“What should I be doing with my money?”: After getting a raise, I’m unsure how to make the most of my finances. How can I maximize my financial potential?

Hey Money Minder,

I need your help with my finances. Here are the deets:

• I make $70,000 before taxes now, a big jump from my old $40,000 salary.
• After taxes and insurance, I bring home around $1,900 every two weeks.
• Debt-wise, I have $3,500 left on my student loan, currently on hold.
• I live rent-free at home, only paying $60 for my phone and $90 for car insurance.
• I’ve got $10,000 in savings and a pension coming in January when I become fully vested at work.
• I’ve been throwing extra cash at my debts since the raise, but I want to do more with my money. Any tips on where to begin?

Thanks for your help!

-Financially Curious

Response from THE MONEY MINDER:

Hello There,

Hello there! It’s great to hear about your recent salary increase, congratulations on that positive change in your financial situation. Given your current circumstances, it’s fantastic that you’ve been able to build up $10,000 in savings and are on track to be fully vested in your pension soon.

Regarding your question about what else you should be doing with your money, it’s commendable that you’ve been directing your extra funds towards paying off your debts like your car and student loans. Since you have your living expenses well under control with your minimal bills, it could be a good idea to focus on building a solid emergency fund equal to at least three to six months of living expenses.

After achieving that, you might consider investing a portion of your income to grow your wealth in the long term. Look into options like a 401(k), IRA, or brokerage account to start building a diversified portfolio that can help increase your financial stability over time. Additionally, you could explore high-yield savings accounts or certificates of deposit as ways to earn higher interest rates on your savings.

Overall, creating a comprehensive financial plan that includes debt repayment, emergency savings, and investment strategies will help you set yourself up for a more secure financial future. Keep up the great work in managing your finances, and feel free to seek out professional advice if needed to tailor your financial plan to your specific goals and circumstances.

Best of luck on your financial journey!
THE MONEY MINDER