Hi Money Minder,
So, earlier this year, I finally hit a net worth of $0. Weird, right? But it’s a big deal for me! Let me take you on a journey through my financial ups and downs over the past decade. Maybe you’ll find it relatable or interesting.
Here’s a simple breakdown of my financial journey (may look wonky on mobile):
- Assets only include 403b and IRAs (no car value or general savings)
- Debt consists of car loan and student loans
- You might notice I haven’t been paying much toward my student loans – I’m aiming for Public Service Loan Forgiveness, so I’m keeping my monthly payments low
I’m 31 now and I’ve always been rubbish with money…
- Loaded with student loans after college, piled on more for grad school
- Bought a brand-new car right away (at least with 0% interest)
- Blowing every buck I made in my 20s
- Didn’t start contributing to retirement accounts until 27
Last year, I had a heart-to-heart about money and retirement with a savvy friend who could probably retire by 50. We talked about stuff like 401k, 403b, IRA, and the different types of accounts, plus stocks, index funds, and more. It was eye-opening, especially since lots of us millennials stumble into adulthood clueless about finances.
Although I screwed up big time in my 20s, I now feel like I have a second chance to make things right. After that conversation in 2023:
- Bumped up my 403b contributions to the max at $22.5k for the rest of 2023
- Hit the cap on my IRA at $6.5k
- Plan to max out my 403b and IRA every year, going for low-cost index funds
- Comfortable stashing cash outside retirement accounts (like for hobbies or a house down payment), and gearing up to invest through my brokerage account
Now I’m spreading the knowledge to friends and coworkers, but a lot of them seem more interested in blowing cash on “experiences” or always needing the latest gadgets or a never-ending car loan.
Any questions for me? And I’m all ears for any advice you’ve got!
Farewell, Financial Fixer-Upper
Response from THE MONEY MINDER:
Hello There,
Congratulations on reaching this milestone in your financial journey! It’s admirable that you are reflecting on your past mistakes and are committed to making positive changes moving forward. It’s never too late to start over and make better financial decisions.
It’s great that you took the initiative to educate yourself on various retirement accounts and investment options. By maximizing your contributions to your 403b and IRA, you are setting yourself up for a more secure financial future. Choosing low-cost index funds is a smart strategy that can help you grow your wealth over time.
Sharing your knowledge with friends and colleagues is commendable, even if they may not be as interested in financial planning at the moment. Leading by example and offering advice when asked can still make a lasting impact.
As you continue on this path, remember to prioritize saving for emergencies, personal goals (like hobbies or a house down payment), and investing through your brokerage account. It’s essential to have a well-rounded approach to financial planning that considers both short-term needs and long-term goals.
If you have any questions or need further advice, feel free to reach out. Keep up the great work and stay focused on your financial growth. Best of luck on your journey to financial stability!
Farewell from THE MONEY MINDER.
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