Investing

Since my employer doesn't withhold my taxes, I'm responsible for keeping track of them. I created a ING Direct bank account which automatically debits from my checking account (where my paycheck is automatically deposited every month) roughly what I have to pay for taxes. I try to lump the savings into various CDs that will all mature during tax season, so I'll be earning an extra 0.5%-1.0% over what I'd earn in my normal ING Direct savings account (which is also higher than what I get at my local bank).

I'm in a fairly similar situation to you with some other money I've been sacking away, though, and I'm not quite sure what to do with it.

Jam it back in, in the dark.

If you have money to invest, then obviously you aren't a poor sap currently.

Quote:

I'd prefer living a carefree life now and start putting some money aside later on, when I can afford it without affecting my lifestyle.

What happens if you start having financial difficulty later on and never quite manage to find time to put money aside? It's much easier to budget your finances when you're single than once you have a spouse, kids, and all of their arbitrary demands for money.

There's nowhere I can't reach.

Sass, I actually found out that Washington Mutual now offers an online-only savings account that has to be linked to your checking account with them (if you have one). They currently offer 3.3% interest no matter how little you have in the account, which is a little better than ING's current offering a 3.0%. Their CDs are also a percent or so higher, but they only offer them in 8+ month styles.

Also, if you're decent about saving, you can save up a few thousand without a terrible amount of trouble. I make around $24,000 a year and have been able to set aside a few hundred dollars every month into savings after all of my expenses. That includes small vacations like visiting my girlfriend for a week, flying home to stay with my parents occasionally, going on roadtrips and staying at Motel 8s instead of Holiday Inns and packing lunch while on vacation instead of eating out every meal.

I'm actually pretty annoyed my school doesn't do any sort of 401k plan or matching to retirement investments for their grad students, since I'd be happy to put away $200 a month and have that matched 50% or 100% by them. Instead I'm stuck just doing my ING thing.

Edit: Also, aren't there certain retirement programs which let you borrow against them in order to finance buying a house or other large life expenses? Not to mention if you wait until you're 35 to start saving for retirement, you're also going to have to be saving to pay off your mortgage, your kids' education, cars, and all of those other wonderful things that come with age.

Here's a question for some of you guys. What do you do first, concentrate on investing in long-term returns, or pay off student loans ASAP? After finishing undergrad, I had a loan that was around 6.5% and unsubsidized, so I took all the money I had saved working for the 9 months after graduating and prior to going to grad school, and paid off that loan right away, even avoiding the fees for taking out the loan. I still have a few others lingering around, but they're subsidized and I won't have to pay them until I finish grad school (another 4 or so years ago). After that, my loans should only be ~20-30% of my total income, so I'm thinking about scrimping the first year and trying to pay them off right away so I won't have to deal with any interest.

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