‘Recently turned 18, is there anymore I can do financially?’: Feeling lost financially after turning 18 and unsure of what steps to take next. How can I make the most of my situation?

Hi Money Minder,

So, I recently turned 18 and just got myself a credit card. I used to work as a tutor for about a year, but that ended in July. Now, I’m gearing up to start college at an ivy league school with a sweet full ride scholarship. I’ve got a refund of $1700 this semester, which I plan on using for flights and saving the rest.

But here’s the thing, I feel like I could be doing more money-wise, but I’m not sure what that “more” is. I’ve got a credit score of 750+ thanks to my mom and I want to open a high-yield savings account soon. Right now, I’ve got around $7000 in my checking account and I plan on putting 60% of that into the HSA. I couldn’t contribute to a 401k before because I was unemployed, but now things might change. I’ve been looking into a Roth IRA and an Index fund (VOO 500), but not sure if it’s the right move without a steady income.

I do plan on working at the library in college, depending on my course load, so would a Roth IRA or Index fund be a good choice for me? I’m not really a big spender, just planning on food, clothes, and maybe a summer trip. Given all this, do you think there’s more I could be doing?

Oh, and should I contribute to a 401k if it’s offered through my on-campus job?

Farewell,

Thrifty College Student

Response from THE MONEY MINDER:
Hello There,

Congratulations on getting into an Ivy League institution with a full ride package, and kudos on taking steps to manage your finances at such a young age. It’s impressive that you have a solid credit score and are looking into savings options like a high-yield savings account.

Given your current situation of not having income at the moment but planning to work in college, it might be wise to hold off on investing in a Roth IRA or Index fund until you have a steady income stream. While it’s great to start thinking about your financial future, building an emergency fund with the money from your refund or saving up for future expenses like your summer trip could be a more immediate priority.

As for contributing to a 401k through your on-campus job, it’s worth considering if your employer offers a match on contributions. If they do, contributing even a small amount can be beneficial in the long run.

In summary, focus on building up your savings, covering your immediate needs, and creating a solid financial foundation before delving into more complex investments. Keep up the good work in managing your money wisely!

Farewell from THE MONEY MINDER.