Hey Money Minder,
I’m Cookin’ Up Cash and I need your help!
Let me break it down for you – I’m a 25-year-old dude in a not-so-expensive area, rockin’ an advanced degree since 2023. My endgame is to have a sweet 75k in all my accounts by the end of 2025, yeah! Check out my cash flow:
Income:
- Day Job: $6,800/month ($110k/yr post-tax)
- Side Gig (rental property): $400/month
Expenses:
- Rent: $1,100/month
- Car: $250/month ($4k left)
- Insurance: $160/month
- Subs + bills: About $100/month
- Student loan: $885/month ($65k left)
Savings:
- 401k: $5,300
- HYSA: $2,500
- Rental Biz: $830
- Brokerage: $90 (just dabbling with Nvidia)
Last year, I raked in about 115k, but most went to student debts and that rental pad (20k downpayment). I splurged on dinners, trips, and treated myself ’cause why not? I got a fat chunk stolen due to fraud, and the rent will spike from now on. Gotta hustle smart, you know?
Here’s the hustle plan: stash $41,600 in HYSA and throw $17,600 in the 401k ’til 2025. Plus, parking $6,400 from the rental each month. That’s a total of $74,320, just shy of my 75k dream, but whatever’s left in checking should do the trick, right?
Once I hit that magic 75k, time to drop $10-15k on debts, then hunt for another cash cow rental with $20-30k. But I don’t wanna dip below 30k again, ever.
Thinking of a Roth IRA or some juicy index funds instead of the HYSA grind. Should I keep smashing debt chunks or trust my spending habits by 2025? Help me out, Money Minder!
Catch you on the flip side,
Cookin’ Up Cash
Response from THE MONEY MINDER:
Hello There,
Welcome to the sub, and thank you for sharing your detailed financial situation with us. It’s clear that you have ambitious financial goals and a strategic mindset when it comes to saving, investing, and building passive income streams. Firstly, congratulations on taking steps towards financial stability, such as contributing to your 401k, investing in a rental property, and actively saving in a HYSA.
Given your financial overview, it appears that you have a solid foundation for achieving your goal of having 75k across all your accounts by the end of 2025. Your approach to depositing into your HYSA and maximizing your employer’s 401k match is commendable. However, there are a few areas where you can further optimize your strategy.
One practical suggestion would be to consider redirecting a portion of your savings towards aggressively paying down your student debt. By reducing this debt burden sooner rather than later, you can free up more funds in the future for additional investments or savings. This approach can also help you save on interest payments and potentially improve your overall financial health.
Additionally, exploring the option of opening a Roth IRA or investing in well-performing index funds could be beneficial in diversifying your investment portfolio and potentially achieving higher returns over the long term. It’s essential to strike a balance between saving, investing, and debt repayment to ensure a comprehensive financial strategy.
Lastly, maintaining discipline in managing your day-to-day expenses, as you have already identified, is crucial for staying on track towards your financial goals. Avoiding unnecessary purchases, limiting eating out, and prioritizing saving and debt repayment will help you build a strong financial foundation for the future.
Remember, financial planning is a journey, and it’s essential to adapt your strategy as needed based on your circumstances and goals. By implementing practical steps and staying focused on your objectives, you are well on your way to achieving financial success. All the best from THE MONEY MINDER in your financial endeavors!
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