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Am I being stupid with my money?
Klorgnum
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Background: I'm 21, living in Canada with my parents and attending university in town. I make minimum wage ($9.50/hr) working 29 hours a week at a seasonal job (May - Nov, reduced hours in fall). My parents have made it clear in the past that they don't mind having me at home and there is no pressure to move out. I've been paying for school myself, without dipping into my loan money. I haven't had any problems with this since I'm not a very big spender.
I give money to charity when I can ($250 this year, unlikely to be any more). Given that I'm not currently making any effort to save for the future, and since I'm not impinging on my school money, is it ethical for me to do this, provided I can continue paying for school and don't have to rely on my parents (apart from them providing food/shelter)?
Thanks
I give money to charity when I can ($250 this year, unlikely to be any more). Given that I'm not currently making any effort to save for the future, and since I'm not impinging on my school money, is it ethical for me to do this, provided I can continue paying for school and don't have to rely on my parents (apart from them providing food/shelter)?
Thanks
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Being stupid with money generally implies you're living beyond your means, getting into debt, et cetera.
I'm a cheap asshole though, so I'd say you'd be better served putting your money in a savings account or something to help pay off the loan in the future, but that's just me. But I also think the economy is going to go way deeper into the toilet before we see a real recovery.
Start saving more money. Just put it aside like it's a bill and don't touch it. That will add up quickly.
(I will admit I don't even understand how there's an issue of ethics here)
I don't know what your taxes come out to, but $275.50 a week is a pretty low wage to be living on on your own.
I guess it could be argued that its never too early to save for your future, but really, 250 bucks a year at a part time, 9.5 bucks an hour job comes out to like, 2% of your income. If you're really worried about it, put an equal amount into a savings account every year.
By the financial standards of the average college student you're a fucking saint.
Can trade TF2 items or whatever else you're interested in. PM me.
It would be a good idea to start socking cash away and open a brokerage account when you hit $1000 in savings. If you pledge direct deposit like $50 a month, you don't hit any fees buying.
Even in this shitacular economy, you'd be surprised to see how quickly the cash compounds (or disappears).
Still, you're in pretty damn good shape. I wish I had your sense at 21 lol.
Oh, absolutely. I've no illusion that I'm making enough to be living on my own. I don't make enough per year to incur taxes, just enough to pay for school & a few things I want.
I'm making under $10 000* a year since my job is seasonal (reduced hours in the fall because of school, no work once it starts snowing), so my concern is mostly that I shouldn't be giving money away that I could be saving since I make so little.
*Canadian universities are partially government funded AFAIK, so tuition + textbooks for my program comes out to around 6k per year.
That is not an ethical decision, it's a personal one.
Do what you need to stay afloat and prepare for your future so you don't become a charity case.
I can understand your concern, but there's no reason you can't do both if you feel you should.
I would advise saving money while you're in a position of paying almost no living expenses, and I would commend you for giving to charity.
From a purely financial perspective, it isn't the best thing to do -- which doesn't make it stupid. You should be saving that $250 for when you do finish your degree, so you can move out without going into debt, or living poorly. After all, if you were to give $250 to charity each year, and then need to use the services yourself, it's a fine ethical decision but it also means that you were probably not putting those funds to the best use (in regards to your personal situation).
But people rarely are "rich" enough to donate to charity without making some sort of personal sacrifice, such as forgoing a personal purchase. That doesn't make it wrong -- it makes it the point of charity. People do it to feel better about themselves and to help a cause they believe in.
Suddenly when you're graduating you have a nice fat pile of cash for your effort, and then when you do line up your first full-time Real Job, you don't have to worry about security deposits for apartments, utilities, or getting yourself some cheap garage-sale chairs and a table to eat at.
Can trade TF2 items or whatever else you're interested in. PM me.
Sure thing. My coworker just set one up for his son. It's not a no fee brokerage account, they just don't charge when his high schooler has $50 a month directly transfered from his debit account to his investment account. Im pretty sure he has it go into the same index fund every month.
I'm pretty sure it's Fidelity that offers that service. They do charge for withdrawals and transfers though so again, it isn't a 'no fee' brokerage account. Hope that helps.
Make sure you deduct them from your taxes properly. I recommend turbo tax.
Never too early to get a 401k started. 2-6% of your earnings now will be worth hundreds of thousands of dollars when you hit retirement. I'm 29 with a 3 year old 401k and I'm seeing returns of like $1000 per month (granted I probably make and withhold more than you) but I would probably have $40-50k more is I had started at 23 rather than 26.
Live with your parents until they physically throw you out, then move in with your aunt. Family is meant to be imposed upon.
It's never to early to start your own business. My friend Danny does odd jobs for extra cash, carrys around a business card that says 'cleaner, organizer, gardener'. He know nothing about orgainizing or gardening but he gets a little extra cash for not doing very much.
Be smart where you shop. Make sure you have the membership card at your local supermarket. Even better if you have a local co-op you can volunteer at. As far as clothes and shoes go at your age you need like one or two nice outfits, the rest should come from thrift stores. Perform sex acts on strangers for money. A great way to make quick cash and meet new friends!
Avoid eating or drinking out. Learn to cook for youself. Basic stuff. You can make spaghetti or zita or something enough to last you a week for like 10 bucks. At your age if your aren't eating top ramen at least twice a day you are being stupid with your money. Sorry.
A savings account is always a good idea. I have mine set up to put $25 bucks a month into mine, and even making good money, you'd be suprised how many times I was glad to have it.
Don't carry cash or credit cards around. You can't spend money if you don't have it handy. Good luck!
For additional finacial help and learning, I HIGHLY recommend Co-op programs. It may take an extra year on to whatever degree you are doing but you are getting paid ($15-25/hour depending on who hires you) and when you are done with your degree, you have REAL experiance in your field. Unless you are already doing something like teaching/nursing that already requires a practicum.
If you are happy with your finacial state and your parents are comforatble with you at home, stick with it. Money is not the end goal of everything. Your happiness is. Though typically the more $$ the more toys and more experiances you can have.
I'd say you're in tip top shape, and like the suggestions everyone's given.
Because not taking government loans is pretty fantastically fucking stupid, yes. Especially when your savings are nil. What are the terms of the loans?
Go Roth IRA or something if you go that route. (i don't even know if you can contribute to a 401k without doing it through an employer) Since you aren't paying taxes, it wouldn't make sense to get a tax deferred retirement plan.
I agree with the cutting back on charity, not to sound cold, but that money will much better serve you as savings now. Once you have a legit income, then think about donating some of it.
thats what young people should do
do that
maybe cut charity down a bit, i mean, maybe to 50-100 bucks a year
Oh, I'm taking the (government -- OSAP) loans, I'm just not spending them. I've been careful to have enough money to pay them back at any time.
And I appreciate the advice of the last few guys who posted, but 401Ks and Roth IRAs don't exist in Canada :P
I'm sure Canada has CD's, that is about as secure as you can get. Slow ROI, but very stable. I had one for some years and I don't regret it.
WTF, seriously? Guess you'll have to keep all those Raccoon pelts under the bed then!
CD's are a good plan, try laddering them though if you have a big enough nest egg. That way you can take advantage of changing interest rates instead of gambling everything on one rate.
The first one. I'm going to start looking into savings accounts soon.
Also, look into Tax-Free Savings accounts either with ING or with your bank as well. You can put up to $5000 grand a year in them and any interest you earn is not tax'd by the feds, unlike regular savings accounts.
This is probably impossible to justify economically or morally, but doing something flagrantly dumb every so often is one of the more educational and therapeutic things you can do, and undergrad is one of the last time you won't be (severely) penalized for it.
that's why we call it the struggle, you're supposed to sweat