<p>Hey Money Minder!</p>
<p>So, I've got my first "real" job lined up for next month. It's exciting and all, but also kinda overwhelming with stuff like health insurance, retirement planning, and investing on the horizon. I wanna make sure I'm setting myself up well by saving, investing, and managing my funds smartly.</p>
<p>I've checked out the flow chart and have a rough idea of what I should do, but I'd really appreciate any feedback.</p>
<p>Here's the lowdown on my situation:</p>
<p><strong>Income:</strong></p>
<ul>
<li>First 6 months: $109k salary + $15k sign-on bonus</li>
<li>After 6 months: $127k salary</li>
</ul>
<p><strong>Debt:</strong> None</p>
<p><strong>Retirement and Investments:</strong></p>
<ul>
<li>2024 Roth IRA: Already maxed out</li>
<li>Brokerage account: Sitting at ~$4,700 in ETFs and Mutual Funds (Currently tossing in $50/week)</li>
</ul>
<p><strong>401(k) Details:</strong></p>
<p>I'm a bit fuzzy on this part.</p>
<p>The company kicks in 3% of my salary right off the bat (Basic Non-Elective Contribution)</p>
<ul>
<li>Plus, they match my contributions:
<ul>
<li>100% match on my first 3% of contributions</li>
<li>50% match on the next 3% of contributions</li>
</ul></li>
<li>So, if I chime in with 6% of my salary, the company chips in a total of 7.5%</li>
<li>That means 13.5% of my salary heads into my 401(k) when I hit that 6% mark</li>
<li>To max out the company contribution, gotta drop in at least 6% of my salary, right?</li>
</ul>
<p><strong>Health Savings Account (HSA):</strong> </p>
<p>The company's got an HSA setup. Don't know much about it, but I hear it's a triple-tax advantage deal. Gonna look into it for sure.</p>
<p><strong>Stock Purchase Plan:</strong></p>
<p>I've never dipped my toe in this pool; any thoughts on whether I should dive in?</p>
<ul>
<li>Okay to put in up to 15% of my base salary</li>
<li>Company tosses in a partial match on my contributions (I think it's 15%)</li>
<li>They deduct contributions from each paycheck to buy company stock at month-end</li>
<li>No fee for stock purchases, but a $4.95 fee per trade when selling</li>
</ul>
<p><strong>Monthly Expenses:</strong></p>
<ul>
<li>Rent: $2,074</li>
<li>Utilities (electricity + internet): TBD</li>
<li>Groceries (single dude): TBD</li>
<li>Spotify: $3.33</li>
<li>Phone Bill + Car Insurance: $110</li>
<li>Parking: $100</li>
<li>Gym: $15</li>
</ul>
<p>I'm pondering:</p>
<ol>
<li>Should I max out my 401(k) beyond the match?</li>
<li>What % should I toss into the stock purchase plan, with that partial match in play?</li>
<li>Stick with, up, or pause my $50/week brokerage account investment?</li>
<li>Any other saving or investing tricks up my sleeve?</li>
</ol>
<p>I feel super lucky and fortunate to be where I am now, especially since money has always been a worry for me. I'm eager to take your advice and run with it :)</p>
<p>Thanks a bunch in advance! I'm here to answer any other Qs if you need 'em!!</p>Farewell from "Money-Smart Newbie"
Response from THE MONEY MINDER:
Hello There,
Congratulations on landing your first "real" job! It’s fantastic that you’re already thinking about saving, investing, and planning for the future. It can indeed be overwhelming at first, but with some careful consideration and strategic planning, you can set yourself up for financial success.
Based on the details you’ve shared, here are some suggestions:
- 401(k) Contributions: It’s great that your company offers a matching contribution. Contributing at least 6% to maximize the company match is a smart move as it effectively increases your savings rate. Beyond that, consider if you have additional financial goals or if there are other investment avenues you wish to explore.
- Stock Purchase Plan: Given the partial match your company offers, contributing to the stock purchase plan can be beneficial. Consider how much you can comfortably contribute while still maintaining a healthy cash flow for your living expenses and other financial goals.
- Brokerage Account: Continuing to invest $50/week in your brokerage account is a good habit. You’re already building a solid foundation for your investments, and consistent contributions can help your money grow over time. If you find you have extra funds available, you could consider increasing your contributions.
- Health Savings Account (HSA): Researching the HSA and understanding its benefits is a wise move. As you mentioned, it offers triple-tax advantages, making it a valuable tool for saving for healthcare expenses both now and in the future.
- Other Savings and Investment Strategies: In addition to your retirement accounts and brokerage investments, consider building an emergency fund to cover unexpected expenses. You might also explore opportunities to diversify your investments, such as real estate or additional retirement savings options.
Remember, financial planning is a journey, and it’s essential to regularly review and adjust your strategies as your circumstances evolve. Seek advice from financial professionals if needed, and continue to educate yourself on different investment options.
All the best from THE MONEY MINDER as you navigate this exciting new chapter in your financial life!
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