Hi Reddit,
(F23) Fulltime college student with my tuition paid by grants, no debt. I have a fulltime job. I pay all my own bills, not relying on a roommate or family.
I've been squirreling away money and was able to 40K today. I feel geniuinely happy to be where I am.
I don't have anyone to share my accomplishment with, but yknow that's okay. Nearly halfway to my goal, I wanna reach 100K by graduation. I have 3 years left.
Hello Reddit. A very common financial goal is saving $1,000 for emergencies. A large percentage (43%) of Americans said they would not have enough to cover a $1,000 emergency. I want to explore possibilities with the community about how to put together an emergency savings fund since many people struggle to put money aside.
Most people would benefit psychologically from knowing that they have the money available to them instantaneously. But there’s lots of obstacles. Child costs, medical debt, groceries, all the necessities, mortgage payments, it’s all important! With all these costs, people are likely to jump to the conclusion that they cannot save aside the funds. Therefore many don’t explore the possibility. The importance of budgeting (boring as it may be) is understanding where your money is going in practice. Even someone who wins the lottery and becomes a millionaire can quickly blow through it without proper planning and intentionality. But I truly believe that most people could set aside $20 a week for a year.
I had a lot of struggles trying to get my emergency fund started because I would always be put into a position where I had to use it. I struggled two years in a row, before finally being able to reach that goal. My success came when I chose to use my tax withholding through work as a tool to save on my behalf over the course of a year. I raised my withholding 3%. I only make $18/hr but I didn’t feel the loss of that money as much as I thought I would. The nice thing about withholding is I couldn’t touch the money, it was out of sight. Plus it’s not as easy to change your withholding as it is to take money directly out of your bank.
Then in February I did my taxes and put that $1,500 into a Fidelity account. Putting it into a Fidelity account is another degree of separation from my bank, making me less likely to touch it. Another positive about their application is that when you put money into it (without investing), it’s still growing 4% annually. This is comparable to a high yield savings account, but there isn’t a minimum amount of money required to get the benefit. That 4% is going to help cancel out the effects of inflation so the money isn’t devalued. That’s without being wrapped in stocks you’d have to manage and/or sell. The percentage is higher than what a traditional bank tends to offer (around 1% or less). If you have a $1,000 emergency fund, feel free to leave a comment about how you put that together.
PS: I hope this post doesn't come off as tone deaf. I am a financial planning student, and genuinely enjoy talking about this stuff, + want to help people if possible. Feel free to DM me even!