A
male
age
36-40,
anonymous
writes:Hello All,This is not a question on love/sex etc but I am posting here anyway because I have been getting really good answers from the Dear Cupid community. This is a question on personal finance.I am a 25 year old guy who just graduated with a Masters degree in Engineering about a year ago. Job search was extremely rough for me and it took me about 8 months to land the job that I am currently in. It is an entry level software programming job that does not pay much. Basically I am starting out from the bottom and I don't make as much as I thought I would, after a Masters in Engineering, but I cannot complain. I am grateful for a job in this economy. I stay with my mother in her house (to save on rent..I thought I could move out, but at this time, that wouldn't work out....financially).I manage to save about 300$ a month, after paying my mom and paying for other essential stuff. To save on car loan payments, I decided against owning a car. I have a moped/scooter. I don't have a credit card. I have insurance, but it is very meagre. I don't have sufficient money for healthcare should either me or my mom fall very sick. I am single as I have deliberately put off dating etc.At the moment, I just invest those 300$ in either gold or silver coins. The reason is, all other financial instruments seem too darn complicated for me. I don't understand anything in them and always get the feeling I am being cheated somewhere, when I am handed a contract, with a million words in fine print. I don't have a lot of knowledge on personal finance, but am making an effort to learn, when I get time.So I ask you guys - Is there a better way to make use of my savings of 300$/month (than buy precious metals)??Is there a way I can increase my savings?? (Getting a better paying is not possible at the moment I guess. I am getting the required experience before I do some job hopping). I think these details would help you judge my financial health. If you want more details, just ask.Thanks for your time and effort.
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reader, C. Grant  +, writes (6 August 2012):
 Good for you for getting started on saving. CharliesDevil gave you very good advice on working on your credit rating, and yes, CDs are worth looking into.
This is a very difficult time to be investing, with interest rates being so low and the stock market being whipped around by concerns about Europe, etc. I would caution you, though, that precious metals tend to be a pretty risky thing. You’re buying small coins, and paying retail for them. The price of the metal would have to go up quite a bit for you to make money (because of the spread the retailer charges), and you face the risk that the price could go down as well. Just be aware of the risks you’re running.
Have you thought about taking a course? It wouldn’t hurt to learn about stocks, bonds and other assets – one day you’ll have more money to invest, and while you’ll preserve your capital with CDs, with rates as low as they are you’ll be lucky to match inflation let alone get rich. The current thinking by conservative investors is to buy stocks that pay a good dividend, particularly with companies with a strong history of increasing their dividends. A good introductory course will teach you the basics of financial analysis, so it feels less like a crap shoot. Start by looking at companies whose products you’re familiar with (McDonalds, CISCO, Johnson & Johnson) – it’s easier to wrap you head around what they’re doing than with a company you’re completely unfamiliar with. Given your newness to all this, don’t gamble: your $300 per month is too precious to lose.
Good luck!
A
female
reader, Aunty BimBim  +, writes (6 August 2012):
 Along with the suggestions from Charlies, I suggest you do some online research, search debt free living, you should come up with some interesting strategies for planning for your long term future.
Good luck!
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A
female
reader, charliesdevil73 +, writes (6 August 2012):
 I think it's great you are trying to learn more about finances, it shows that you are trying to be mature about your situation. I also think it is great you are happy to just have a job. Many people straight out of college feel like they earned the high paying job. But, in this economy, that is hard to come by.
I guess my suggestion about your savings would be to look into banks and credit unions in your area. See what they have for investment/savings opportunities. Something that might be smart to do since you have monthly income would be to start an IRA (Individual Retirement Account) now. You can deposit $25/month and still have a large chunk to save. For the saving part, see what accounts these banks and credit unions have. You can chose multiple options if you'd like. Mu husband and I have a savings, CD, 401 (k) and IRA. You don't need to put all your apples in one basket so to speak.
If there is an Affinity Credit Union near you, check that out. They give you "points" for using your debit card which you can redeem for lower interest rates on loans, higher interest rates on savings accounts, and out towards fees to wave them. They also have a CD where you can deposit into as much as you want and you get one free withdrawal per year (which usually isn't allowed). If there is no Affinity near you, look for a CD with similar options. CDs usually have a higher interest rate so that's why I suggest those. You can also just go to a bank or credit union and ask to speak with a personal banker and ask them questions about savings. I would chose a credit union over a bank, since they are general non-profit whereas banks are all about profit.
Also, just a quick question. Why not have a credit card? You are in your mid 20's and I am assuming you do not have any credit history yet. This might be a good use of your savings money as well. Without credit history, it will be harder for you in the future to get a loan, like for a house or a car. And without credit history, you may be forced to take a higher rate on loans since no one can asses your risk. I would suggest getting a credit card or a small loan (like $500-$1000). If you get the credit card, use it every month on small things, like a tank of gas for your scooter or groceries. Then pay the minimum balance plus interest for a couple months them pay it off and start over again. If you go with a loan, pay the minimum balance for at least 6-9 months and then pay it off if possible. This will help you start your credit history and if you maintain it, you could get low rates on loans and credit cards. And speak with a banker about credit scores so you understand them better and how they affect you, since there is more than one score that banks look at to determine your potential risk and it can get confusing.
I hope all works well for you.
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