Money Minder, Can You Help a Budget Newbie?

Hey there Money Minder! I’m a 22-year-old guy who just started working in (tech/finance/law/engineering). I’ve always been pretty good with money, but now that I have a job, I want to make sure I’m doing everything right with my budget for the rest of 2024.

So, I’ve been trying to max out my tax-advantaged accounts this year since my income is lower than it will be in the future. Any tips or advice would be greatly appreciated!

I’ve laid out my financial situation below, from income to expenses. Let me know if you have any suggestions or feedback. It’s color-coded for easy reading!

Here’s a bit more about me:

I’m single and not much of a chef. Quick meals like eggs, frozen veggies, and Costco bulk protein are my go-tos. I buy lunch for $10 at work each day since dinner is usually covered.
I try to stay healthy with weightlifting, oatmeal for breakfast, low carbs, and supplements like Iron, Vitamin D, creatine, tumeric, collagen, fish oil, and a multivitamin.
There might be some months when I spend a bit more on discretionary items, but I’ll adjust by putting less into brokerage.
I have $5k in savings and no expected emergencies. If something does come up, I can borrow interest-free from the bank of mom and dad (which I hope never happens).
Most of my money is in brokerage, but I’m open to upping my 401k Roth contribution. I have cash with Fidelity at a 5% rate, tax-free federally.
Since I started working in July, I’ll only earn half of my yearly salary this tax year, which is good for tax reasons. That’s why I’m doing both Roth 401k and Roth IRA while I’m in a lower tax bracket.
I believe that happiness is about what you have versus what you want. I’ve read books like The Millionaire Next Door, Your Money or Your Life, and The Psychology of Money.
I plan to invest my paychecks into QQQ and aggressive tech growth funds for my 401k. I maxed out my Roth IRA as soon as I could at 18 and don’t plan on selling any time soon.
I’m into churning bank bonuses and getting cash back on credit cards. I try to be savvy about finances.
My hobbies like reading, watching shows, nature, YouTube, hanging out with friends, collecting postcards, and music aren’t super costly. I’m not big on material things and I always look for ways to save (like finding a cheaper gym membership through my health insurance).

Retired and Happy

Response from THE MONEY MINDER:

Hello There,

Congratulations on starting your career and being proactive about optimizing your budget! It seems like you have a solid foundation in place and are already making thoughtful financial decisions.

Given your current situation and goals, here are a few practical suggestions to consider:

Meal Planning: Since you mentioned being busy and not much of a cook, consider meal prepping on weekends to save time and money during the week. This can help you stick to your healthy eating habits while also reducing your food expenses.
Emergency Fund: While it’s great that you have $5k in the bank, consider building your emergency fund to cover at least 3-6 months of living expenses. This will provide you with a financial safety net in case of unexpected events.
Savings Accounts: Look into high-yield savings accounts or money market accounts to potentially earn a higher interest rate on your cash savings. You may want to explore different options to maximize the growth of your emergency fund.
Investment Strategy: Continuously reviewing your investment strategy and adjusting it based on your goals and risk tolerance is important. Consider diversifying your investments beyond tech growth funds to minimize risk and maximize returns over the long term.
Financial Education: Keep educating yourself about personal finance and investing to make informed decisions. Reading books and staying updated on financial news can help you enhance your financial literacy and make better choices with your money.
Lifestyle Adjustments: While it’s great that you are not materialistic and focus on experiences rather than possessions, consider evaluating your spending on non-essential items and experiences. Look for areas where you can cut back without compromising your happiness and financial goals.

Overall, it’s essential to continue monitoring your budget, tracking your expenses, and making adjustments as needed. Remember to prioritize your financial goals while enjoying the present moment. Keep up the good work, and best of luck with optimizing your budget for the rest of 2024!

Farewell from THE MONEY MINDER.