Need some guidiance.

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omgtain
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Need some guidiance.

Postby omgtain » Sun Dec 23, 2012 1:16 am

Hi all.
I'm 18, graduated High School this summer and just got my first job about a month ago.
I work ~30 hours a week @ $9.14 an hour.. So I pull in about $800 after taxes.
Right from the get-go I opened up two additional savings accounts with my bank account (BECU) and started throwing 10 - 15% into each.. Right now they're both at 90$ (180$ total).

I also applied for a credit card and got approved by Capital One. (Just to start building credit history)

My problem ?

I still have quite a bit of left over money... Out of $800, with nearly $200 of it in savings already.. I still have $200 left over.. Nothing to spend it on. (The money I did spend went towards gas, oil change, 3 sets of work uniforms and dog treats.. okok, and some coffee :oops: )

College is taken care of-- My grandma left me a $150k college fund.. I want to be a nurse, I will start college up in the Spring of 2013. I wanted to build up seniority at my work before having them work around my school schedule lol.

My job? I work at a grocery store (Safeway). So we have a union and 401k plans and stuff.. But I don't really know anything about it.. I'm a big saver.. I don't like going out places (unless walks with the dogs count?) and can do without many luxuries. I plan to live with my mum until I graduate college, it is cheaper and easier because moving with two 90lb dogs and a cat would be hectic and hard.

Should I open another savings account ? Learn about the 401k stuff (aka Enlighten me! :D ) ?
One savings account is an Emergency Fund for the dogs (I plan to build it up to $6k) and the other.. I don't know. Down payment for a car or house? An emergency fund FOR the car or house ?

Thankkk you ;o

alohabear
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Re: Need some guidiance.

Postby alohabear » Sun Dec 23, 2012 5:16 am

Hi omgtain. It sounds like you're off to a really good post-high school start. I'd suggest you start by doing research on the 401(k) Safeway offers. Do they provide a company match? What funds are available in the 401(k) for you to invest in? What do the fees look like? Is there a vesting period? Once you find answers to these questions, you'll be able to determine whether the 401(k) they offer is a good deal.

Northern light
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Re: Need some guidiance.

Postby Northern light » Sun Dec 23, 2012 12:31 pm

At you age, and in yout situation, saving up on a savings account seems like a good idear (dogs, car, house). Why do you need additional accounts - save everything on the one with best interest rate?

As far as the pension plan goes, I would go 100% equity through the cheapest possible way. A target fund with <0,2% fee would be great. If the company match your contribution - contribute to the max.

Make shure your college fund is in safe assets (savings account) since yu will use it the next couple of years.

Keep on the way you do, you seem to do great.

Kircheis
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Re: Need some guidiance.

Postby Kircheis » Sun Dec 23, 2012 10:36 pm

I think that having too much savings is a good problem to have. I think that you should think about doing the following:

1) Emergency fund - you could start by saving $1000, but work up to 3-6 months of expenses

2) 401k - you should definitely find out if Safeway will match any contribution. If they do, you should definitely participate, as it's "free" money. You should at least contribute to the level of the match.

3) Roth - If you can, you should contribute to a Roth IRA (the limit for 2013 will be $5,500). Any money you put in now will be grow tax free.

Good luck!

omgtain
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Re: Need some guidiance.

Postby omgtain » Mon Dec 24, 2012 3:22 am

Hi all, I tried to find some info/flyer at work about 401k and stuff but didn't have any luck. I'll have to ask my manager after holiday rush is over 'cause things are super busy lol.

My college money is in a trust fund with Morgan Stanley & Smith Barney (I Think thats what they are called, anyways.) and my uncle is my trustee, meaning I tell him what I need and he will pull out what is appropriate. I think some of it is invested in stocks but I don't really know about that, although I would love to learn.

I had the money in separate accounts because I didn't want to mix the money up, I guess. If I were to have multiple emergency funds for specific reasons (one for the dogs, one for the car, one for everyday stuff) I wouldn't want to dip into the wrong account for the wrong reason ? Should I just work on one account at a time (i.e. build up one account then start another)?

Thank you all !

Tightwad
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Re: Need some guidiance.

Postby Tightwad » Mon Dec 24, 2012 8:03 am

omgtain wrote:My college money is in a trust fund with Morgan Stanley & Smith Barney (I Think thats what they are called, anyways.)

I believe they changed their name to Morgan Stanley Wealth Management recently.

https://www.morganstanleyclientserv.com ... d=09252012

VinTek
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Re: Need some guidiance.

Postby VinTek » Mon Dec 24, 2012 9:27 am

You're in a great position and it's a good time to get an education on personal finance. When you get a little time, get yourself down to your local library and check out The Only Investment Guide You'll Ever Need by Andrew Tobias. It's a book I've been giving to high school/college graduates and newlyweds for years. When you've absorbed what the book has to say, come back and ask some more questions. But do read the book. It's not the do-all and be-all of personal finance and investing, but it'll give you a good foundation and keep you grounded when all the conflicting advice you'll eventually get reaches a crescendo.

N2Deep
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Re: Need some guidiance.

Postby N2Deep » Mon Dec 24, 2012 12:59 pm

What I do is set up dummy funds on paper to keep my different accounts seperated.

Basically I have my checking account and on paper I have a budget fund for the following:

Auto (gas, repairs)
Debt Reduction
Retirement funds
Pets
etc....

Then when payday comes I automatically move money out of my checking register (not the physical account) into one of the other budget funds register. Then if I buy a bag of dog food I'll pay for it with my debit card and then move the funds into the check register from my pets fund.

I think currently I have 6 budget funds and this keeps me from having to have 6 different accounts. This is a breeze to do with financial software. I personally use MS Money, but they quit making it a long time ago. Once you've done this for a couple of weeks it's like second nature and it goes smooth. I just log the expense and then do a transfer from the correct fund.

This way all my fund totals are seperate and I can see what I have in any one fund at a glance. However my actual money is in only one location which is great if you're earning interest.
I can not dwell over that to which I have no control...

DoingHomework
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Re: Need some guidiance.

Postby DoingHomework » Mon Dec 24, 2012 6:57 pm

While I agree with what others have said about your 401(k) plan, please be aware that Safeway received the dubious distinction a few years ago of having one of the worst 401(k) plans among major employers in the country a few ears ago. So definitely make sure you understand the fees and the vesting schedule. Once you have the details please post them here to get peoples' comments.

Since you seem to view Safeway as a stepping stone (they don't employ many nurses!), and because you are in a very low tax bracket, you would probably be better off just saving and then putting the money in an IRA when you have enough.

But really, congratulations on being so smart with your money so far!

Justus
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Re: Need some guidiance.

Postby Justus » Mon Dec 24, 2012 9:03 pm

DoingHomework wrote:While I agree with what others have said about your 401(k) plan, please be aware that Safeway received the dubious distinction a few years ago of having one of the worst 401(k) plans among major employers in the country a few ears ago. So definitely make sure you understand the fees and the vesting schedule. Once you have the details please post them here to get peoples' comments.



Safeway's 401k plan is rated by Brightscope.

http://www.brightscope.com/401k-rating/ ... And-Trust/

LeRainDrop
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Re: Need some guidiance.

Postby LeRainDrop » Tue Dec 25, 2012 9:39 am

Justus wrote:Safeway's 401k plan is rated by Brightscope.
http://www.brightscope.com/401k-rating/ ... And-Trust/

Thanks for that link, Justus. I'd never heard of that site before. I looked up my company's 401(k) and was interested to find that "Company Generosity" was rated "Above Average," considering that we get no employer match/contribution whatsoever. What would be considered average or below average -- the company takes money out of your 401(k)? :)

plantingourpennies
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Re: Need some guidiance.

Postby plantingourpennies » Tue Dec 25, 2012 12:03 pm

Good problem to have, and when you're just starting out there isn't really a "wrong" way to save that amount of money. I would personally vote for the emergency fund over the IRA.

Be careful with the 150K for college-consider making a goal to get your 4 year degree with the vast majority intact!

Best,
Mr. PoP
My experiences with frugality and slow wealth are at http://www.plantingourpennies.com/

stannius
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Re: Need some guidiance.

Postby stannius » Tue Jan 08, 2013 2:34 pm

LeRainDrop wrote:Thanks for that link, Justus. I'd never heard of that site before. I looked up my company's 401(k) and was interested to find that "Company Generosity" was rated "Above Average," considering that we get no employer match/contribution whatsoever. What would be considered average or below average -- the company takes money out of your 401(k)? :)


Brightscope's description of Company Generosity wrote:The plan's vesting schedule, eligibility periods, and the contributions to the plan by the company for the sole benefit of the participants.


A company match is presumably what the third component is referring to. Maybe because there is no match, the vesting schedule is listed as 100% immediately?


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