Originally Posted By: GMFan
Originally Posted By: Pop_Rivit
It may not seem like it when you're 29, but about the time you reach your late 50's and retirement is looming large in the windshield, you'll realize how much that self discipline paid off, especially when the people around you are bemoaning the fact that they failed to plan, and they hope that social security will be enough to get them by in their golden years. It happens sooner and faster than you think.
Great point. I've been contributing to a 401k since 22 years old once I got my first job out of school and for the last few years now I've been maxing out my 401k and Roth IRA. The "winging-it" budget is pretty much near impossible at my income level when maxing out these accounts but I know full well the benefits of doing so. This is not to say that I haven't been dreaming of and at this point nearly hear the exhaust note of a brand new V8 5.0L Mustang in my sleep. Every couple of weeks I pull up some classic Dave Ramsey "new car rant" on YouTube to slap sense into me so I stay the course.
Personally (this is strictly personal), I wouldn't max out Roth IRA or 401k before buying a home. The reason is that both home and Roth IRA are investment and home would reduce your living expense now (in theory at least), while Roth should only be withdrawn after retirement. I would contribute 401k up to the employer matched portion and then put the rest of the money in the "down payment saving fund" instead.
Now if you are not as disciplined and want to stay away from distraction by using a Roth IRA, that's ok too.
There are many ways to reduce living expense. As mentioned the cable bill can be almost eliminated if you cut the cord and use only cheap, low speed internet (probably around $20-35 a month), and stream video via free or near free service (Library has a lot of free video you can borrow if you don't need the latest and greatest). Cell phone can be cheap if you go to low cost provider like Cricket or MetroPCS, etc, and find a few friends to split a family plan (I am on Cricket and pay $20 per line with 2.5GB / mo, it is ATT being slightly slower).
The biggest saving you can do at your age is to share an apartment with a roommate or two.