MSN Money article: Start investing with just $100

[Cassie]

Congratulations on getting rid of your debt!! That's awsome

I'm not sure if you'll find this article I wrote helpful, but I'm beginning to explore my financial opportunities as well. I thought I'd share it with you.

Financial Savviness 101: Making Your Money Work For You

I'm currently setting up my (meager) savings into an online savings account and researching what other viable options I have. But remember to start saving now. Welcome aboard to the greater financial awareness club! *hugs*

[elainevdw]

Cassie, you know what's absolutely hilarious? I was reading your blog immediately prior to realizing I can pay off that stupid loan!

Then, when I was checking today's loan payoff amount, I saw that my bank seems to be offering start-up investment accounts with as little as $20-$50.

I might start the weekend with one piece of remaining debt (my last student loan, which isn't so bad -- under 10K) and a new money market savings account! So, thank you!

[Cassie]

That's what I'm currently researching, to see what will yield me better long-term growth for my current situation, a money market mutual fund or an online savings account. I still have student loans and a car to pay off so I need to keep my assets more liquid than I'd like to at this point *grumble*

*shakes fist in air* Some day, though, I will be debt-free!

[elainevdw]

Hey, if eggplant Elaine (my new nickname, apparently) can start clawing out of the hole, you can too. I graduated in 2004 with student loans, credit card debt, and a consumer loan I took out to pay off the taxes I forgot to save up for in my job as an independent contractor. Granted, my mom helped me a bit a year ago, but it's still a rush to pay that crap off.

My bank is USAA -- they're great, but only avaiable to military and their families, I think. (My grandpa was in the military.) They had an online guidance system that helps you choose which kind of investment to pursue, and since I have no emergency savings (it's all going to paying stuff off), they recommended money market. Which is interesting, because my boyfriend also recommended me starting a money market savings account, except that the usual minimum to start is $2,500.

[Erki]

How high are tuition fees in the US? In Estonia I think they are normally around $2,500/year or so. If the exam results are good enough then we don't have to pay anything, luckily my exams went well enough and I got a free place, don't know for how long though...

I have read a bit about financial stuff but found it a bit...complicated I think I can also join the eggplant club... However, I'm more interested in knowing how to get the money I need than financial things in general...hope you understand me...

[elainevdw]

Originally Posted by Erki

How high are tuition fees in the US? In Estonia I think they are normally around $2,500/year or so. If the exam results are good enough then we don't have to pay anything, luckily my exams went well enough and I got a free place, don't know for how long though...

That's an excellent question. I had to Google it! For a 4-year public university, I think the average is around $4,500 year. Cassie links to this great USATODAY article on what sort of debt American 20-somethings are facing thanks to college. We're told to go into debt for our degrees, with the idea that we'll get great paying jobs and pay it all back after we graduate. But average tuition costs have doubled in the past four years, and the starting salaries for college grads are dropping, if you compare them against inflation.

Personally, I was stupid with college finances. I applied for scholarships and financial aid and received enough to completely pay for tuition and have about $2,000 left over each semester for books, fees, living expenses, etc. For personal reasons, I decided to switch schools, and lost all but two scholarships. Then I hated that school and moved right back to my original school after one semester -- but I couldn't regain my scholarships... I may always kick myself for being that much of an... eggplant!

However, I also graduated in three years because I got dual high school and college credit in my last two years of high school (this isn't a very common program in the US, from what I can tell). So I feel really lucky, financially, compared to all the other people I graduated with who are probably wallowing in debt right now.

[Nneka]

Elaine,

If you're looking for more finance information, check out the Carnival of Personal Finance that got started at Consumerism Commentary. It will give you a variety of views and a spectrum of expertise (from newbie to certified financial planner). Also it will introduce you to some sites for regular reading. They cover everything finance related and way more on the practical side.

As a freelancer, you might also want to look into a SoloK (link provides a comparison of retirment plans available to self employed). My understanding is that a Solo K is a 401K for the self employed. You can also start with a traditional IRA if you want to defer the taxes like a 401K. The IRA limit is set much lower than the 401K and SoloK limit.

Also, sounds like you might need to establish a cushion. You can open a high yield savings account (rate comparisons) with 0 dollars. The money is fairly liquid. It's not as accessible as having a debit card, but if you need it you can do a tranfer into your checking. The interest is now 4+%.

My favorite finance blogs are:
I Will Teach You to Be Rich - He doesn't post much now, but there is a treasure trove of practical newbie information.
Consumerism Commentary - He posts his P&L and balance sheet once a month so that you can see the numbers. He also posts very regularly and provides up to date info.
All Things Financial - He is, currently or formerly, a fianancial planner.
Blueprint for Financial Prosperity

I'm not affiliated with any of those sites. I just found them helpful in my financial journey. I am still very much a newbie. My financial goals for 2008 are to save 10% of all my income, have $1000 stashed for emergencies, generate $3000/month in income outside my day job, and be completely insured. That's what I consider the round off to the secure level and a bit at the comfortable level of Rich Dad.

Hope that helped,
Nneka