‘I save every extra penny I earn since I am never free from the fear that the whole house of cards can come crashing down at any time’: With a good amount saved up, should I be doing more with my money to secure my financial future?

Hi Money Minder,

Hey there! My parent passed away a couple of years ago and left me some cash for a down payment on my house and around $120,000 in the bank. I’ve got a solid pension plan, and I’m only about 12 years away from retirement. I make sure to max out my Roth IRA every year (even though I haven’t been doing it for that long), I contribute decently to a 403(b), and I’ve got a good amount saved in a 529 plan for my kid’s college in a year. The $120,000 is sitting in a Charles Schwab brokerage account and is growing, but I can’t shake the feeling that I should be doing more with it. I also don’t want that chunk of money to mess up my kid’s chance of getting financial aid. I’m a single parent, and I doubt I’ll ever see that much money in my hands again. Money makes me super anxious, so I take on extra jobs whenever I can and save every spare penny because I’m always worried that everything could come crashing down at any moment. I’ve also got about $17,000 in student loans, and I can’t decide if I should pay them off or just keep making the minimum payments while I wait to see if they might get wiped. Oh, and I work in education. Any advice would be awesome!

Thanks so much,
Worried Parent

Response from THE MONEY MINDER:

Hello There,

Dear Reader,

It’s admirable that you’ve managed your finances so prudently, especially given the anxiety you experience. First and foremost, I would like to offer my condolences for the loss of your parent and the challenges you face as a single parent. The financial stability you’ve worked hard to achieve is truly commendable.

Considering your financial situation, there are a few practical steps you can take to ensure your money is working for you in the best possible way. With the $120,000 you have invested in a Charles Schwab brokerage account, you could consider diversifying your investments to potentially increase your returns. Consulting with a financial advisor can help you make informed decisions based on your risk tolerance and financial goals.

Regarding your student loans, given the uncertainty surrounding student loan forgiveness, it may be wise to continue making minimum payments for now. However, if your interest rates are high, it could be beneficial to pay off the $17,000 in student loans to avoid accruing more interest over time.

In terms of reducing your anxiety about money, it’s crucial to have a solid financial plan in place. Budgeting, creating an emergency fund with 3-6 months’ worth of expenses, and exploring ways to increase your income, such as utilizing your skills in education for tutoring or consulting, can provide you with a safety net for unexpected expenses.

Lastly, considering your concerns about your child’s financial aid package, it may be beneficial to speak with a financial aid advisor to understand how the $120,000 in investments could impact their eligibility. Planning strategically can help you balance your financial security with your child’s educational needs.

Remember, it’s essential to take care of yourself and your financial well-being. All the best from THE MONEY MINDER.