"Luckybob" <luckybob[at]cox-internet.com> writes:

- quote -

You mean $150/month to save?

- quote -

That's a great idea. You might even end up with more "pots"
for your savings. Retirement, kids' college, new house, etc.
Different goals typically have different time horizons and
different risk tolerances.

The first things to do, though, are in _most_ cases -
1. build an emergency fund (enough to pay minimal living
expenses - rent, car payments, insurance, food, etc to
cover you for at least 3-6 months - maybe even more if
your job is not too steady or you're self employed).

2. pay off credit cards - they typically charge a much
higher rate of interest than any return on investment
you are likely to make in the stock market or anywhere
else - certainly higher than any guaranteed return.

The only exception to putting those two things first (and
some folks will, in fact, debate which of those thing to
do before the other) might be to maximize contributions
to an employer's 401k - especially if your employer provides
any kind of match. If your employer matches 50% of, say, the
first 5% of your salary that you put in, that's basically
free money. Take it.

After that, start laying out your goals, certainly maximize
opportunities within tax-advantaged investments - ie. even
if you don't get an employer match, maximizing the 401k is
a great idea (after paying down the credit cards!).

- quote -

The sooner you start, the better. Your two best friends
in this endeavor are time and thrift.

As far as incremental investments, many funds waive or have
very low minimums - so long as you commit to investing a
little more each month - some as little as $50/month.

I'm not going to recommend any specific funds - there are
many of them out there and I'm sure others will suggest all
sorts of them.

I will, however, _highly_ recommend that you:
(1) don't worry immediately about what fund - if you
take a couple of months to figure things out, don't
let that stop you from starting to save - stick the
money into a money market fund or a savings account
in the meantime. In the long run, you don't want the
bulk of your investments in cash (money market funds
and savings accounts are basically cash-equivalents),
but in the short run, there's nothing wrong with it.
There's no rush to figure out just the right funds.

(2) Do some reading. Coming here was a good step. Folks
around here recommend books all the time. I'll start -
especially for beginners, I think very highly of
Eric Tyson's books: Personal Finance for Dummies is
just excellent. Silly bright yellow cover, slightly
insulting title, excellent content - with worksheets,
very clear, plain writing, and it covers more than
just saving and investing - you're going to want to
look into insurance and other things, too.
I'll leave it to others to add more books. But I'd
certainly start there.



--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

In article <108mfuer3o86ge1[at]corp.supernews.com> , Luckybob
<luckybob[at]cox-internet.com> wrote:

- quote -

I would reclass these savings as (a) monthly cashflow, (b) 3 to 6
month emergency fund, and (c) retirement savings. For (a), you need
at least $1000 on hand to cover your monthly bills between paychecks
and to cover small unexpected things like a car issue something that
just pops up. For (b), this covers you in the event of a personal
disaster like getting layed off, having your car blow up, or other
event that interrupts your life. (c) is to cover you when you
retire so you don't end up living on beans and rice in your likely
very lengthy golden years.

If you would like to read a book that helps out in these areas and
provides encouragement to help keep you on track, head to your
local book superstore and check out the author Dave Ramsey and his
money makeover series of books.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ==================

The first 2 steps, build up your emergency savings, between 3-6 months of
fairly liquid money. Then meet any employer matches in company sponsored
retirement plans. If neither of you have one then get some IRA action going.

"Luckybob" <luckybob[at]cox-internet.com> wrote in message
news:108mfuer3o86ge1[at]corp.supernews.com...
- quote -

My wife and I have sat down and created a budget. After paying all bills and
calculating entertainment and misc charges, we have budgeted $150 dollars to
savings. I have split this into 3 groups of savings: Emergency, Short-term,
Long-term. Is this a good idea, or should I just have one savings. Another
question is, how do I invest what I have so that I can add money monthly. I
am new to the whole stock market and saving money. I am still young and
have plenty of time to save money, but I want to start now.

Thanks,
Luckybob