Where to go from here?

[eerrr1]

I 26(F) just recently started trying to save up after getting a new job and want to start planning for my future. Advice on where to park my money (funds, accounts, or any suggestions) would be much appreciated! Right now, I have:

Employment Income:
Job 1 (main job): $45/hr x ~28.5 hrs/wk x 48 wks/yr = ~$61,560/yr
Job 2 (W2 side job): $18.25/hr x 7-28 hrs/month x 12 mo/yr = ~$1,533-$6,132/yr

Loans:
Student Loan 1: $5,809.63 @ 3.510%
Student Loan 2: $1,374.64 @ 4.200% for a total balance of $7,184.27

Bank Accounts:
Checking 1 (BoA): $1,550 (min $1,500 to avoid fees)
Checking 2 (local bank): $1,736.51
Savings (local bank): $500
Cash: $1,000

Robinhood:
~$1,073 current value spread out mostly in BTC, MSFT, DIS, CMG, PYPL, AAPL, COST, NVDA from when I first started trying to invest a few years ago (I put in $760)

Fidelity:
Brokerage (“Savings”): Total of $236.66
FXAIX $186.60
FZROX $49.99
SPAXX $0.07

Brokerage (“Checking”) which I was planning to use as an overdraft account for Fidelity’s CMA:
FXAIX $21.95

CMA $0

HSA $0 - my employer hasn’t gotten back to me about depositing straight from my paycheck/DD

Roth IRA (current values)
FXAIX $709.84
FZILX $149.99
FXNAX $150.00
FTIHX $300.87
FZROX $1,706.05
CD @ 5.55% (matures end of Nov) $1,003.69
Total Account Value: $4,070.84

I’m going to try to max my 2023 contributions in the next two weeks for my Roth IRA.

I don’t have a 401K currently but hoping to start contributing to one around May/June of this year once I hit the 1 year mark at my main job.

Yearly Expenses:
~$250 for work stuff
~$200 for health stuff
~$300-500 for retail therapy/impulse purchases (trying to stop/cut back on this)

Monthly Expenses:
$3.02 (iCloud)
$2.99 (Game)
$120-$330 (Massage Therapy/Chiropractor)
$80-$100 (Gas)
$170 (Health Insurance - deducted from paycheck)
$280-$400 (Food)
$250 (Auto Pay - Student Loans)
$70 (Cat Care)

Whenever I can pay with my Best Buy Visa Credit Card (food, gas, shopping, etc) I do so and pay off in full monthly. My credit score is high 700s.

Misc Expenses/Personal Loans
~$30,000 to my parents for phone bills, car, etc that they’ve helped me with over the years (they are not asking me to pay them back or in need of the money and would rather me catch up on investing, but I would like to pay them back eventually)

Thanks for reading if you made it this far!

 

[argon]

@eerrr1 The fact that you are this detailed about your financial situation tells me that you are well on your way. Keep working toward maxing your retirement accounts. You can probably pay off your debt over the next two years.

Start putting concrete numbers to your short and long-term goals and that will help you decide which accounts/funds they should be invested in.

 

[eerrr1]

@argon Thank you! I was super aggressive when I first started this job and paid off two student loans already. At the start I owed about 23k on them. Around the halfway point I started splitting my extra money between the loans and retirement planning trying to catch up to the max for 2023.

 

[briantheguydude]

@eerrr1 Unless I’m not seeing it you should really have an emergency fund.

 

[eerrr1]

@briantheguydude Haha that would be my $500 savings account

 

[dreamer123]

@eerrr1 Have you already created a budget and seen how much money you have left over to save for your future goals?

 

[eerrr1]

@dreamer123 Sort of. After monthly expenses I’d have roughly $2,600-$3,000 I can put away per month. My main goal is maxing out Roth IRA then student loan payments then savings. Once/if I can get the HSA and 401K into the mix, then my order would probably be Roth/401K, HSA, savings/student loan payments.

 

[dreamer123]

@eerrr1 That sounds like a solid plan to me. After maxing out your Roth for both years and paying debts where you save next is up to you. What you decide to save for will determine what account you’ll want to boost.

 

[eerrr1]

@dreamer123 Do you think large savings like a down payment for a house would be best in a brokerage or HYSA type? And for smaller goals like a new computer or a vacation? I’m just not sure where to park the funds for savings like this. I know fidelity has the SPAXX core thing that generates interest like a HYSA. But I’m unsure if that’s enough or if it should be invested instead of sitting as cash.

 

[dreamer123]

@eerrr1 Where you save the money, and what fund you invest in, is about when you need it and not the amount.

A general rule of thumb you’ll find is for any money you need within 3 years keep in a low risk place. Some more conservative people will say 4-5 years.
With interest rates being higher right now it’s not a bad deal for the money you’ll need in 0-3 years to sit in a HYSA, a CD, Treasury Bills or a money market account (this is SPAXX). These are all around 4-5% right now which is a great deal for short term savings. I use a HYSA personally because it’s easiest for me and I like being able to access my money if I need it. SPAXX will give you this benefit as well.

You never know what markets will do short term but they recover if given enough time. So for savings you’ll need in more than 3 years it’s not as risky to invest in a brokerage account.
I have my future home down payment invested in an SP500 index fund in a brokerage because I have no set time I want to buy a house yet. I’m guessing 4-6 years.

Also, I’ll disclaim that I’m an enthusiast and not a licensed pro so google and research everything I’m saying so you can see for yourself the trends and advice you’ll find from other sources online.

 

[eerrr1]

@dreamer123 Thank you so much for your explanation! it makes a lot of sense to save that way. Safe for short term, able to swing with the market for long term savings. For yourself, how soon before buying a house would you switch your down payment to safer investments like a CD, HYSA etc? Or would you just wait until you need it then sell?

 

[dreamer123]

@eerrr1 You’re welcome! I think what I’ll do is move the money over in portions once I know a solid time frame and home price. I’d want it all safe at 2 years out. Though if I save a lot I may move 20% of the home price to a safe place and then let the rest grow all the way up until home purchase. Kind of like a best of both worlds approach.
I’ll put more thought in to it when the time comes and probably ask Reddit what they would do.

 

[eerrr1]

@dreamer123 Sounds like a solid plan thanks! I love hearing what others are planning