I’ve been out of grad school for a bit over a year now with a Master’s in Public Health. I’m about to hit 26 and trying to get a grip on my student loans and overall financial situation.
I’ve got a hefty $78,725.00 (including interest) in federal loans from undergrad and grad school. Currently on the SAVE plan with $0 monthly payments, waiting on the Public Service Loan Forgiveness process.
My job at a non-profit in NYC brings in $62,400 annually, but my take-home after everything is $3,308.28 a month. I’ve stashed away around $60,000 from working during school, but I’ve been too scared to touch it with this debt hanging over me.
My parents weren’t the best with money, so I’m feeling a bit lost when it comes to financial security. I’ve done some reading and realized a HYSA could be a good move. Thinking of SoFi or Marcus based on reviews and APY. Any thoughts?
Started a Roth IRA with a modest $2,000 contribution and planning to deposit $500 monthly into ETFs, index funds, and mutual funds like VOO, QQQM, SWPPX. My 403b has about $3,100 vested, with my employer kicking in $2,100, all in the Target Retirement 2065 Fund for now. Heard diversifying could be smart, but sticking with a managed account for now.
Should I focus on beefing up my savings in the HYSA since my monthly loan payments are on pause? And how do I choose which other stocks to invest in for my 403b beyond the target retirement fund?
Any tips or advice you could share would be amazing! Thanks a bunch!
Farewell from Seeking Advice,
Response from THE MONEY MINDER:
Hello There,
Hi there,
Firstly, congratulations on completing your Master’s in Public Health and being proactive in seeking guidance on managing your student loans and achieving financial security. It’s great to see you taking steps to address your financial situation.
I understand the weight of student loan debt can feel overwhelming, but I commend you for enrolling in the SAVE plan and pursuing Public Service Loan Forgiveness. Given your current circumstances with a manageable monthly payment and stable employment, it may be beneficial to focus on building your financial foundation while continuing to make progress on your student loans.
Regarding your savings, having ~$60,000 saved up is impressive, and opening a High-Yield Savings Account (HYSA) like SoFi or Marcus is a wise move. By keeping your emergency fund and short-term savings in a HYSA, you can earn a higher interest rate while still having easy access to your funds.
Your approach to investing in a Roth IRA and 403b is commendable. Starting with ETFs, index funds, and mutual funds like VOO, QQQM, and SWPPX diversifies your portfolio and sets you on a path towards long-term wealth-building. It’s also good to contribute regularly to your Roth IRA to benefit from compound interest over time.
In terms of the 403b, the Target Retirement Fund 2065 is a good choice for a hands-off approach, but you can consider diversifying by looking into other funds that align with your risk tolerance, goals, and investment timeline. Consulting with a financial advisor can help provide tailored advice based on your individual circumstances.
As for whether to focus on growing savings in your HYSA or investing more in your retirement accounts, it’s a balance between building your emergency fund, paying off debt, and investing for the future. Given that your monthly loan payments are manageable now, you could consider a hybrid approach where you continue to save in the HYSA while also increasing contributions to your retirement accounts.
Overall, taking a holistic approach to managing your finances, including budgeting, saving, investing, and paying off debt, will set you on a path towards financial stability and security. Remember, it’s a journey, and small steps taken consistently can lead to significant progress over time.
All the best from THE MONEY MINDER. Keep up the great work!
