You will need a certain amount of that you have easy access too. But not too easy that you’ll spend it. Having an “internet savings” account is the best option. A company like ING Direct is great for that. They offer a high interest rate on the money. Have no limits on the amount that you need to deposit and you can deposit or withdraw funds electronically into your checking account.
Going through your money life, you should expect and plan for speed bumps. What are speed bumps? It’s those unexpected expenses that come up without planning for them. Like $300 to fix a “small” car problem. Or the $400 medical bill that the insurance won’t cover. Set aside $100 into an easy access savings account and each month add .5% or 1% of your income to this account until you get to a comfortable amount.
With the downturn in real estate, it reminds me of what I learned some time ago. Everything operates in cycles. Learning to understand cycles is crucial to long term money success. Cycles in the stock market. Cycles in real estate. Cycles in earning. Know when it goes up and when it goes down.
Are you spending a lot of money buying the $5 drinks at your favorite coffeehouse? Save money by trying regular coffee with cream and sugar. Many of the coffeehouses have other spices that you can use to make your own special drinks. So instead of spending $5 for the mixed drink, you can spend $1.50 instead.
You think Amazon.com has the best price on books? Not always! From the hundreds of books that I have bought, I always check the AddAll.com site, and many times there are other stores that offer the books at a much lower price than Amazon.com. The URL is used.addall.com. Check it out before buying your next book.
New research is out show how social influences affect people. Your friends and social circle has a lot of influence over you. This could also affect how you spend your money. If your friends are money conscious you will want to fit in. If they are not, you will not be checked in your spending.
Always ask for the student discount. An easy way to do this is ask for the “student version” of whatever you buy. You’d be surprised at how many business have special deal for students but only if you ask for them. Saving at restaurants, movie theaters, travel and in other business. All you have to do is ask. Now repeat after me “Do you have a student version of that?”. Good!
Do you have any goals for your financial life? or are you just letting things happen as they come along. Most people that never go above average have no goals. Decide today where you want to be in ten years, twenty years and at the end of your life.
“My employer is matching up to 5% of my salary in the company 401K, should I take advantage of it?” YES! This is free money. On top of giving you money, they are giving you another reason to start or increase your investments. The only thing is that you shouldn’t put all of the money into company stock (i.e. Enron).
Most companies and money institutions that loan out money now check your credit score. You should be checking your score at least monthly. This will prevent any nasty surprises that might occur in the future when you are ready to make a big purchase. Set up a way to check your credit score at least once a month.