Helpful Money Hints…things that worked for me

This started out as a status update for Facebook but I decided to turn it into a blog entry when it got so long.

I don’t think I’m the best person to give financial advise but I was told by a few people maybe I should share some of the ways I’ve saved for my “early” retirement. If it helps anyone then that would be great. If it just goes in one ear and out the other at least I know I put it out there. Everything I’m about to say has already been said by a million and one people before. Wish I had started as soon as I began earning a paycheck…but hear goes.

1. Save at least 10% of everything you earn (even though it’s just $10)

2. If your employer offers a 401k plan or a Thrift Savings Plan (TSP), contribute at least 10% whether or not they match it. If you feel you cannot start at 10%, start at 3% and increase it by 1% every year until you get to at least 10%.

3. Contribute the maximum allowable to a Roth IRA annually.

4. Pay with cash as much as possible. If you do pay with credit cards to get the rewards (travel miles, cash back etc.,) pay off the balance when the bill arrives.

5. Save up for big purchases.

6. Build an emergency fund of at least three months living expenses.

7. If you have more money to invest after you’ve done all of that and taken care of your regular living expenses open a separate investment portfolio than your retirement portfolio (Roth IRA, TSP etc.,). You can always sell some stocks or mutual funds if you need to in case of an emergency and because you shouldn’t touch those until you are 59 & 1/2 years old. Also you can only contribute earned income to those types of accounts (if you stop earning money you will no longer be able to add to those accounts). These accounts will still keep working for you, earning dividends etc., you just won’t be able to add to them.

8. Increase the deductible on your car, home owners, rental insurance etc., and keep that amount in a liquid account in case you need it. It is not worth paying all that extra premium for a $200 deductible.

Advertisements

6 Replies to “Helpful Money Hints…things that worked for me”

  1. Great advice and its fundamental to becoming financially independent. A saying I often hear is “Its not how much you make, but how much you save.” Don’t be mistaken that you must make X amount in order to be comfortable. No matter what your income, if you save just a bit , you’d be surprised how it grows over time.

    1. Hi Catherine,

      Thanks for taking the time to read my blog and making a comment. You are absolutely correct “No matter what your income, if you save just a bit, you’d be surprised how it grows over time.”

      The power of compound interest.

  2. Good advice…“Making money isn’t hard in itself… What’s hard is to earn it doing something worth devoting one’s life to.” A Penny Saved is a Penny Earned.

    1. Thanks for reading and commenting Dottie. I really do hope to visit Boquete again Dottie. This year is out and I’m not sure about 2015 however, if all goes well I want to resume my travels in 2016.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s