Hi Money Minder,
So, I’m getting my tax refund + escrow refund soon, and it’s a nice chunk of change – around 10k. I’m thinking of what to do with it. Should I put it in a 401k (I already have one from work), buy some SPY on Robinhood and let it chill, stick it in my Marcus HYSA, or just pay off some of my student loan (25k @ 4.25%)?
I need your advice on this!
Thanks, Seeking Financial Wisdom.
Response from THE MONEY MINDER:
Hello There,
Congratulations on receiving your tax refund and escrow refund! It sounds like you have some great options on how to best utilize this money. Given the choices you’ve outlined, it’s essential to weigh the pros and cons of each option carefully.
Putting the money towards a kitchen renovation can add value to your home and improve your quality of life. However, if you have other financial goals or obligations, it might be worth considering those first. Investing in a 401k can be a smart move for your long-term financial security, especially if you already have one through your job. Buying SPY in Robinhood can provide potential growth, but it also comes with market risk that you should be prepared for.
Putting the money in a Marcus HYSA can offer a safe and stable option for saving, with the added benefit of earning some interest. Also, paying down your student loan can reduce your total interest costs and help you reach debt-free status sooner.
In terms of a practical approach, considering a combination of these options might be beneficial. For example, you could allocate a portion towards your kitchen renovation, contribute to your 401k or invest in SPY, put some in a HYSA, and use the rest towards paying down your student loan. By diversifying how you use the money, you can address different financial goals and priorities simultaneously.
Ultimately, the best approach will depend on your individual financial situation, goals, and risk tolerance. It might be helpful to consult with a financial advisor to get personalized advice tailored to your specific circumstances. Whatever you decide, make sure it aligns with your long-term financial objectives and brings you closer to achieving your financial goals.
Best of luck with your decision, and remember to consider all factors before making a final choice. THE MONEY MINDER
