What is your Savings Program? - Page 2

bongo2 · 10-17-2007, 04:51 PM

I do both. I have a number of automated investments such as 401k and a taxable account, and I also make lump sum investments periodically.

RetireeRobert · 10-17-2007, 04:57 PM

Quote:

Originally Posted by ChemEng

I was listening to Howard Stern yesterday, and he was talking about his 'savings program' when he was younger. The program was simple: With every paycheck, he would purchase a Bond. Its a lesson he said he learned from his father early in life. I didnt get those lessons from my parents and am playing catchup much later.

At any rate, I realized that I dont really have a formalized program like that. My TSP and Roth are automated with every paycheck, but I dont have a program for aftertax investments. Right now its just paying down on debt.

So Im curious what program people use? Is it set up automatically or do you have to manually do the transfer? Any recommendations or advice on areas to look into or avoid?

You already have automated TSP and Roth IRA plus you pay down mortgage. That sounds good assuming you are maxed out on TSP and Roth.

If you still have excess to save you could consider savings to Vanguard Tax-exempt Muni Money Market and/or Vanguard tax-exempt intermediate term muni funds. I think you can arrange auto deposit into them from your checking account.

calmloki · 10-17-2007, 07:10 PM

Used to was a fair bit of cash went through my hands - it was cheaper to pay in cash than to have a checking account (remember when checking accounts cost money?). Back then, and now, i would make a point of converting to $100 bills - had a serious problem breaking a hundred for some piddling thing. Paperclipped the hundreds and had an even harder time breaking a $1000 stack. Now and again would take stacks of hundreds in and pay down the principal on various property loans. Figured that saving the interest on the property loans was about the best guaranteed investment i could make.

**Want2retire** · 10-17-2007, 07:30 PM

Quote:

Originally Posted by ChemEng

Follow on question: Do you invest the yearly max into your Roth as soon as its allowed? Or the yearly max divided by the number of paychecks?

Im currently doing the latter, but have considered the former. I decided against it ultimately, but would like to know your thoughts if you choose differently.

Well, it would be smarter to put it in gradually (DCA), but I don't. I put the whole $5000 ($4000 plus $1000 over-50 catchup) in all at once. The reason I do that is that most Vanguard funds require at least $3000 minimum to start, and I like being able to buy a different fund every year.

My Roth is only 11 months old, so I just have $11,300 in it so far (in Vanguard Windsor VWNDX and Vanguard European Index VEURX). I can put another $5500 or so in it in January, so maybe I'll get a small cap index fund or total stock market index fund or something. Since it is so small, my Roth is like my sandbox for playing with investing, and I have fun with it.

maddythebeagle · 10-17-2007, 08:01 PM

I auto. do the max in 401k type plan....already invested my roth contribution for the year and periodically add to my taxable investments when I see value...I think that I have already hit my taxable investment goal for the year, though...

brewer12345 · 10-17-2007, 09:03 PM

Every time I run over a squirrel, I hang it up to dry in the shed and then salt it. I figure that some day I will have enough salted away to feed the family without working for the county.

Goonie · 10-17-2007, 09:39 PM

Quote:

Originally Posted by ChemEng

Follow on question: Do you invest the yearly max into your Roth as soon as its allowed? Or the yearly max divided by the number of paychecks?

I've maxed my Roth every year mostly by DCA'ing monthly, plus throwing in small lumps here and there whenever spare change was available. I just dumped in another $2800 yesterday, and will top off the full $5k with a few more DCA deposits.

I'm sad because this is the last year for funding my Roth.....because of ER.

I'm glad because this is the last year for funding my Roth....because of ER.

SecondCor521 · 10-17-2007, 10:11 PM

I have 20% of my paycheck diverted to my 401(k), and the balance is deposited into my checking account.

As cash accumulates in my checking account above and beyond expenses, it gets moved to high-yield savings (currently IndyMac Bank and AmTrust Direct) -- basically my emergency fund.

As soon as possible each year I fund to the max in the following order:

1. Roth IRA
2. 529 plan
3. ESA for oldest child
4. ESA for middle child
5. ESA for youngest child.

I do lump sums just because it's easier and has historically beat monthly DCA by a smidge.

2Cor521

FIREdreamer · 10-18-2007, 12:51 AM

My wife contributes 13% of each paycheck to her 401K automatically. I contribute automatically $333 to my IRA every month. My wife and I get paid every two weeks.
In addition, $1450 is transferred once a month automatically to the money market fund in our taxable account at VG. The day following the transfer, and using a spreadsheet I created in Excel to determine the proper amounts, I manually exchange the new contribution from the money market fund to a variety of mutual funds. The funds that have performed most poorly in the past month receive more money, those that have performed best receive less so that I can bring my asset allocation back to where I want it to be.
Money left in the bank at the end of the month is used to top off the EF if needed or else it is added to the taxable account.
That's what our savings program looks like.

ChrisC · 10-18-2007, 09:13 AM

During college planning phase for children:

Automated: US Savings Bonds & 529 Plan; Utility Company Drip; CSRS; 401k; TSP; SEP-IRA.

After college planning phase:

Automated: CSRS; TSP; 401k; SEP-IRA; Money Market Fund.

MooreBonds · 10-19-2007, 09:21 AM

Quote:

Originally Posted by Achiever51

Gawd, I cannot believe I have ANYTHING in common with Howard Stern, but it appears I do: beginning at the age of 16 in my very first job, I bought a US Savings Bond every month for the next 39 years until I retired last December. In the beginning it was a $50 bond but as I made more $$, I bought larger denominations. Haven't redeemed any of the nearly 500 bonds I've accumulated, some are drawing 6%, and while I probably could have made more over time in another investment, for me it was a painless way to save.

WARNING*****WASTE ALERT****

Achiever51 - while that is an amazingly laudable act, please be aware that some of your bonds ARE NO LONGER EARNING INTEREST! Your moolah is sitting in the bond, and not only is it not growing, YOU ARE LOOSING MONEY DUE TO INFLATION!

That, and some of your bonds are earning only 3%-4% interest.
Check out their current yields here:
Individual - Savings Bond Earnings Reports
You'd be better off using your current marginal tax bracket to cash some in that aren't earning interest anymore and throwing them into a MM account or CD.

Achiever51 · 10-19-2007, 09:05 PM

Quote:

Originally Posted by MooreBonds

WARNING*****WASTE ALERT****

Achiever51 - while that is an amazingly laudable act, please be aware that some of your bonds ARE NO LONGER EARNING INTEREST! Your moolah is sitting in the bond, and not only is it not growing, YOU ARE LOOSING MONEY DUE TO INFLATION!

That, and some of your bonds are earning only 3%-4% interest.
Check out their current yields here:
Individual - Savings Bond Earnings Reports
You'd be better off using your current marginal tax bracket to cash some in that aren't earning interest anymore and throwing them into a MM account or CD.

Thanks for the alert. I do have all the bonds still earning interest in my portfolio, but I should have said that as opportunities presented themselves, I have "traded" in the ones approaching maturity/or those earning lower interest rates for other higher interest paying investments.

citrine · 10-20-2007, 11:27 PM

Automated: 25% into my 401K; $200 into savings.
Also contribute $4K into my Roth IRA.
Excess money is put into my mutual funds during the year.

thefed · 10-20-2007, 11:36 PM

200 extra monthly to mortgage AUTO
80 weekly to 5.4% amtrust savings AUTO
40 weekly to ING "gonna buy me a nice truck one day fund" AUTO
165 bi-weekly ROTH IRA AUTO
70 weekly SIMPLE IRA Trying to make AUTO,

all the $$ goes into checking. i keep a steady balance of $3k...give or take $1k. If I get up to 5k or so, I skim some off the top and send it to mm earning 5.5%

i DONT balance my checkbook the 'normal' way. i do it in my head, and review it regularly online. as long as I have $3k in there, i wont bounce any checks (i actually havent written a paper check in some time!) or auto-pymts for a month or so

Savant · 10-24-2007, 10:54 PM

I set up three bank accounts. One for payroll to come in. One for expenses to go out. One for investments. On pay day, I transfer an amount of money to the expense account, and a (much larger) amount to the investment account.

The money in the expense account is barely enough to meet my expenses.

Bigritchie · 10-24-2007, 11:16 PM

My program:

#1 THOU SHALT NOT be a idiot consumer.

#2 THOU SHALT NOT have a spouse or children who are idiot consumers.

#3 THOU SHALT Save/Invest every Penny that thou dost not spend on bills

martyb · 10-25-2007, 12:09 AM

Automatically every two weeks into my TSP account up to the max. Since I'll be 50 in January, my max will go from $!5,500 to $20,500 and somewhere, somehow I'll find the $$ to put in there. Actually, I think I read that the maxes for 401 type accounts were increasing another $500 for 2008, so I guess that'll be $21K.

**Want2retire** · 10-25-2007, 06:07 AM

Quote:

Originally Posted by martyb

Automatically every two weeks into my TSP account up to the max. Since I'll be 50 in January, my max will go from $!5,500 to $20,500 and somewhere, somehow I'll find the $$ to put in there. Actually, I think I read that the maxes for 401 type accounts were increasing another $500 for 2008, so I guess that'll be $21K.

Here's what I read about that on the TSP website this morning:

"The elective deferral limit for 2008 is $15,500. The limit for 2007 was also $15,500. "

"The limit on catch-up contributions for 2008 is $5,000. It remains the same as the 2007 limit. "

TSP: Current Info, Data; 2007-10-24

I am surprised and not too happy about that, but it is what it is.

**ziggy29** · 10-25-2007, 07:58 AM

Quote:

Originally Posted by Want2retire

I am surprised and not too happy about that, but it is what it is.

Well, sure. As we all know, inflation is well under control...

jIMOh · 10-26-2007, 11:28 AM

Quote:

Originally Posted by ChemEng

I was listening to Howard Stern yesterday, and he was talking about his 'savings program' when he was younger. The program was simple: With every paycheck, he would purchase a Bond. Its a lesson he said he learned from his father early in life. I didnt get those lessons from my parents and am playing catchup much later.

At any rate, I realized that I dont really have a formalized program like that. My TSP and Roth are automated with every paycheck, but I dont have a program for aftertax investments. Right now its just paying down on debt.

So Im curious what program people use? Is it set up automatically or do you have to manually do the transfer? Any recommendations or advice on areas to look into or avoid?

401k every paycheck for me (currently 11%, increa

10-17-2007, 09:03 PM	#26
brewer12345 Give me a museum and I'll fill it. (Picasso) Give me a forum ... Join Date: Mar 2003 Posts: 9,368	Every time I run over a squirrel, I hang it up to dry in the shed and then salt it. I figure that some day I will have enough salted away to feed the family without working for the county. __________________ “When you realize that you are one of the rare few who observe moral principles in their relationships with others, there is a temptation to sink into amorality, not out of conviction or pleasure but simply to avoid further pain, because there is no greater suffering than being an angel in hell, whereas a devil feels at home wherever he goes.” – Martin Page, How I Became Stupid

10-17-2007, 10:11 PM	#28
SecondCor521 Thinks s/he gets paid by the post Join Date: Jun 2006 Location: Boise Posts: 1,344	I have 20% of my paycheck diverted to my 401(k), and the balance is deposited into my checking account. As cash accumulates in my checking account above and beyond expenses, it gets moved to high-yield savings (currently IndyMac Bank and AmTrust Direct) -- basically my emergency fund. As soon as possible each year I fund to the max in the following order: 1. Roth IRA 2. 529 plan 3. ESA for oldest child 4. ESA for middle child 5. ESA for youngest child. I do lump sums just because it's easier and has historically beat monthly DCA by a smidge. 2Cor521 __________________ "At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.

10-18-2007, 12:51 AM	#29
FIREdreamer Thinks s/he gets paid by the post Join Date: May 2007 Posts: 1,493	My wife contributes 13% of each paycheck to her 401K automatically. I contribute automatically $333 to my IRA every month. My wife and I get paid every two weeks. In addition, $1450 is transferred once a month automatically to the money market fund in our taxable account at VG. The day following the transfer, and using a spreadsheet I created in Excel to determine the proper amounts, I manually exchange the new contribution from the money market fund to a variety of mutual funds. The funds that have performed most poorly in the past month receive more money, those that have performed best receive less so that I can bring my asset allocation back to where I want it to be. Money left in the bank at the end of the month is used to top off the EF if needed or else it is added to the taxable account. That's what our savings program looks like. __________________ "Fortune favors the brave" - Virgil Last edited by FIREdreamer; 10-18-2007 at 01:17 AM..

10-24-2007, 11:16 PM	#36
Bigritchie Recycles dryer sheets Join Date: Jun 2007 Posts: 371	My program: #1 THOU SHALT NOT be a idiot consumer. #2 THOU SHALT NOT have a spouse or children who are idiot consumers. #3 THOU SHALT Save/Invest every Penny that thou dost not spend on bills __________________ No Soup for you! Come back 1 year!

10-17-2007, 04:51 PM	#21
bongo2 Recycles dryer sheets Join Date: Aug 2003 Posts: 448	I do both. I have a number of automated investments such as 401k and a taxable account, and I also make lump sum investments periodically.

10-17-2007, 07:10 PM	#23
calmloki Thinks s/he gets paid by the post Join Date: Jan 2007 Location: Independence Posts: 1,526	Used to was a fair bit of cash went through my hands - it was cheaper to pay in cash than to have a checking account (remember when checking accounts cost money?). Back then, and now, i would make a point of converting to $100 bills - had a serious problem breaking a hundred for some piddling thing. Paperclipped the hundreds and had an even harder time breaking a $1000 stack. Now and again would take stacks of hundreds in and pay down the principal on various property loans. Figured that saving the interest on the property loans was about the best guaranteed investment i could make.

10-17-2007, 08:01 PM	#25
maddythebeagle Thinks s/he gets paid by the post Join Date: Jun 2005 Posts: 2,445	I auto. do the max in 401k type plan....already invested my roth contribution for the year and periodically add to my taxable investments when I see value...I think that I have already hit my taxable investment goal for the year, though...

10-18-2007, 09:13 AM	#30
ChrisC Recycles dryer sheets Join Date: Oct 2006 Posts: 492	During college planning phase for children: Automated: US Savings Bonds & 529 Plan; Utility Company Drip; CSRS; 401k; TSP; SEP-IRA. After college planning phase: Automated: CSRS; TSP; 401k; SEP-IRA; Money Market Fund.

10-20-2007, 11:27 PM	#33
citrine Recycles dryer sheets Join Date: Mar 2007 Posts: 479	Automated: 25% into my 401K; $200 into savings. Also contribute $4K into my Roth IRA. Excess money is put into my mutual funds during the year.

10-20-2007, 11:36 PM	#34
thefed Thinks s/he gets paid by the post Join Date: Oct 2005 Posts: 1,473	200 extra monthly to mortgage AUTO 80 weekly to 5.4% amtrust savings AUTO 40 weekly to ING "gonna buy me a nice truck one day fund" AUTO 165 bi-weekly ROTH IRA AUTO 70 weekly SIMPLE IRA Trying to make AUTO, all the $$ goes into checking. i keep a steady balance of $3k...give or take $1k. If I get up to 5k or so, I skim some off the top and send it to mm earning 5.5% i DONT balance my checkbook the 'normal' way. i do it in my head, and review it regularly online. as long as I have $3k in there, i wont bounce any checks (i actually havent written a paper check in some time!) or auto-pymts for a month or so

10-24-2007, 10:54 PM	#35
Savant Confused about dryer sheets Join Date: Oct 2007 Posts: 9	I set up three bank accounts. One for payroll to come in. One for expenses to go out. One for investments. On pay day, I transfer an amount of money to the expense account, and a (much larger) amount to the investment account. The money in the expense account is barely enough to meet my expenses.

10-25-2007, 12:09 AM	#37
martyb Full time employment: Posting here. Join Date: Nov 2006 Location: Janesville, WI Posts: 512	Automatically every two weeks into my TSP account up to the max. Since I'll be 50 in January, my max will go from $!5,500 to $20,500 and somewhere, somehow I'll find the $$ to put in there. Actually, I think I read that the maxes for 401 type accounts were increasing another $500 for 2008, so I guess that'll be $21K.