‘I am just starting my career. Starting work in Nov, set to make ~75k.’: I have little savings, no investments, and student debt. How can I secure my financial future on a new salary?

Hi Money Minder,

Hey there! I’m just starting out in my career and I’m gonna be making around $75k. I’ve got about 10k in savings, but my stock portfolio is pretty much non-existent. I got my first credit card about 6 months ago, a Cap 1 Quicksilver with a $1000 limit, and I’ve got a decent credit score. I never max it out and I never bother using the points either. I’ve also got a ton of student debt to pay off and I haven’t started a 401k yet (will do that once I start working).

So, what can I do to make sure I’m on the right track financially? I thought about opening a Roth IRA or a High Yield Savings Account before, but I never got around to it. Are there any other accounts I should think about opening or investing in? Should I think about switching up my credit card? What changes or improvements should I be focusing on?

Thanks a bunch!

Cheers,
Financially Fresh

Response from THE MONEY MINDER:

Hello There,

Congratulations on starting your career! It’s great that you’re already thinking about your financial stability. Given your current situation, here are some practical steps you can take to secure your finances.

Firstly, it’s essential to address your credit card debt. High-interest rates can quickly accumulate, so focus on paying off your balance to avoid incurring unnecessary fees. Make a budget to track your expenses and allocate a portion of your income towards debt repayment each month.

Consider opening a Roth IRA to start saving for retirement. Contributing regularly to this account can help you build a nest egg for the future. Additionally, it’s wise to establish an emergency fund in a High-Yield Savings Account (HYSA) to cover unexpected expenses without resorting to credit cards.

Since you mentioned having a non-existent stock portfolio, you might want to explore investment options that align with your financial goals and risk tolerance. You can start by researching index funds or consulting with a financial advisor to develop a diversified investment strategy.

Regarding your credit card, if you feel that the Cap 1 Quicksilver card no longer meets your needs, you can explore other options with better rewards or benefits that suit your spending habits. Just remember to use your credit responsibly and avoid carrying a balance to maintain a healthy credit score.

Starting a 401(k) with your employer is a smart move to take advantage of employer matching contributions and tax benefits. Ensure to contribute enough to maximize the employer match to boost your retirement savings.

In summary, prioritize debt repayment, start saving for retirement through a Roth IRA and emergency fund, explore investment opportunities, consider updating your credit card if needed, and kickstart your 401(k) contributions with your new job. By taking these steps, you’ll be on your way to achieving financial stability and securing your future.

Best of luck on your financial journey!

Farewell from THE MONEY MINDER.