!!!
So trust me your doing very well and be proud of your self!!

My kids will get the same one day as you suggested as I think its a great incentive and a great goal for you as well!!

My question is, what do you mean pay it off of your mortgage then give him the same amount of money and interest? how would that work? can you explain further?

I think he means use that money to pay off your mortgage quicker instead of sitting in the bank earning low interest, then once your mortgage is paid off you arnt paying interest on the loan and can the. Save the 10K or what ever plus the interest you would have paid on the mortgage over that extra time.

 

[Rosenda]

I read this blog here http://www.billfixer.com/running-ou...run-out-of-money-before-the-end-of-the-month/ I found it to be very informative where it says to write down all the expenses and see where it's all going. Include all hidden expenses like that of vacation travel, holiday gifts and medical expenses. Sum them up and calculate your current standard of living. Create an essential and non-essential column and categorize your expenses. Out of which non-essential list can either be eliminated or reduced. Review receipts and bank statements to see where you're currently spending money. There are a number of online tools that you can use to set up and track your budget expenses.Accountability is critical. If you can enlist a friend or loved one to help you stay on track, share your goals with them and give them permission to keep an eye on your spending. These tips worked for me. Hope it works for you.

 

[Astro_]

Unless you have the financial literacy of some of the AFL players that can't pay their phone bills etc by themselves then a planner is a waste of time for anyone under 50 IMO. The only place they have value (a good honest one at that!) is transition to retirement.

Yeah not entirely true. Find a planner who helps set you a spending and savings plan aligned to your financial and lifestyle goals, and then mentors and keeps you accountable on a weekly / monthly basis and see the value they add, positive difference they make.

If the under 50 demographic don't require a planner, why are so many young ones struggling to purchase a house or up to their eye balls in credit card debt?

Problem is most planner don't focus on cash flow, which I believe has the biggest influence in someone achieving the goals, so the issue is finding one has has the model and capacity to do so.