We have several articles on your question.

Contribute only up to you companies 401k match. So if your company matches 5%, you contributed 5%, ect. That's free money! If you company is publicly traded and offers it's own stock in the 401K, do not contributed more then 5% into your companies stock. If your company does not offer a company match you would be better off investing in a Roth IRA since your money is tax before it is contributed, when you make withdrawals in retirement you will not be tax again. A IRA will also allow for a lot more flexibility in which you can invest in to create better diversity and returns at a lower cost. After you have contributed up to your companies match in your 401k, then move on to maxing out you Roth IRA, which is $5,500 this year. Also be sure to save a good emergency fund if you do not already. I always recommend, 8-12 months of your take home pay to be saved in a high interest savings account such as ING. This will allow you to be protected in case of injury, car breaks down, job loss, ect. Hope that helps.

Good Luck

Saving money means not spending it. So you can do the following:

1. Set a budget. Figure out where your cash is going. If you are spending $2,000 a year buying coffee every morning then you can cut back on that.

2. Reduce monthly payments. Negotiate a lower rent. Shop for cheaper insurance. Cancel that gym membership.

3. Make savings a commitment. Put 20% of your salary away in savings automatically (like into a 401K, etc).

4. Create buffers. Having 6 months worth of emergency savings in a separate account. Create a "next big toy" account that is used for saving for big ticket purchases like a TV or vacation. Don't splurge until your account has reached a certain point (like $1000).

The Truth About Money:

Money is plentiful for those who understand the 7 simple rules of its acquisition.

#1) Start saving.

#2) Control your expenditures.

#3) Guard your money from loss.

#4) Safely earn money on your money.

#5) Make your home a profitable investment.

#6) Insure a future income.

#7) Increase your ability to earn more money.


The Five Laws of Money.

#1) Money comes in increasing quantity to any person who will set aside not less than 10% of their earnings to create an estate for their future and that of their family.

#2) Money grows diligently and contently for the wise owner who finds for it profitable, safe and reliable investments.

#3) Money stays with the cautious owner who invests it under the advice of those wise in its handling.

#4) Money slips away from the person who invests it in businesses or purposes with which he is not familar or which are not appoved by those skilled in its keep.

#5) Money flees from the person who would force it to impossible earnings or who follows the alluring advice of tricksters and schemers or who trusts it to their own inexperience and romantic desires for investments.

__________________
Gary Spicuzza, *SAFE
Copyright 1956.
No Rights Reserved.
*Self Appointed Financial Expert

Perfectly said

Mark

I'm reading through some of the oldies. So what does this mean?

#5) Make your home a profitable investment.

I figure most a home's gain or loss in value is due to market fluctuations (valid or not) that are outside of the control of a homeowner.

I'm guessing this means buy a home you can afford, pay it off as fast as possible, and maintain the home so that its value is maintained. And to the extent possible, influence your neighbors and community to maintain the value of their property.

Or maybe I disagree? I'm certainly not trying to start a debate here, but I've known a couple of people who treat their "home" as an "investment" and everything becomes a business decision. Should I replace the fence? No because I'm moving eventually and will replace it then. Should I repair the air conditioner or get new flooring? It depends on the ROI. Can little Timmy hang the picture of his soccer team on his bedroom wall? No, we don't want to damage the resale value of the wall. Ok, that was a bit extreme, but you get my drift.

I think you should make your house a "home" even if doing so might not turn a profit. ... Now if you want to buy other houses and do whatever is necessary for them to turn a profit, well, that's a different story.

With all that said, I'm hoping it means buy a home you can afford, pay it off as fast as possible, and maintain the home so that its value is maintained.

This might sound silly...but some of the little things really add up and can help you add to your disposable income or entertainment budget. My fiance and I try to carpool as often as possible. And...I have started packing lunches most days. These to minor things have freed up some substantial $$ over time.

Great idea! Those gas costs can really add up

Without knowing you income and your long term cash flow objectives it isnt an easy answer to give. I work for a financial planning software company that makes execplan financial planning software for professionals. It is easy enough for non professionals and if you want to do a quick look on which is best, you dont have to buy the software, you can run your own profile by downloading the trial version. It will work unrestricted for 30 days so you will have prenty of time to see what makes sense and you will not have to buy it.