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Originally Posted by The Warden
I'm doing the exact same thing right now. For things other than regular bills (auto insurance is actually my only one now; I'm still at home, so no rent/utilities...yet) and special circumstances (such as a truck project), I give myself $150 per month. It's turned me into an outright frugal spender, and I had enough extra at the end of last year that I was finally able to open a savings account. I've even got a small amount set aside to put in an index fund. 
I just hope i can keep this level of discipline as more $$ becomes available... |
I don't know if I would go index funds in this economy. The US economy is walking a tightrope. Today's news that we not only ran a huge trade deficit of 60 billion, we also saw our EXPORTS drop even tho the dollar is cheap as dirt, is bad news. If these chickens ever come home to roost, those indexes are going to tank if you are in all-US stocks. Buy indexes when you see real strength in the stock market. Right now, if I was just starting out, I would consider a conservative mutual if I only had a limited amount of money to pack away each month. Fidelity Puritan is a good one, but there are plenty others. Keep it there until you get a sizable nest egg, to the point you can diversify in three or four investments in $2,000 chunks, and then get into the risky stuff.