- December 9, 2023
- Posted by: legaleseblogger
- Category: Related News
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Original Content:
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Rewritten Content:
The Challenge of Understanding Legal Jargon and the Role of AI Legalese Decoder
When it comes to navigating the intricacies of the legal world, the use of complex and perplexing legal jargon can often leave individuals feeling bewildered and overwhelmed. In particular, those without a legal background may find themselves at a loss when attempting to comprehend their rights and obligations as stipulated by the law. Consequently, a lack of understanding may result in individuals inadvertently agreeing to terms and conditions that they do not fully comprehend, thereby exposing themselves to potential legal ramifications.
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****** just grabbed a
Live your life like you’re still making $14/hr. Build an emergency fund to cover six months of expenses, and keep it in a high yield checking account (4%+). If your employer offers a 401k match, contribute just enough to nab it – don’t bother with any of those other paycheck vampires rn. Focus on learning new skills and getting ahead at your job, time will pass and you’ll be amazed at how far you’ve come.
Check out The Money Guy on Youtube. They have real practical advice.
This is difficult to answer without knowing what the rest of your budget looks like, what area you live in and what your other monthly an expenses are.
At a very minimum, you need to start contributing to your company 401k to the match. Set yourself up to have a 1% automatic increase every year so you do not notice it, assuming you get merit increases.
Pay yourself first. Have a direct deposit setup to a separate HYSA savings account that is NOT connected to your checking account and makes transferring to and from to your checking inconvenient.
An HSA is a great medical plan option if you have limited medical expenses. What is your out-of-pocket max?
Create a budget if you havenÔÇÖt already to really find out where your money is going. Determine what you value, what you envision your life to look like in the future and start a savings plan from there. ItÔÇÖs hard to budget when you have no real goal in mind and donÔÇÖt have a why.
Edit: Set an appropriate amount of money away for yourself each pay period as fun money. Discipline is important but so is living life while youÔÇÖre here. ItÔÇÖs okay to indulge within reason in things that bring your happiness.
Short version:
If your company offers it, 401K can help reduce your tax burden. Idea is you build wealth more quickly. Taxes are due when you withdraw in retirement, presumably when your earning power is decreased. Performance of 401k is heavily dependent on who is managing.
FSA/HSA can also help reduce tax burden if you need medical care during the year. Some of it rolls over, some is lost so planning is necessary.
For savings, what worked for me was to add a second and third checking account that gets auto-deposits every paycheck. I don’t see the funds and this is how I built an emergency fund. From one of these accounts I fund a stock account which I use to periodically purchase stocks/funds. I do this because if I don’t see the money then I don’t spend it.
Finally, setup a budget. You HAVE to do this to ensure that you know where you’re spending your money.
Here you go!
Here’s an easy flowchart starting at 0 of what you should be doing with your next dollar.
https://i.imgur.com/u0ocDRI.png
Start here-https://www.reddit.com/r/personalfinance/wiki/commontopics
The best time to start was a long time ago, the second best time is now. You have time to catch up if you’re diligent.
Figure out what your monthly expenses are then save roughly 6-9 months worth towards an emergency fund. Put that money in a High Yield Savings Account, and donÔÇÖt touch it unless itÔÇÖs for Emergencies
If you work at a company that offers a 401k plan, figure out if your company offers a 401k match, and if so contribute at least that % from each paycheck.
Start putting whatever you can into a HSA and Roth IRA on a monthly basis. For the 2023 year for Roth IRA, you can contribute up to $6500 by like April 15, 2024 (tax day), do as much as you can before then.
DonÔÇÖt forget to invest that money in the Roth IRA into index funds like the total stock market index fund (VTI) and S&P 500 (VOO) but itÔÇÖs up to you to do your own research.
Strongly recommend watching the Money Guy YouTube videos for personal finance tips.
Most importantly, create your monthly budget stay strict to it!
Save more, spend less now and your future self will thank you. Good luck!
Start here: https://reddit.com/r/personalfinance/s/2rxot1J4vE
If I were you, my goals in order would be to:
1) Put enough in a roth 401k to get any employer match. A roth account has you pay taxes now, but all interest earned will never be taxed, so it’s a good choice for when you’re young.
2) Get at least 3 months of your expenses in a high yield savings account to be your emergency fund. After that, gradually work up to 6 months while also working on other goals.
4) Pay off the car unless its interest rate is lower than the high yield savings account.
5) If you choose a high deductible health plan, get enough in your HSA to cover your out of pocket max. That way, if you have a medical emergency, you will be covered. Note that you shouldn’t do this if you choose the FSA plan, because FSA money expires annually. HSA money stays with you for life and can continue to be spent on medical expenses. Or, after 65, it’s just regular money.
6) Max out a roth IRA every year by putting $6500 in it.
7) Start monthly putting aside money toward expected future expenses, like Christmas presents, a new car fund, or for a down payment on a house. For instance, I just bought a car that should last me 5 years. I’m still putting a couple hundred a month into a high interest savings account every month, so when I need to replace it, I will have enough to buy a car for cash.
8) Work up the percentage you put in your roth 401k. There are various calculators online to help you decide what is a good amount. Note that investing in your 20s is much more powerful than later, because it gives that much more time for interest to grow, so extra investing now could allow you to live more lavishly later during your career.
I make about that before taxes too. You should really relabel it at 43k a year job. After taxes and 401k (I do 9%, get matched like 6%) thatÔÇÖs about what you have to live on. 70 is a fake number.
I suppose the first and, arguably, most important thing for one to decide is how they view money, i.e. what its for and what you want to do with the money you have.
Are you a spender or investor?
While you decide on that, I’d consider making a few commitments to myself.
#1: Pay yourself first. It is considered wise to have at least 3 (and preferably 6) months of living expenses, including your entertainment and funds for miscellaneous spending saved up. If you lose your job, you can maintain your lifestyle while you seek new employment.
If you only have a car, perhaps $5k saved for emergency expenses is adequate. $10k feels more comfortable though.
Use your company’s 401k and commit to contributing at least the same percentage of your income your company will match. 401k deductions are not taxable in the year you make them, so if you max yours out you’ll cut about $20k or so out of your taxable income. It will hurt at first, but it will keep more of the $ you earned working for you.
Two provide for financial stability. One should provide income for when you can’t or don’t want to work anymore. Make saving and investing your priority and you will establish a lifestyle you can live within on the rest.
$70k – $18k in 401k leaves $52k. You’ll lose another $7-$9k in social security and whatnot. If you can live on $3k per month net to you, which you should be able to moving up from a $14 per hour job, you can save aggressively and still enjoy a better living standard.
Roth IRAs will provide you tax-free income in retirement, but you invest money now after its been taxed.
To be frank, with nothing saved so far, you are behind. I hope you will save aggressively and invest wisely according to your goals and tolerance for risk in the market.
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Deposit your paycheck into your savings account and give yourself a weekly allowance by transferring money from your savings to your checking account.
Your payroll dept may have the capacity to direct your paycheck into multiple bank accounts. That’s pretty much the same thing.
The first step is to understand where your money is going each month. That way, you can see how much money you can/want to save/invest or adjust your spending to save/invest more.
There is a lot to learn, and it can be overwhelming so it might be worth talking to a professional like an [AFC](https://findanafc.org/).
Your first priorityÔÇÖs should be control your spending and to build up an emergency fund and contribute to your 401k up to full the company match . Leave all other retirement savings until after you have 6 months of expenses in a savings account.
1. Create a budget- make a list of all your monthly expenses . Track every cent look at every statement , every account, every card . download a budgeting app if needed you have to find a way to pay less for everything added together than your total take home pay every month. It can take a while to get a budget going,
organize your spending into categories- this bill, that bill, food , gas etc this helps you know exactly what goes where your dollar goes and know what is necessary vs unnecessary and what you can choose to do to cut down expenses.
ItÔÇÖs easier to control and track your spending with fewer bank accounts and cards start automatically drafting/auto-paying (but still track it for the amount and due dates if the payment doesnÔÇÖt process for some reason) what you can including automatic savings transfers.
Look into seeing if someone can gift or buy you financial books for beginners. There are some audiobooks out there including free ones on YouTube.
assuming we are starting from zero…
* put into your 401k to maximize the company match
* max a HSA account
* build up 3-6 months emergency fund into a HYSA
* maximize a ROTH contribution
* any excess after this should go to the ROTH 401k
* if all that is done and you still have excess money, open a taxable investment account
6-12 months emergency cash in an online savings account with a good interest rate
Max your 401k at work
Open an IRA and max the annual contribution. Do a Roth if you can. Call fidelity or Schwab and theyÔÇÖll be glad to walk you through it
Live on a budget. Spend enough to be happy and save the rest. DonÔÇÖt develop any expensive or stupid habits.
If you have enough money left over to save some every month, open a brokerage account at fidelity or Schwab and invest in low cost broad index funds.
I also donÔÇÖt have a big savings and am I mid-thirties. Start somewhere, be frugal (financially smart), try to buy what you can afford – donÔÇÖt mortgage your future. But also, take care of yourself, you only live once.
Start small steps like others have proposed.
Build a rainy day fund. (=about 2/3 months income, start with 1,000)
Create a nest egg to cover six-months expenses if you lose your job or something bad happens
Build an independent retirement fund. Vanguard or through your bank (if they offer). You can do CDs (paying good rate at the moment) or invest in safe (relatively) index funds.
Regardless, good luck and congratulations on the salary!
Step one look at your employment benefits see what is on offer. If your employer offers a 401k you will want to get setup with that…doubly so if they offer a match.
If your employer offers a 401k with a match you want to max out that match at the very least so you get that money. After that, making $70k a year, you may want to prioritize maxing out a Roth IRA. If you max that out and have more to save then I’d put more into your 401k past your employer match amount.
As for FSA’s I wouldnt bother with those until you have maxed your retirement accounts and you are unlikely to do that on $70k a year.
An HSA is arguably better than an unmatched 401k but for simplicity sake as you are just getting started I’d start with the 401k and the Roth IRA.
YouÔÇÖve gotten a lot of great advice on how to save. But you need to decide what youÔÇÖre saving for. You need a goal. HereÔÇÖs an example:
Goal: financial independence
Means: I need to save 25x my intended annual income. If I want investments to generate $100k a year in retirement I need to save $2.5m.
This number may seem huge because it is. But if you donÔÇÖt have a goal youÔÇÖll save some money and spend it and repeat. Someday you will get old and tired and wished you had focused on what you were saving for. Good luck internet friend!
Read the Bogleheads Guide to Investing and listen to Dave Ramsay from time to time. The Bogleheads tell you that for most people investing in a 3 fund portfolio in a dedicated manner over the next 30+ years will leave you well ahead of your peers. Dave will drone on about a lot of things that probably donÔÇÖt apply to you (heÔÇÖs mainly aiming his message at credit alcoholics) but heÔÇÖll have you with:
– an emergency fund in cash with (eventually 6ish months) of monthly expenses in it
– investing 15% of your income in tax deferred retirement vehicles, Roth, IRA etc
– paying attention to living as debt free as possible
Congrats! That’s a big step up in life. At your 20’s, people start their financial journey at different times, so don’t worry if
* Step 1: set up a save enough to have a small emergency fund. 1 month living expense to start, so you’re not living paycheck to paycheck.
* Step 2: Start a quick budget, include your expenses (rent/food), retirement, student loan payments, car payments, etc. It’s okay if it’s not 100% accurate, you refine as you go along
* Step 3: Look for your longterm goals. If it’s to save for a house, budget in a certain amount of money each month, and track how long it would take to realistically hit your goal. This will change over time.
Look up the following: I recommend Investopedia of a good source for general knowledge
* 401K (know the tax benefit, learn the contribution limits, traditional vs roth)
* IRA (know the tax benefit, learn the contribution limits, traditional vs roth)
* HSA (If you company offers this, look up the tax benefits, and if your health plan qualifies)
* Index funds
* Target data funds
Important information:
*Does your employer doe 401K matching? If so, contribute to match that amount
The Money GuyÔÇÖs. [Financial Order of Operations](https://moneyguy.com/faq/what-is-the-financial-order-of-operations-foo/#:~:text=FOO%20is%20a%20nine%20step,may%20affect%20your%20future%20finances)
Step 1: Make a budget. Account for rent, groceries, every thing you think you will spend on. Look at YNAB.com. This is the most important step, everything else stems from here.
Step 2: Start an emergency fund. I would start with $1000 and then build up to 3 months of expenses. I would start a high yield savings account(HYSA) to keep this money
Step 3: ask your company when you can start contributing to their 401k plan. They usually do a company match. For each dollar you contribute, they will contribute a certain percentage to a limit. Make sure you match that contribution and do not touch that money for anything ever.
Step 4: start learning about finances. There are podcasts that can help you. Eg. My rich BFF does short videos on tiktok. Find one that suits your style. Nerdwallet has a lot of articles and calculators to help.
Step 5: make goals for yourself and you’ll hit them. Whether a house or a certain net worth number. As long as you have a plan you can make it happen.
Lastly, don’t tell anyone what you’re making. Don’t spend extravagantly on others and be selfish. Put some money aside for fun things like travel.
You’ll do great! Good luck.
Set aside 6 months of expenses for emergencies. Keep in an interest bearing account or CD where it is always safe and always available.
Pay off any high interest debt, excluding mortgage. Anything with interest over 4-5% should be paid off (represents instant return on your money)
There are 3 types of accounts regarding taxes, tax free (Roth IRA, Roth 401k, HSA), tax deferred (IRA, 401k), and taxable (brokerage account). If you have kids there is also Education IRA or 529 plan.
Contribute the amount needed for maximum employer matching for you 401k/Roth 401k. Then max out Roth IRA (if married, max out both yours and your spouse accounts) and then HSA and Roth 401k. Then max out any tax deferred accounts (IRA and 401k). Contribute remaining funds in taxable accounts.
Congrats! I recommend looking into betterment because you can create an emergency fund in a HYSA with about 5% interest to save up 3-6 months, and also a general investing fund. You can also save other buckets but you can start there.
Then set it to automatically deposit a certain amount into those buckets every 2 weeks when you get paid. Set it and forget it. You can also readjust (ie maybe you start auto depositing 200 each time, you could always increase or decrease).
IÔÇÖve found for people who feel very overwhelmed with finances, sites like betterment or Wealthfront are dealt valuable. I personally like the layout of betterment and IÔÇÖm more familiar with it, but watch some YouTube videos and read reviews etc.
YouÔÇÖve got this!
1) pay off toxic debt
2) create emergency savings of 3-6 months income
3) do 401k matching up to $1 for $1 that company matches
4) put the rest into Roth IRA
5) invest the rest into traditional ira
6) aim for index investing (just buy S&p etfs, leave them and do not touch them.. ever)
50% of you income should go to NEEDS
30% goes to WANTS
20% to SAVINGS
Take out your savings at the beginning of the month and live on the rest of the money, not the other way around.
MAKE A BUDGET! Start there. Live frugally. Live as frugally as possible.
If you get a raise or a bonus, add 20% of that to your living expenses, store away the other 80% into investments/savings.
These are the initial rules to live by
Always bank at an FDIC insured institution with an established bank. Put your illiquid savings into a High Yield Savings account and the rest into your checking account.
Charge everything to a rewards credit card every month and pay off in FULL each month. This builds you CREDIT. – financial coach and Wharton mba
go to the library and get some books on the subject
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then BUY some used versions of same subject to keep in your permanent library
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keep you savings amount secret from friends and others who might want to steal, sue or use you
There’s a lot of good comments here but I’ll add something I haven’t seen.
I could be mistaken but unused FSA money is lost at the end of every year where an HSA can compound. I only learned that because one of my coworkers said he put in a not insignificant amount every year but the balance never grew. Personally I wouldn’t do FSA especially when your younger, HSA can be nice but I wouldn’t start there in your personal finance journey.
While there are some helpful first steps I think one of the biggest is to not fall victim to lifestyle inflation. After that, fund an emergency fund (6-9 months of expenses), 401k match, Roth IRA, HYSA, etc. There is a pretty helpful chart on Reddit that shows a flowchart of personal finance and where to allocate your money.
1. Contribute enough to get 100% of the 401k match, and use a Roth 401k if itÔÇÖs an option.
2. Max an HSA if you can and invest it.
3. Max a Roth IRA.
Do those 3 things and youÔÇÖll be better off than most.