This weekend found me in one of the most economically poor regions of the US – the Mississippi Delta. As it happens, this is also one of the most culturally rich regions of the country – the crossroads of highways 49 and 61 is where “the blues was born.” Regular festivals, including this past weekends Juke Joint festival allow anyone to pack in more blues than some people can handle.
Since I am genuinely interested in investing, money management and retirement savings, I was perfectly willing to field questions from my friends about personal finance outside of Pete’s Grill on friday night with the blues emanating from the dumpy concrete block building behind me. We are young, we sometimes have jobs and we are frightened of the prospect of losing our money.
One thing we have going for us is being young. It does not take much to start saving – it just needs to be done. “Open an account!” is my first bit of advice. Put SOMETHING into it. I know my friends can be frugal – i spent three weeks on a bus that ran on vegetable oil with some of them, we spent a couple hundred dollars each for one of the most epic vacations of our lives.
So, you know you can save a bit of money here and there. You can budget. You have maxed out your employer’s retirement benefits. Where do you put your money?
Vanguard suggests saving at least 15% of your income. Really, try to push the envelope here, you can never save too much. Keeping it in different vehicles addresses different needs. Cash accounts are for emergencies. Taxable brokerage accounts are for big, planned expenses. Retirement accounts are for retirement. We all want to avoid the poverty we surrounded ourselves in this weekend, starting young and saving as much as possible should make this easily possible.