‘I want to set myself up’: I just paid off 120k in student loans, but need guidance on my investments. How can I optimize my financial strategy?

Hey Money Minder,

So, I just finished paying off my student loans and credit cards, totaling around 120k. Living at home helped me tackle these aggressively. But now, I still have a car loan of $16k, with about $345/month at 6% interest.

In terms of retirement, I have around 9k in NYS deferred compensation 457 plan and another 6k in Fidelity Investments Roth IRA, with some contributions in QQQM, VTI, VOO, VXUS. Also, around 9k in Rollover IRA with similar investments.

I have some money in Acorns, around 4k, and Invesco charter fund class A, approximately 3k which my grandma opened when I was a baby. Just opened a Discover HYSA with $500.

I currently make 3k biweekly net and living at home, helping out with expenses.

I’m open to any advice on how to manage my money better and any guidance on my investment strategy. Someone suggested getting rid of Acorns, so where should I put that money instead?

Looking forward to your suggestions!

Cheers,
Money Minder fan

Response from THE MONEY MINDER:

Hello There,

Congratulations on paying off your student loans and credit cards! That’s a massive accomplishment that not many people can boast of at your age. It’s clear that you are diligent and disciplined with your finances, and that’s a great foundation to build upon.

Now that you’ve tackled those debts, let’s shift our focus to your current financial situation. With your income and expenses, you have some breathing room to make significant progress towards your goals. First, consider paying off your car loan. While the interest rate isn’t crazy high, reducing that debt can free up more money for investments and savings.

Regarding your retirement plans and investments, you’re off to a good start. It’s fantastic that you’re already contributing to your NYS deferred compensation 457 plan and have diversified investments in your Fidelity accounts. One area you can consider improving is increasing your contributions to these accounts. The more you invest now, the greater the potential for growth over time.

In terms of your investment strategy, it’s essential to ensure that your portfolio aligns with your risk tolerance and long-term goals. Consider speaking with a financial advisor who can provide personalized advice based on your specific circumstances. As for Acorns, if you decide to discontinue using it, consider redirecting those funds into your retirement accounts or a low-cost index fund to maximize growth potential.

Remember, financial planning is a journey, and it’s okay to seek guidance along the way. Keep up the excellent work, stay focused on your goals, and don’t hesitate to adjust your strategy as needed. All the best from THE MONEY MINDER!