Issue Date: December 1, 2002
Painless ways to save
Are you saving and investing enough for your future?
A solid half of Generation Xers -- people between 21 and 34 -- answer that question with a resounding "no," according to new research from a leading investment firm. That's not surprising, considering that more than 40% of this group also describe themselves as living from paycheck to paycheck.
Unfortunately, tips on how to save money (which you could then invest) too often fall into the "coffee cliché" category. (You know, trade down your morning beverage of choice from a $3.50 half-caff mochaccino to a $1 cup of joe and save $650 a year.) It sounds good, but you've heard it before.
Now, a Web calculator from Oppenheimer Funds, source of the Gen-X research, takes that advice and runs with it. Choose where you're willing to cut back (switch to a free Internet provider, quit the gym and exercise in the park), then see how much you'd save and what those savings (earning 8%) could grow to 10 or even 50 years down the road. It's compelling. See the chart below or go to oppenheimerfunds.com (click on "Investor Education," then "Generation X").
| Penny-pinching
If you're willing to: |
You'd save: |
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Avoid ATMs that are not in your bank's network three times a month
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$54 |
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Rent a video instead of seeing a movie once a month |
$48 |
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Use free cellphone minutes to make two 30-minute long-distance calls per month
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$50.40 |
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Switch to a free Internet service provider
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$155.40 |
Total savings:
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$307.80 |
What that money would be worth, invested at 8%
In 10 years: $4,692
In 30 years: $38,227
In 50 years: $203,448
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Note: My Nov. 1-3 column should have said those paying estimated quarterly taxes can make the Jan. 15 payment in December and count any state tax as a deductible expense.
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