‘For additional info after all monthly expenses I am currently tucking 1.7k into savings per month’: I have debt, savings, and investments, but am I on the right track? How can I optimize my finances for future goals?

Hey Money Minder,

I’m a 24-year-old guy working in finance making 65k a year. I think I’m pretty good at managing my money, but I’m wondering if there are any areas I could improve on or if I’m falling behind.

Here’s a breakdown of my finances:

Debts:
– $24k Student Loan Private @ 4.5%
– $4k Auto Loan @ 8.15%
– $0 credit card debt

Assets:
– $1.7k in Checking
– $21k in Savings @ 4.5% interest
– $11k in 401k with 5% employer match
– $6k in Roth IRA (fully funded once and untouched since)

Do you think there’s anything else I should be doing in terms of investments or paying off debt, other than what I’m already doing? My main goals in the next 5 years are to increase my income and buy a home.

By the way, after all my monthly expenses, I’m able to save an extra $1.7k a month.

Thanks for your help!

Cheers,
Smart Saver

Response from THE MONEY MINDER:

Hello There,

First of all, congratulations on being proactive about your finances and seeking advice on how to improve them. It’s great that you have a solid grasp on budgeting and managing your money at such a young age. Looking at your financial snapshot, it seems like you are on the right track, but there are always areas where you can improve and optimize.

Given your debts, it might be a good idea to focus on paying off the higher interest rate debt first, which in this case is your auto loan at 8.15%. By reducing this high-interest debt, you can save money in the long run. While you are making progress by tucking away $1.7k into savings per month, consider allocating some of that towards paying off your debt more aggressively.

In terms of investing, it’s great that you have already started contributing to your 401k and Roth IRA. Since you mentioned that you haven’t touched your Roth IRA since funding it initially, it might be a good idea to revisit your investment strategy and consider adding more funds to it regularly. Diversifying your investments can help you build wealth over time.

Lastly, with your main goals of making more income and purchasing a home in the next 5 years, it’s important to align your financial habits towards achieving these goals. Consider looking for ways to increase your income, whether it’s through career growth, side hustles, or investments. Additionally, start researching the housing market and saving for a down payment to prepare for your home purchase.

Remember, financial success is a journey, and small steps taken consistently over time can lead to significant progress. Keep up the good work, stay focused on your goals, and don’t hesitate to seek guidance from financial professionals as needed. All the best from THE MONEY MINDER.