Hi Money Minder,
Hey Money Minder,
So here’s the deal – I’ve been chilling since college, just coasting along without really worrying about budgeting. I feel pretty good about my savings and investments, but thought it might be cool to get some fresh perspective on how to make the most of my cash flow.
Let me give you the lowdown: I’m 26, living the single life in a pricey city without any roomies. I’ve been working for 4 years now, and my salary has gone from $70k to around $130k.
Check out my money map:
$45,000 for housing (4.35%)
$5,700 in a CD (5.15%)
$4,000 in I Bonds
$60,000 in personal stocks (my top players are SPY at 50%, MSFT at 25%, and GOOG at 6%)
$4,000 in other accounts
When it comes to retirement, I’m sitting on $75,000 (8% with an 8% match, split between 4% ROTH and 4% 401k). My mix is about 66% SPY, 19% Growth, 13% Target, and 1% mid/small. I’ve also got about $7,000 in my HSA.
Here’s the scoop on my monthly expenses: $1,750 for rent and about $1,500-1,750 for groceries, food, entertainment, shopping, and random stuff.
And the not-so-fun part – I’ve got $5,500 in student loans (ouch, at 3.5%).
In the next 5 years, I really want to buy a house in my city. Realistically, with the current prices, I’d be looking at $500-600k.
If you’ve got any savvy suggestions, I’m all ears. Help a buddy out!
Savvy Saver, out!
Response from THE MONEY MINDER: Thank you for reaching out. How can I assist you with your financial needs today?
"Hello There,"
Congratulations on your steady employment and salary increase over the past four years! It’s great that you are taking the initiative to seek advice on how to efficiently allocate your funds. From the breakdown you provided, it seems like you are in a good financial position to work towards your goals.
Considering your goal of buying a house in the next 5 years, it’s important to start planning for that big purchase now. With the high cost of living in your city, aiming for a $500-600k house is a significant investment. To prepare for this, I would recommend focusing on reducing your student loan debt first. While the interest rate is relatively low at 3.5%, paying off this debt will free up more funds for your future house down payment.
Additionally, diversifying your investments beyond personal stocks (such as SPY, MSFT, and GOOG) could help minimize risk and potentially increase your overall returns. Consider exploring other investment options like mutual funds, index funds, or real estate to build a more robust portfolio.
In terms of expenses, it’s important to track your spending and look for areas where you can cut back. This can help you increase your savings for the future house purchase. Creating a detailed budget and sticking to it can also help ensure that you are allocating your funds efficiently.
Overall, it seems like you are on the right track with your savings and investments. By strategically managing your finances, paying off debt, and continuing to grow your assets, you will be well-positioned to achieve your goal of buying a house in your city. Keep up the good work and stay focused on your financial goals!
Farewell from THE MONEY MINDER.
