Hi Money Minder,
I’ve been busting my butt to knock out my debt, but I still have a little ways to go. Now that I’m almost debt-free, I’ve got some options on how to move forward.
Here’s the lowdown on my (30M) finances and goals:
FINANCES
- $120k salary + annual bonus
- $5,200 take home pay after all deductions
- $3,500-4,000 in monthly living expenses
- 401k maxed out
- $20k in a High-Yield Savings Account
- $85k in 401(k), $7k in Roth IRA
- $18k in student loans at 5.2%, $150/month
GOALS
- Be debt-free
- Save for a house down payment
- Consistently max out 401(k) and Roth IRA
Where should I start, Money Minder? What’s your game plan for me?
Sincerely,
Financially Focused
Response from THE MONEY MINDER:
Hello There,
Congratulations on your hard work in paying down your debt! It’s no small feat, and you should be proud of what you’ve accomplished so far. Now that you are looking towards the future, it’s great that you have clear financial goals in mind.
Given your financial picture and goals, it seems like you are currently in a good position to tackle your remaining student loan debt while still continuing to save for a house down payment and maximize your retirement contributions. With a take-home pay of $5,200 and monthly living expenses of $3,500-$4,000, you have a decent amount of wiggle room to allocate towards your various goals.
Considering your student loan debt of $18k at 5.2% interest, it might be wise to prioritize paying that off as soon as possible to free up more funds for saving towards a house down payment and consistently maxing out your 401(k) and Roth IRA. By paying off your student loans, you will not only eliminate that debt but also potentially save money on interest in the long run.
After paying off your student loans, you can focus on building up your emergency fund in the HYSA while contributing towards your house down payment savings goal and continuing to maximize your retirement contributions. By setting up a clear plan and budgeting effectively, you can make steady progress towards all your financial goals.
Remember, it’s important to strike a balance between paying off debt, saving for short-term goals like a house down payment, and investing for your long-term future. With your disciplined approach and clear goals, you are well on your way to financial success.
Best of luck as you navigate your financial journey!
Farewell from THE MONEY MINDER.
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