Money Hacks for the Young Adult
As a young adult, nearing 30, and as a public school teacher… I understand how hard it is to build any type of long terms savings. It was important for me to start early, even though I don’t have much and get to work saving money for retirement, but in the mean time, that is why I work so hard on my house – sweat equity. Someday, I am hoping a couple of these house projects will pay off in resale value. However, I have also been researching a few different ways to save dollars that might seem unorthodox or weird. I am writing this post based on how I personally feel about these apps – not because I have been asked to write it.
- The first, and the one that has surprised me the most, is the Digit App. Digit is an app that monitors your accounts and sneakily, without you knowing, takes a little bit of money here or a couple of bucks there, and sticks it into a rainy day savings account. They text you daily updates about what your checking account balance is from your bank, they let you know if something big happens like – if your mortgage payment finally clears or if your paycheck just hit your account. It is wonderful.I have been using digit since September, 2016, and have saved over $2,050.00 without even realizing it!! They don’t take out money if you’re having trouble, and you can stop their process; I pause the service during the holidays every year. It is incredible. Now, even though I have researched them, I made the personal decision to transfer funds to my “real” savings account (the one with my bank) each time my Digit savings account hits $500.00.
- The second is equally interesting, though it doesn’t have such a mightily immediate return. It is called Acorns. It is an investing app. If you use a debit card and make a purchase that is… for example: $9.67 it will take the $.33, hoard it until you have $5.00, and then invest it into a portfolio for you. It just rounds up change to the nearest dollar saves it, and invests it. Again – you’ll never miss 33 cents… Now, I’ve been using this app for about the same amount of time, since September, and my portfolio is now at about $794.00. Not the biggest ever, but still. You can choose to add more money as you see fit in increments of $10, but when you think about it – since this is just using my spare “digital change” as it were, that isn’t too shabby. At least I have a chance to see some teeny, tiny growth.You also have the opportunity to choose the “risk” profile of your portfolio. I am currently on the highest risk model because I am a young woman without a family. It is also such a small amount of money that I feel confident taking higher risks with it. More risk, more reward. As I start to mature, if I ever have kids someday, if I ever have a bunch of money in this account, I may choose to lower my risk profile, but for now – let’s go, baby!
- Next on my list is a little crazy… a little “I’m a big kid now,” but let me tell you – I have never felt more confident or secure- ever. Last summer, 2017, I made the decision to go visit an Edward Jones genius. This particular agent was recommended to me by a teacher as someone who is passionate about helping educators plan for their futures since things in our state concerning education are pretty dire.I started by letting him explain everything to me and picking a relatively high risk mutual fund into which I could only put $100 a month to start. Then I took over some extra curricular responsibilities and bumped up my contributions an extra $50. Now, guys – I won’t lie. This was a sacrifice to me. Being without this money monthly is not easy. But I know that when I’m old and crotchety, I will feel secure. He helped explain what I needed to do to switch around things in my state-provided retirement account to DOUBLE its effectiveness (which I did and have already seen great return)… Teachers aren’t given an employer matching option, so we have to fend for ourselves. Making the most out of that provided account – since what ever money goes into it is only our anyway – is a huge deal. If you work for a company that provides you with any sort of retirement account, I highly suggest you do your research! Start early for more dollahz later! Guys, I had my yearly meeting yesterday, and I am being switched to a better performing fund (with no fees because it is in the same investing family), and if I continue doing EXACTLY what I am doing right now, I will have over half a million dollars if I retire early (that was my plan). If I keep working through different specified ages, through all of the various scenarios we ran, I could end up leaving potential beneficiaries some crazy decent money when I croak – after living a VERY comfortable life in my sunset years on top of that. Ideally, I would love to bump up my monthly contributions to $250 a month in order to have over one million dollars when I retire. This is NOT counting Social Security or any sort of educator pension (if that is still a thing). This is strictly from my preparation with Edward Jones NOW as a 28 year old human. Friends, you don’t HAVE to have a lot of money to start investing. You don’t have to have a huge chunk to get started. In fact, these investing agents are thrilled when they see younger blood walk through their doors because that means that they are preparing for their futures instead of waiting until the last minute and panicking. Because of that, they work hard for you! If I can do it – you most certainly can. Think about it. Do some research and pick the investing firm that feels right to you! Get started now. Whatever age you are! Now is always better than tomorrow!!
- The last thing I will mention here is a portion of the Dave Ramsey method of saving money and managing debt. I may write something up about him later, but you could just Google his methods and learn a lot more. He also has a radio show and tons of books! However, his envelope method of spending is great. I do it myself! What you do is you create an envelope for each of your major areas of spending outside of bills you pay online. An example list would be: gas, groceries, take out meals (including coffee, or in my world, tea!), extraneous fun, etc.Once you’ve made your list, you determine how much money you can, or rather should, spend on each category. Then once your paycheck hits your accounts and any ordinary bills are taken care of, you draw cash out of your account to place in each envelope that has been appropriately labeled. The rule is… You are NOT allowed to go over the amount in each envelope for each category. If you spent all the money in your ‘take out meal’ envelope for that pay period, you’re eating at home until your next paycheck. I make it like a game – I see how much I can leave left over in each envelope each pay period! You’ll be surprised at how much money you save. What I do is I take the left over money and I put it into a completely separate envelope to be deposited once I’ve hit a certain goal. Or if I’m saving for something in particular, I will only use that money to save for that item.. it is super great and really effective.