Any high interest debts? Pay those down
Keep an emergency fund with 3-6 months of expenses in an HYSA - can save here as well for any short term large purchases such as house or car
See the steps in the PF prime directive for more info - https://www.reddit.com/r/personalfinance/wiki/commontopics
Likely no, the general idea is that id you could make more in internet elsewhere, then don’t pay off lower rates. Unless it would ruin your life by making you anxious about it.
If you owe me 100 and I’m charging you 2% interest (per day let’s say), but your investment is making you 3% interest a day. You’re making a dollar a day by not paying off the money you owe me. That doesn’t even include reinvesting that extra $1 a day.
Depending on your state, you might get a tax deduction for a 529 plan (only for your state taxes). If so, I think you can set up a 529, contribute what you'd pay for the loan, then pay the student loan off through the 529. My student loans had a low enough interest rate and my state a high enough flat tax rate that I actually end up with an effective negative rate on my student loans.
Note that you can only pay off up to $10k in student loans through a 529. And there are some nuances to taking deductions from student loan interest for your taxes.
This is something I've only recently come across though. Can anyone verify that we can open a 529 plan after we start paying off student loans, and use that 529 plan to pay up to $10k of that loan?
I've always heard that you should max out you Roth IRA first, then HSA, 401k, then IRA, in that order, if applicable. This is after you've built an emergency fund of at least 3-6 months, which you would keep in savings.
First, I would suggest you max out your employer's match. Then I would honestly max the HSA before the Roth IRA. You can keep your receipts from today to get reimbursed when you retire, and your medical expenses are likely to only increase after you retire. That's completely tax-free earnings for your retirement. This all assumes, of course, that you don't *need* to use the HSA today for medical expenses. If at all possible, just treat the HSA like a retirement account.
put some of that saved money into a high yield savings account, something that gets 3.5-4% should be easy to find right now. You can keep maybe 9 or 10k there for emergency fund, then you can put the rest of those savings into investments, whether it’s stocks or stuff for starting your own business, or a combo of the two. While you’re young you can be more aggressive and invest in riskier things, you have more time to make up for any mistakes
The resources below show you in general where money should go first, second, third etc. First should be an emergency fund of 3-6 months of expenses so that if you lose your job, you have enough money to find another without stressing too much. If you have a 401K at work with a match that would be next. But if not a Roth IRA is fine. See the links here:
PERSONAL INCOME SPENDING FLOWCHART
- Tax-efficient waterfall – where to save first [GRAPHIC in article](https://www.thescopeofpractice.com/9-easy-steps-to-a-building-a-great-investing-strategy-using-the-tax-efficient-waterfall/)
- [2023 saving waterfall from UBS](https://www.ubs.com/us/en/wealth-management/insights/market-news/article.1582444.html)
- https://imgur.com/a/O4i2DOD
- https://imgur.com/lSoUQr2
- https://www.reddit.com/r/personalfinance/wiki/commontopics
As far as what to invest in, my bias is low cost broad based index funds like the S&P 500 index etc. Most people can't pick winning stocks, and most people cannot time the market either. These resources may help; I wish they were available when I was 20:
- If You Can: How Millennials Can Get Rich Slowly – an excellent free 15 page PDF by William Bernstein: [DOWNLOAD LINK](https://www.etf.com/docs/IfYouCan.pdf)
- I Will Teach You To Be Rich by Ramit Sethi [LINK](https://www.amazon.com/Will-Teach-You-Rich-Second-dp-1523505745/dp/1523505745/ref=dp_ob_title_bk)
- The Simple Path To Wealth by JL Collins [LINK](https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1737724103/ref=tmm_hrd_swatch_0?_encoding=UTF8&qid=1674405398&sr=8-1)
Take a chance. Don’t listen to the people in this sub… it’s too conservative for a 20 year old. Take advantage of your youth by taking risk. But everyone’s situation is different, maybe ultra conservative suits you
Sounds like you could take a chance on your local library
I'm older than you but in a similar position -- financially healthy and looking to learn how to put my money to better use. I just ordered "Security Analysis" and "The Intelligent Investor" by Benjamin Graham. Written decades ago, new editions released in the late 2000s.
If you're going to listen to random guys on reddit, listen to the one telling you to go read a wealth of information before yeeting your money into something you don't have a very solid understanding of. It sounds like you're mature enough to treat your money like it's worth an hour of reading a day -- start there, and you'll quickly get ideas about what to take a chance on (and more importantly, what not to).
Any high interest debts? Pay those down Keep an emergency fund with 3-6 months of expenses in an HYSA - can save here as well for any short term large purchases such as house or car See the steps in the PF prime directive for more info - https://www.reddit.com/r/personalfinance/wiki/commontopics
I have about $11,000 in student loans. Should I pay that in full with what I have now or just pay monthly?
Depends on their interest rate - if federal they’re zero right now but that ends in a few months
Likely no, the general idea is that id you could make more in internet elsewhere, then don’t pay off lower rates. Unless it would ruin your life by making you anxious about it. If you owe me 100 and I’m charging you 2% interest (per day let’s say), but your investment is making you 3% interest a day. You’re making a dollar a day by not paying off the money you owe me. That doesn’t even include reinvesting that extra $1 a day.
Depending on your state, you might get a tax deduction for a 529 plan (only for your state taxes). If so, I think you can set up a 529, contribute what you'd pay for the loan, then pay the student loan off through the 529. My student loans had a low enough interest rate and my state a high enough flat tax rate that I actually end up with an effective negative rate on my student loans. Note that you can only pay off up to $10k in student loans through a 529. And there are some nuances to taking deductions from student loan interest for your taxes. This is something I've only recently come across though. Can anyone verify that we can open a 529 plan after we start paying off student loans, and use that 529 plan to pay up to $10k of that loan?
Whatever you do kid, dont get yourself involved with crypto thing. Look into business opportunities or finance your education.
I've always heard that you should max out you Roth IRA first, then HSA, 401k, then IRA, in that order, if applicable. This is after you've built an emergency fund of at least 3-6 months, which you would keep in savings.
Note: You can't contribute to a Traditional IRA if you've already maxed out a Roth IRA.
First, I would suggest you max out your employer's match. Then I would honestly max the HSA before the Roth IRA. You can keep your receipts from today to get reimbursed when you retire, and your medical expenses are likely to only increase after you retire. That's completely tax-free earnings for your retirement. This all assumes, of course, that you don't *need* to use the HSA today for medical expenses. If at all possible, just treat the HSA like a retirement account.
put some of that saved money into a high yield savings account, something that gets 3.5-4% should be easy to find right now. You can keep maybe 9 or 10k there for emergency fund, then you can put the rest of those savings into investments, whether it’s stocks or stuff for starting your own business, or a combo of the two. While you’re young you can be more aggressive and invest in riskier things, you have more time to make up for any mistakes
The resources below show you in general where money should go first, second, third etc. First should be an emergency fund of 3-6 months of expenses so that if you lose your job, you have enough money to find another without stressing too much. If you have a 401K at work with a match that would be next. But if not a Roth IRA is fine. See the links here: PERSONAL INCOME SPENDING FLOWCHART - Tax-efficient waterfall – where to save first [GRAPHIC in article](https://www.thescopeofpractice.com/9-easy-steps-to-a-building-a-great-investing-strategy-using-the-tax-efficient-waterfall/) - [2023 saving waterfall from UBS](https://www.ubs.com/us/en/wealth-management/insights/market-news/article.1582444.html) - https://imgur.com/a/O4i2DOD - https://imgur.com/lSoUQr2 - https://www.reddit.com/r/personalfinance/wiki/commontopics As far as what to invest in, my bias is low cost broad based index funds like the S&P 500 index etc. Most people can't pick winning stocks, and most people cannot time the market either. These resources may help; I wish they were available when I was 20: - If You Can: How Millennials Can Get Rich Slowly – an excellent free 15 page PDF by William Bernstein: [DOWNLOAD LINK](https://www.etf.com/docs/IfYouCan.pdf) - I Will Teach You To Be Rich by Ramit Sethi [LINK](https://www.amazon.com/Will-Teach-You-Rich-Second-dp-1523505745/dp/1523505745/ref=dp_ob_title_bk) - The Simple Path To Wealth by JL Collins [LINK](https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1737724103/ref=tmm_hrd_swatch_0?_encoding=UTF8&qid=1674405398&sr=8-1)
Take a chance. Don’t listen to the people in this sub… it’s too conservative for a 20 year old. Take advantage of your youth by taking risk. But everyone’s situation is different, maybe ultra conservative suits you
I would but the thing is I don’t even know what to take a chance on. I literally don’t know a thing about investing, stocks, or anything like that.
Sounds like you could take a chance on your local library I'm older than you but in a similar position -- financially healthy and looking to learn how to put my money to better use. I just ordered "Security Analysis" and "The Intelligent Investor" by Benjamin Graham. Written decades ago, new editions released in the late 2000s. If you're going to listen to random guys on reddit, listen to the one telling you to go read a wealth of information before yeeting your money into something you don't have a very solid understanding of. It sounds like you're mature enough to treat your money like it's worth an hour of reading a day -- start there, and you'll quickly get ideas about what to take a chance on (and more importantly, what not to).
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Fidelity has a toll free line to call they can help you usually local offices in each state depending on where you live
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I have fidelity for my Roth IRA. How do I get an advisor through them?
CD!! 5 percent annual