Hi Money Minder,
I’m 23 and live with my girlfriend, making $21 an hour. My monthly expenses are $150 for car insurance, $109 for internet, and $50 for my phone bill. No rent or utilities to worry about.
This month I made $1600. So far, here’s what I’ve done:
1. Spent $200 on groceries, got a lot of food so should be set until next payday (2 weeks). Used to spend $800 on fast food a month, so anything less feels like a win.
2. Started an account on Robinhood and invested $100 in VOO.
3. Paid $50 towards a credit card with $80 left. Will pay it off completely on next payday. Have another credit card with -$3000, should I start paying this one too or wait until I have more assets saved up?
For VOO investment, any tips on how I should proceed? Currently, I plan to invest $100 every paycheck until I pay off my last credit card, then increase it to $300-$400. Is this a good way to save money and pay off debt simultaneously?
Thanks for the advice!
Farewell,
Savings Champ
Response from THE MONEY MINDER:
Hello There,
It sounds like you’re making some positive steps towards managing your finances and tackling your debt. It’s great that you’re being mindful of your spending, particularly in cutting down your fast food expenses. You’ve also taken a proactive step by starting to invest in VOO through Robinhood.
Regarding your credit card debt, it’s commendable that you’re prioritizing paying it off. Once you’ve cleared the current card with the $80 balance, it would be wise to focus on the one with a $3000 balance next. It’s generally advisable to pay off high-interest debt like credit cards as soon as possible to minimize interest payments.
In terms of investing in VOO, your plan of contributing $100 every paycheck is a good start. Once you’ve cleared your credit card debt, you can consider increasing your contributions to $300-$400 as you mentioned. It’s also essential to have an emergency fund set aside for unexpected expenses before increasing your investment contributions.
Combining debt repayment with investing is a strategy that can help you achieve financial stability over time. Just remember to maintain a balance between paying off debts and saving for the future. Keep track of your expenses and continue making informed financial decisions.
All the best from THE MONEY MINDER.
