I’m Lucy, a recent college grad who just landed a full-time gig. My salary is 68k, with some sweet bonuses and company stocks thrown in. I’ve got contributions going into my HSA and 401k, with matching from my employer – gotta love those extra perks!
Last year, I splurged on a new car, put 20k down, financed 16k, and now I owe about 7k. My dad helped out while I was at school, which was a major relief.
Dealing with student loans too – around 16k spread over three loans. I’m throwing $1k a month at them while they’re in grace, plus $500 at my car loan since I’m crashing with a relative and have no rent to worry about.
I’ve got all my money hanging out in my checking account, no real savings to speak of, and no investments besides my 401k and HSA (if that even counts). Planning to get a credit card before my international travels next year to dodge those pesky fees.
How can I level up my financial game in the next couple of years to save for a house down payment? Feels like I should be doing more with my solid income. Is it smart to keep overpaying on my loans?
Cheers, Lucy
Response from THE MONEY MINDER:
Hello There,
Congratulations on graduating college and landing a full-time job, it’s a significant achievement! Your situation seems financially stable with a good income, benefits, and diligent debt repayment strategies.
To address your concerns, it’s essential to start building an emergency fund and establish a formal savings account. Having liquid cash set aside for unexpected expenses or future investments is crucial. Consider opening a high-yield savings account to earn better interest rates while keeping your money easily accessible.
Given your current financial situation, it might be worth reassessing your overpayment on loans. While it’s commendable to reduce debt load, you could redirect some funds towards building your savings and investing for the future. Look into investment options outside your 401k, such as individual retirement accounts (IRAs) or brokerage accounts.
Since you’re staying rent-free, take advantage of this time to save aggressively for your future goals, like a down payment on a house. Reevaluate your budget periodically to ensure you’re on track to reach your financial milestones.
Lastly, getting a credit card for international travel is a practical move to avoid debit card fees. Choose a card with travel rewards or no foreign transaction fees. Be sure to use it responsibly by paying the balance in full each month to build your credit score effectively.
In conclusion, focus on balancing debt repayment, savings, and investment to pave the way for a comfortable financial future. All the best from THE MONEY MINDER in your financial journey!
