"I am unsure if I am in a good financial position as a 22yo female who lives alone": Worried about my debt, savings, and investments. Am I on the right track?

Hey Money Minder!

I’m 22 and here’s the scoop on my money situation: I work full time as a server and rake in anywhere from $3k-5k each month.

My expenses:

Rent: $1150/month
Car: $310/month
Groceries: about $300/month
Insurance/phone: $170/month
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Debts:

Car: $16,000 at 7.6% interest
Credit card: $2,000 at 0% interest for the first year

My investments:

Roth IRA: $13,200
Index Funds: $1,800
Crypto: $5,000
Stocks (AMD NVIDIA S&P): $200
401k: $7,100
Savings: $500

I chuck 5% of my paycheck into my 401k with a cheeky 5% company match, 3% goes to individual stocks (just started dabbling last month), and 7% heads to my savings (rebuilding, baby!). I’ve also signed up for an employee stock purchasing program, where 6% of my check buys me discount stock at the lowest price in the last 6 months. The rest of my dough gets swallowed up by bills and personal splurges.

-I paused contributions to my Roth IRA during the lean summer months, but kept the 401k train chugging along
-I hit the brakes on crypto investments
-All my investments are in the green (crypto, Roth, 401k, index funds).

I’m a bit unsure of my financial standing as a solo 22-year-old lady. I’m aiming to squash debt quick, save up for property investing, and grow my personal portfolio. I’ve been making educated guesses with my money, no expert advice in sight. Any pearls of wisdom?

Disclaimer: I get it, not everyone’s on board with crypto, but I’ve seen a whopping 140% growth with ETH and BTC over the past 3 years. I’ve cut off funding, but still holding tight.

Later, Seeking Advice

Response from THE MONEY MINDER:

Hello There,

While it sounds like you are doing a great job managing your finances, there are a few areas where you could potentially make some adjustments to reach your financial goals more effectively. First of all, congratulations on the impressive growth and diversification of your investment portfolio at such a young age. Your dedication to contributing to your 401k, individual stocks, and savings is commendable.

However, let’s address the elephant in the room – your debt. With a car loan and credit card debt looming over you, it would be beneficial to prioritize paying off these high-interest debts as soon as possible. Given that your credit card debt is at 0% interest for the first year, you may want to focus on tackling your car loan first, especially considering the interest rate. Consider allocating a higher percentage of your monthly income towards debt repayment until they are fully paid off.

Regarding your investment strategy, it’s great that you are already investing in various avenues, but it might be a good idea to reassess your allocations. You mentioned that you have stopped contributing to your Roth IRA and crypto investments for the time being. Since you are in a good position with your investments, you could potentially redirect some of those funds towards paying off your debts faster. Once you have cleared your debt, you can resume contributions to your Roth IRA and explore other investment opportunities, such as real estate, based on your long-term goals.

Overall, it seems like you have a solid foundation in place and just need to fine-tune your financial strategy to align with your objectives. Consider seeking guidance from a financial advisor who can provide personalized advice based on your specific situation and goals. Remember, Rome wasn’t built in a day, and financial stability takes time and careful planning. Keep up the good work, stay focused, and you will be well on your way to achieving your financial aspirations.

Best of luck on your financial journey!
THE MONEY MINDER