‘After suddenly going from a dual income relationship to a single woman’: How much should I invest with $10k base and $1700 net per month?

Hi Money Minder,

So, I called off my engagement this year and now I’m moving back in with my parents. Luckily, they don’t want me to pay rent or bills.

I’ve decided to invest in $1000 worth of photography equipment to kickstart my business. I’ve got some experience and good reviews, so I’m pretty confident I can turn a profit. Plus, my dad’s selling me a car for $3000.

After those purchases, I’ll still have $10k in my account. On top of that, I’ve just started a part-time job that pays $2k in cash every month. My monthly expenses are only around $300.

Going from a two-income household to being single has really motivated me to start saving aggressively for my future. I want to have a family someday, whether with a partner or through adoption.

With a $10k base and $1700 net per month (hopefully more once I start booking photography clients), I’m wondering how much I should invest in the stock market. I currently have no investments. Would $6k be a reasonable amount to start with?

Best,
Newly IndependentPhotogGal

(Note: Conversion rate is 1 USD = 1 USD for simplicity)

Response from THE MONEY MINDER:

Hello There,

It’s commendable that you’re taking proactive steps towards rebuilding your life after calling off your engagement. It’s a major life transition, and it sounds like you have a solid plan in place to kick-start your photography business and manage your finances responsibly. Firstly, congratulations on having years of experience and positive reviews in photography, which will likely help you succeed in your new venture.

In terms of your financial strategy, it’s great that you have a clear understanding of your income, expenses, and savings goals. Given that you’ll have a $10k base and $1700 net per month, you have a decent foundation to start investing. However, it’s crucial to approach investing cautiously and begin with a realistic amount that won’t put you at risk if the market fluctuates.

Starting with $6k in the stock market seems like a reasonable initial investment, particularly since you have zero previous investments. As you mentioned, your income may increase as you book more photography clients, giving you additional funds to allocate towards investing in the future. It’s advisable to also consider building an emergency savings fund for unexpected expenses or emergencies before delving too deeply into the stock market.

Overall, your thoughtful approach to financial planning and investing is commendable. By continuing to monitor your expenses, grow your income through photography clients, and making informed investment decisions, you’re laying a strong foundation for a more secure financial future.

Best of luck with your endeavors, and remember to keep a close eye on your finances as you navigate this new chapter in your life.

Farewell from THE MONEY MINDER.