I save nearly every dollar I earn and it sucks.

[Kendo]

Great replies guys. Just to give a little detail about myself, I am fairly young and have been in the workforce for 7 years now. I am not even close to making a six figure salary as someone suggested but I do make what is considered middle class income so I am able to afford some luxuries in life. I recently got out of a long-term relationship with my girlfriend but even when I was with her, I found myself in the same situation. Yes paying for dates and gifts cost a lot but I was always a savvy shopper and frequently mixed fine dining with cheap eateries.

I think someone mentioned maxing out a 401(k) and investing. Is it wise to max it out completely or simply max out whatever my employer matches? And as far as investing, I am quite a newbie. Do I consult with an investment firm and have them manage my money for me regarding portfolios?

As far as hobbies, I do love music and going to the gym. But gyms are fairly cheap since I go every day and even though I pay for my music, buying 10 songs a month equates to $10. I guess I'll try to explore some more hobbies.

 

[Fazzy]

Choose something that you really like/ have always wanted and save towards
it. when you finally get it, you'll feel a great sense of achievement and will enjoy it loads. Thats how I got my Macbook Air. Took over a year of saving but felt awesome when I finally bought it 🙂

 

[lewis82]

Buy a big-ass heavy bike, get an even better work-out, and save a whack o' money.

Come on, isn't this nice? In fact I should not post it, it's almost pornographic. Who could resist such a nice bike? 😛


(Altough you raise a good point, the best riders do not train with heavy bikes, even though it could logically seem beneficial. 😉)

 

[elistan]

Taking out the usual expenses like rent, cable, phone, gym membership, and car insurance, the only thing I spend my money on is eating out occasionally. My last big purchase was a MacBook Air last year and even then, I only bought it due to the 20% Kindle Special Offers discount from Amazon so when I sell it, I'll actually end up making money. Before that my last computer purchases were in 2004 and 2008 so I buy one every 4 years.

I'm not a penny pincher or anything, I just don't have anything to buy. I already own a PS3 and an Xbox 360 that I bought a few years ago so I generally buy a few games at $20 when they become Greatest Hits and go on sale. And I bought an HDTV a few years back so I'm set there.

What does everyone spend their money on? Don't get me wrong. Saving is a very good thing. But you also have to enjoy life, no? A ton of my buddies are always complaining about how they have credit card bills and they are in debt, and yet I'm here on a message board asking for advice on things to buy.

- Max out your work's 401(k) match.

- Evaluate your 401(k)'s funds to determine if they're worth investing more in. (Look for low expense ratios, like 0.01%. Typically it'll be an index fund, rather than an actively managed mutual fund. Over time, the index fund will perform just as well or better. And put X% of your money into a bond fund, where X is your age. Rebalance every month. So if stock go way up, you sell them off to purchase cheaper bonds, and vice versa. Buy low, sell high - never try the chase/time the market.)

- Then either max out your 401(k) to the legal limit - $17,000 this year IIRC - or open an IRA with a financial institution with good funds. (Conventional wisdom says do as much pre-tax investing as possible since your income in retirement will likely be much lower than today's income, which means your tax bracket will be lower. However given the economic and political turmoil of the past few years, I don't know if that'll hold true. Personally, I'm hedging, so I have both pre-tax 401(k) and after-tax IRA investments, just in case we end up in a European style situation by the time I retire and have 50 or 80% taxation or whatever. Then again, imagine if Cain's 9/9/9 plan were implemented. Everybody with a 401(k) would do well to suck out every last penny from it as soon as possible.)

- Set aside cash for a mortgage down-payment. (Assuming you want your own place - home ownership isn't for everybody. Sure is much nicer than hearing your neighboor's alarm clock all weekend while they're away!)

- Set aside cash in case you get laid off. Happened to me once. Sucked. But I never had to worry about money.

- Figure out what you like to do for fun and do it. For me, it was a sports car and track tires. For others, it's century rides on a bicycle. Or a personal trainer to get you over a fitness hump. Actually, sounds like you already spend a bit on non-essential entertainment. 😉 Gym, HDTV, Xbox and PS3, MacBook Air, etc... That's more than I had the first few years out of college. You probably have a much better, middle-class-ish, materialistic life than you think you do, when comparing to your buddies or what's on reality TV.

 

[Firestar]

Did I read Zune?

Probably.

Aah.. so you were the one….. 😀

Yes, I was the one™.

 

[turtle777]

I think someone mentioned maxing out a 401(k) and investing. Is it wise to max it out completely or simply max out whatever my employer matches?

Only put in the 401k until you reach the employer match.
Then max out your yearly IRA contribution limit.

Also, build up a emergency cash stash of 4-6 months living expenses.

With the rest, buy gold 😀

And as far as investing, I am quite a newbie. Do I consult with an investment firm and have them manage my money for me regarding portfolios?

Having a managed portfolio is something that only makes sense if you have a significant 6 figure amount of money to invest.

More important than just handing someone else your money is to be knowledgable about finances and investing yourself.

I strongly recommend the site www.financialsense.com
All their articles and materials are free, as well as very good weekly podcasts, and their journalism is very professional.

-t

 

[NZed]

I'd say in this economy right now, save it first. Just my 2c.

 

[iJohnHenry]

Paper money is also a gamble in these times.

Perhaps some futures in precious metals needed for electronic circuitry?

No gold though. Too volatile.

Or buy cases of pork & beans.

 

[senseless]

This is a very legitimate question. Material possessions are not the key to longterm happiness. We think it is, but it's a Madison Avenue lie. Whatever we have, we will get used to and take for granted.

So, your reward is lack of worry and stress over not having enough to pay the bills. If you're looking for the next spending tier, buy a house. This falls under basic comfort and security, so it should be more rewarding than a 65" TV.

 

[iJohnHenry]

So, your reward is lack of worry and stress over not having enough to pay the bills. If you're looking for the next spending tier, buy a house. This falls under basic comfort and security, so it should be more rewarding than a 65" TV.

Keeping up with the Jones' is tough to combat.

But being free of debt is it's own reward.

 

[Melrose]

I don't think he's complaining about how he's making 100K+ and has more money than he know's what to do with it. He's spending his money on the essentials and that's it, and he has disposable income, which is good. He's living within his means. Him saving his money is a good thing, he shouldn't be obligated to give away his money to others. Who knows, his car could break down next week and need work done on it.

You like to donate your excess, which is cool, especially donating to the ASPCA or local animal shelters, but he's a young guy and may even want to buy an engagement ring one day and I'm not getting the impression that he's making enough to buy a Lamborghini every few years.

I guess I misunderstood his original post. Saving money is not bad; hardly. I just didn't understand if he was whining about how to spend it.

 

[MorphingDragon]

Come on, isn't this nice? In fact I should not post it, it's almost pornographic. Who could resist such a nice bike? 😛


(Altough you raise a good point, the best riders do not train with heavy bikes, even though it could logically seem beneficial. 😉)

I Prefer Mountain Bikes - they just let you do things that a road bike might not be so forgiving for.

 

[acidfast7]

If you're looking for the next spending tier, buy a house.

I disagree here. I know that Americans love houses (I had one when I lived there), but I wouldn't the home-owning lifestyle to my peers (German professionals.)

I would consider an urban co-op or condo, though (both in the US or Germany).

 

[Tsuchiya]

By all means spend, but material possessions probably aren't the way to go. Spend the money on experiences. For example take a holiday, learn an instrument or skill, see your favourite bands perform live etc. In the long run you'll be happier that you spent the money on things like that instead of a trinket or two that'll soon get forgotten about.

 

[lewis82]

I Prefer Mountain Bikes - they just let you do things that a road bike might not be so forgiving for.

The ideal bike for me would be a cyclo-cross bike. I like to ride on the local bike paths and take some trails along the way. With a cyclo-cross bike I could ride faster on the road and still very well on the trails as long as they are not too rough (I'm used to having a hardtail anyways).

Still I think my next bike will be a cross-country one, 29 inch for sure, and probably hardtail as it is lighter.

 

[7on]

Offer to pay for your buddies meals or something. Like when you all go out.

 

[turtle777]

Paper money is also a gamble in these times.

It's ok for a few more years, probably till late 2013 / mid 2014.

When the dominos fall in Europe (Greece, then the rest of the PIIGS), there will be a huge flight to safety (=USD). Next up is Japan blowing up. Again, everyone will flee into the USD. That's when you have to start to get out, because the US is the last shoe to drop.

-t