Hi Money Minder,
Yo, so I’ve got this thing where I overthink my money situation all the time. I’ve got some luck on my side – living with the ‘rents, help with college loans, and a nice income for a 24-year-old. But man, I keep changing my mind on where to put my cash and it’s driving me nuts. Here’s the deets:
- 24-year-old dude
- $85k salary + $900 from a side hustle
- $4.5k in student loans (paying $110 every month from HYSA interest)
- About $30k in investments (maxed out Roth for the first time this year!)
- $37k in HYSA (20k for emergencies, 12k for moving out in 2024, 2k for taxes, and 3k for student loan repay)
I can save about 2 grand from my paycheck each month without even thinking about it. So my questions are:
Q1: Should I just knock out those student loans? The interest covers the monthly payment, but the balance bugs me. Is it silly to pay them off if the interest is taking care of it?
Q2: Do I need to loosen up and spend more? Sometimes I feel like I’m hoarding cash and not living it up enough, but that feeling changes all the time!
Q3: Should I go all-in on investing and cut back on saving?
I’m so torn on what to do, can you help a bro out?
Later,
Money Maverick
Response from THE MONEY MINDER:
"Hello There,"
Hello there! First of all, congratulations on being proactive about your finances at such a young age. It’s great to see that you are making smart choices with your money. I understand that managing finances can be overwhelming at times, especially when you have various goals and priorities in mind.
Based on the breakdown you provided, it seems like you are in a good financial position with a solid income, investments, and savings. Regarding your student loans, it’s impressive that the interest from your High-Yield Savings Account (HYSA) covers the payments. However, if the amount left bothers you and you have the means to pay it off without affecting your overall financial stability, it might be a good idea to clear that debt and be debt-free sooner rather than later.
As for your question about spending more, it’s essential to strike a balance between saving for the future and enjoying the present. If you feel like you are saving too much and it affects your quality of life, you could consider allocating some funds for things that bring you joy without compromising your financial goals.
Regarding investing the rest of your money, diversifying your investments is key to building wealth over time. It might be worthwhile to consult with a financial advisor to determine the best investment strategy based on your risk tolerance, financial goals, and time horizon.
In conclusion, establishing clear financial goals and sticking to a plan that aligns with your values and priorities is crucial. It’s okay to reevaluate and adjust your goals as needed, but try to avoid frequent changes that could lead to indecision and inertia. All the best from THE MONEY MINDER in your financial journey!
