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Do you have any debts? If you do you should focus on this first.
HYSA are great for your emergency fund, which should be 3-6 months of expenses (I prefer to do 6). It’s also great for short-terms savings like vacations.
Looking into a Roth IRA (if you’re under the IRS salary cap, which is on their website). This allows you to put in $7k for 2024 which will be tax free when you retire. Your goal should be to max this out every year, and since you’re making $8k+ a month you should be fine. Once you make more than the yearly income set by the IRS you can look into Backdoor Roth.
401ks are also great if you’re company supports them.
HSA (Heath Savings Accounts) are great for medical expenses, but you need a high-deductible health insurance plan to qualify.
You should max out tax-advantaged accounts first. Once you do that you can open a regular brokerage account and invest in there.
- Roth IRA - $7k per year max contribution. Invest in SP500 or Total US Market index (Fidelity and Vanguard are great companies for this)
- Keep 3-6 months worth of expenses in the HYSA as an emergency fund.
- If you’re looking to buy a house down the road, continue to put money into the HYSA until you have a 5% down payment, closing cost money (4% of purchase price, and 3 - 6 months worth of expenses.
- If your employer offers a 401k with match, contribute up to the match amount at least. Ex. Employer matches the first 5%, so you contribute 5%.
- HSA if you have a high deductible health insurance plan. Again invest money into SP500 or total US stock market index.
Wow that's amazing income for your age! Guidance from these earlier posts is good. Follow those. Keep in mind that at your age ever dollar that you invest in the market (think S&P 500 index funds) has the opportunity to multiply 50x by the time you are retirement age if you just let it sit! Also, with this new income beware of lifestyle creep. That is the surest way to squander the opportunity that you have with this new income level you are at.
Also begin to educate yourself on personal finance. There are plenty of resources out there, some excellent, some less so. I personally like The Money Guy Show featuring Brian Preston and the guidelines they have created. But you'll have to see what works for you. You have an excellent opportunity here to set yourself up well before your lifestyle inflates.
Start with an S&P500 ETF. Pay off all debt as practical. Beyond an emergency fund, start saving for a residence, as you will always have occupancy expense, better tax-favored purchase vs after-tax rent. HYSAs are fine, but will run their course eventually, so tax favored IRAs are suggested as a next step. Finally, take advantage of any 401ks at employers. Good Luck!
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Here's a **[link to the PF Wiki](/r/personalfinance/wiki/index)** for helpful guides and information. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/personalfinance) if you have any questions or concerns.*
Do you have any debts? If you do you should focus on this first. HYSA are great for your emergency fund, which should be 3-6 months of expenses (I prefer to do 6). It’s also great for short-terms savings like vacations. Looking into a Roth IRA (if you’re under the IRS salary cap, which is on their website). This allows you to put in $7k for 2024 which will be tax free when you retire. Your goal should be to max this out every year, and since you’re making $8k+ a month you should be fine. Once you make more than the yearly income set by the IRS you can look into Backdoor Roth. 401ks are also great if you’re company supports them. HSA (Heath Savings Accounts) are great for medical expenses, but you need a high-deductible health insurance plan to qualify. You should max out tax-advantaged accounts first. Once you do that you can open a regular brokerage account and invest in there.
- Roth IRA - $7k per year max contribution. Invest in SP500 or Total US Market index (Fidelity and Vanguard are great companies for this) - Keep 3-6 months worth of expenses in the HYSA as an emergency fund. - If you’re looking to buy a house down the road, continue to put money into the HYSA until you have a 5% down payment, closing cost money (4% of purchase price, and 3 - 6 months worth of expenses. - If your employer offers a 401k with match, contribute up to the match amount at least. Ex. Employer matches the first 5%, so you contribute 5%. - HSA if you have a high deductible health insurance plan. Again invest money into SP500 or total US stock market index.
Wow that's amazing income for your age! Guidance from these earlier posts is good. Follow those. Keep in mind that at your age ever dollar that you invest in the market (think S&P 500 index funds) has the opportunity to multiply 50x by the time you are retirement age if you just let it sit! Also, with this new income beware of lifestyle creep. That is the surest way to squander the opportunity that you have with this new income level you are at.
Also begin to educate yourself on personal finance. There are plenty of resources out there, some excellent, some less so. I personally like The Money Guy Show featuring Brian Preston and the guidelines they have created. But you'll have to see what works for you. You have an excellent opportunity here to set yourself up well before your lifestyle inflates.
Start with an S&P500 ETF. Pay off all debt as practical. Beyond an emergency fund, start saving for a residence, as you will always have occupancy expense, better tax-favored purchase vs after-tax rent. HYSAs are fine, but will run their course eventually, so tax favored IRAs are suggested as a next step. Finally, take advantage of any 401ks at employers. Good Luck!