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Course: Personal finance > Unit 2
Lesson 1: Advice for individualsHow much of my pay should I spend?
Discover the secret to true wealth and happiness. It's not about fancy cars or big houses, but rather living modestly, saving money, and avoiding stress. Start thinking deeply about what really brings you joy and financial security.
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When would it be the best time to start saving for retirement?(12 votes)
As soon as you can!(14 votes)
I have question about budgeting/saving for when I might or might not get taxed in the future on income from some part time stuff I work on.
My real job usually the taxes all deduct out to about 20% of my gross pay (I see this on my check stubs) but lately instead of just volunteering crowd-source "interning" (= work for free for someone bcz you love what you do and because they can) I'm starting to be able to pick up nuts and berries, scraps, free lance-ish/contractor basis. Is this going to get taxed at the same rate as my employee income? That has social security AND income tax plus also just recently our company (ily <3 u rok!) started doing health insurance too so there are different biweekly deductions for that.
HOW DO I BUDGET for taxes?? What's too small to count (i.e., I get to keep the money for the castle I sold, no questions asked) and what's going to whack me on the side of the head next April 13th by surprise? Usually at the same time my beater needs oil change/brakes repair and my cat needs her rabies shot. Is there a rule of thumb?
(p.s. completely hypothetical castle, just an example. NO CASTLE)
Four different "hobby incomes" from four different organizations adds up to actual income that's going to need accounted for, even if I already spent it...(10 votes)
How do you plan for expenses that are not regular, like pet expenses? I use Capital One 360. I have an account for vacation and an account for car expenses, ect. And every month or I have money automatically pulled from my regular bank account into these accounts. I don't really miss it and it is there when I need it. (It also earns a bit of interest).
How do you plan for taxes, considering you have all this $ coming in from different smaller sources? Until you know more, I'd save 40% of it for taxes. It's not ideal, but it is better to have too much than not enough.(5 votes)
how much of your paycheck should you save(3 votes)
Hey gianna!
That totally depends on what your living conditions are like. Lets say your monthly income is, for example $3,500. Well food might be $250, housing might be around $800, insurance is around $500, $500 for things of comfort like netflix/activities/etc, and around $100 for utilities. That all costs $2,150 which leaves you with $1,350. Obviously you'll have more expenses and those numbers will be lower/higher depending on where you live, what car you drive, etc. But, Out of that hypothetical $1,350 you have left, I'd save all of it. Which means you'd be saving, for example, roughly 40% of your paycheck.
Hope this helps!(15 votes)
I thought this video would actually tell me how much to save...(5 votes)
The way I see it is that the answer depends wildly on your personal situation. Sal doesn't give a specific answer because it won't work for everyone. Instead, he's teaching us to assess our own situation and come to our own conclusion. "Give a man a fish" and all that.
As a side note, though, I wouldn't mind a few straight answers myself, but something tells me that will happen later in the course.(4 votes)
- Good way to go. However, it is also important to have a big plan at the early stage of life.(4 votes)
I thought this video would actually tell me how much to save.(4 votes)- how much of the money you make should you save percentage wise.(2 votes)
If you are a minor then save about 75% of your income per month. If you have bills and taxes and rent to pay, then save about 20% of all that you earn. If you are in a position where you can save more then go for that option. Otherwise, about 20% of your monthly income is good to save.(2 votes)
- When would it be the best time to start saving for retirement?(2 votes)
- Whenever you can(2 votes)
- how and i save more money(2 votes)
- How can i track my many savings goals?(2 votes)
Video transcript
- Think seriously about
the things that really make you happy. When you look at a lot
of adults in the world, you'll see some people, they
might be driving fancy cars and big houses. A lot of those people are
actually really struggling because they bought the
fancy cars or the big houses and they're stressed because of it and then you might see other
people who maybe they're driving more basic cars or living a little bit more modestly. A lot of those people are actually richer. They're saving a lot of money. They have their retirement. They're sleeping better at night because they're not as stressed, because they're not living
paycheck to paycheck. So think deeply about these things and this is the best time to start.