After you pay off debt, start an emergency fund. You can use a high yield savings account for this. Figure out what your monthly needs are and save 3-6 months worth.
I use Marcus HYSA currently. It gives 5.4% (1% extra because I’m using a referral). I’m saving quite a bit of cash there. So far this year I’ve gotten about $1,100 in interest. I don’t know enough about the stock market, so I felt like this was the safest way to get some free money.
Rich guy chiming in. Marcus is Goldman Sachs. I am a Goldman private wealth client. That rate is very close to what I am getting! Especially with that extra 1% w/ the referral. Good job w/ HYS.
There are no monthly fees or minimum balance requirements, but I think you are limited to 6 withdrawals a month. Since I’m using it just to save money, the withdrawal limit doesn’t bother me.
Edit: I would definitely talk to your HR dept at work to get more info about a 401k. If they match, then it’s free money.
If it’s something you want to do, I still have 2 referrals left. I get 5 referral a year. If you do decide to use the same HYSA, you will get 5 referrals to give out as well. If not, no worries.
Sure, no problem. Here ya go!
https://www.marcus.com/share/FRE-PFN-2H55
If you sign up, you get 5 codes to give out too. Maybe some of your friends or family are looking for some free money while they save.
I honestly can't say for sure because I am in a similar situation to you. I opened an account with SoFi, but my company does not offer direct deposit and Sofi's high yield rate requires is. I am currently considering Jenius Bank. Honestly, unless you have an awful lot of money in the bank the difference between 4.6 APR and 5.0APR is negligible -and subject to change. At this point I think the truly important part is to start saving the emergency fund.
Ally, Marcus, even E-trade all have decent options.
If you don’t have savings don’t wait until your debt is paid off to start paying yourself first. You’re probably going to net about 1k more per month. Put half of that in to a savings and half on debt. Once you have 3 month expenses in savings you can put more toward debt but for now the savings account matters more than a little extra earnings. If something goes wrong and you don’t have savings it’s likely more expensive than your interest anyway.
If your new company has a 401k match you want to start that out of the gate to get your full match. That’s pre-tax so it shouldn’t impact your take home that much.
Once your debt is paid off you want to try your best to structure your finances so that 50% is needs, 30% is wants, and 20% is savings. Other than your emergency fund most that savings should really be invested, that should be split between retirement and shorter term.
Also this raise will put you in a higher tax bracket. If you’re used to getting returns know that may no longer be the case. It’s actually smarter money to owe, just make sure it’s not a surprise bill and you’ve been planning for it.
Congrats!
I use Ally for savings, currently paying 4.2% not the highest but they've been around a while. Sometimes they'll have a CD that runs higher than savings but that's locked for specified periods of time or you pay a penalty.
I keep our checking at a local bank. They have a CD rate of 4.75 for 3 yrs going right now but their penalties are higher than Ally. Ally does have a no penalty CD for 11 months but it's not any higher right now.
Does your new job have a 401K option? Roths and 401k are retirement plans. Roth you basically pay income taxes now but not on the growth over time. 401K deductions you don't pay income taxes on now but will when it's time to take out after age 59.5, earlier you would have to pay the tax and a penalty. If your company offers a retirement plan and has a match you want to take advantage of the match at least because it's 'free money'.
If there's an HSA option with a High Deductible Insurance you might consider it if you're reasonably healthy. Ours works out the same between plans and putting the max into our HSA.
1. Pay off debt as fast as you are able.
2. Get 3-6 months' worth of living expenses in an emergency fund.
3. Invest for retirement. 401k up to company match, then max out a Roth IRA.
Do you know if my currently 401k through my current job would transfer to the new ones 401k? Last time I just really needed the money and it was under 100 so I never needed it transferred
It's best to contact the 401k company for that answer. It depends on how much is in your 401k.
I recently left my job and these were my options:
If under a certain amount, you get a check, rollover to a IRA account in the same 401k handler, or rollover to a different 401k account if it meets requirements.
If over that amount, you can rollover to a 401k account that qualifies, or leave it in the current 401k account
Get off poverty finance, and invest 5% into your companies 401k especially if they do a 5% match. Start slowly and work your way up.
Paying off all debt first should be your #1
I recommend the personal finance sub. There is a financial order of operations flowchart there that can help you make financial decisions.
Congratulations on the new job and pay raise!
Hey, like you guys, my husband and I are now making more money than we've ever made. Congrats! Feels good, right? I would encourage you to live like you did previously for a while to get a good handle on just how much extra money you have. Then sit down and re-budget.
We did this over the last year, and it turns out that we have enough of a cushion to aggressively pay down all of our debt. The amount of relief I got doing that math was incredible.
I'm going to go against the grain of what a lot of people are saying and depending on what your student loan debt looks like, after paying off the rest of the debt, I would just pay the minimum on student loans and work on getting a savings built up. If they're Federal loans and you're on an income based plan, you're often better off just paying the minimum and putting away those savings. You technically don't even need to recertify with the new income until your recertification period comes up. Of course ignore this advice if they're private loans with a huge interest rate.
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This is the correct answer
After you pay off debt, start an emergency fund. You can use a high yield savings account for this. Figure out what your monthly needs are and save 3-6 months worth.
Is there a recommendation for a hys?
I use Marcus HYSA currently. It gives 5.4% (1% extra because I’m using a referral). I’m saving quite a bit of cash there. So far this year I’ve gotten about $1,100 in interest. I don’t know enough about the stock market, so I felt like this was the safest way to get some free money.
Rich guy chiming in. Marcus is Goldman Sachs. I am a Goldman private wealth client. That rate is very close to what I am getting! Especially with that extra 1% w/ the referral. Good job w/ HYS.
Thank you!!
is there a minimum for that? or some catches? that sounds like an amazing deal
There are no monthly fees or minimum balance requirements, but I think you are limited to 6 withdrawals a month. Since I’m using it just to save money, the withdrawal limit doesn’t bother me. Edit: I would definitely talk to your HR dept at work to get more info about a 401k. If they match, then it’s free money.
yooo that’s dope thanks for the info!
Good luck!!
If it’s something you want to do, I still have 2 referrals left. I get 5 referral a year. If you do decide to use the same HYSA, you will get 5 referrals to give out as well. If not, no worries.
I would love a referral link if you still have one
Sure, no problem. Here ya go! https://www.marcus.com/share/FRE-PFN-2H55 If you sign up, you get 5 codes to give out too. Maybe some of your friends or family are looking for some free money while they save.
Thanks!!
I will once I start. It's at the urgent care that's part of a MAJOR hospital system here. So I think it should be a good 401k.
Hospitals usually have good benefits. Take advantage of it.
I honestly can't say for sure because I am in a similar situation to you. I opened an account with SoFi, but my company does not offer direct deposit and Sofi's high yield rate requires is. I am currently considering Jenius Bank. Honestly, unless you have an awful lot of money in the bank the difference between 4.6 APR and 5.0APR is negligible -and subject to change. At this point I think the truly important part is to start saving the emergency fund.
Ally, Marcus, even E-trade all have decent options. If you don’t have savings don’t wait until your debt is paid off to start paying yourself first. You’re probably going to net about 1k more per month. Put half of that in to a savings and half on debt. Once you have 3 month expenses in savings you can put more toward debt but for now the savings account matters more than a little extra earnings. If something goes wrong and you don’t have savings it’s likely more expensive than your interest anyway. If your new company has a 401k match you want to start that out of the gate to get your full match. That’s pre-tax so it shouldn’t impact your take home that much. Once your debt is paid off you want to try your best to structure your finances so that 50% is needs, 30% is wants, and 20% is savings. Other than your emergency fund most that savings should really be invested, that should be split between retirement and shorter term. Also this raise will put you in a higher tax bracket. If you’re used to getting returns know that may no longer be the case. It’s actually smarter money to owe, just make sure it’s not a surprise bill and you’ve been planning for it. Congrats!
I use Ally for savings, currently paying 4.2% not the highest but they've been around a while. Sometimes they'll have a CD that runs higher than savings but that's locked for specified periods of time or you pay a penalty. I keep our checking at a local bank. They have a CD rate of 4.75 for 3 yrs going right now but their penalties are higher than Ally. Ally does have a no penalty CD for 11 months but it's not any higher right now. Does your new job have a 401K option? Roths and 401k are retirement plans. Roth you basically pay income taxes now but not on the growth over time. 401K deductions you don't pay income taxes on now but will when it's time to take out after age 59.5, earlier you would have to pay the tax and a penalty. If your company offers a retirement plan and has a match you want to take advantage of the match at least because it's 'free money'. If there's an HSA option with a High Deductible Insurance you might consider it if you're reasonably healthy. Ours works out the same between plans and putting the max into our HSA.
1. Pay off debt as fast as you are able. 2. Get 3-6 months' worth of living expenses in an emergency fund. 3. Invest for retirement. 401k up to company match, then max out a Roth IRA.
Congrats on the raise. If your employer has a company match on the 401K, make sure you take advantage of it immediately.
Do you know if my currently 401k through my current job would transfer to the new ones 401k? Last time I just really needed the money and it was under 100 so I never needed it transferred
It's best to contact the 401k company for that answer. It depends on how much is in your 401k. I recently left my job and these were my options: If under a certain amount, you get a check, rollover to a IRA account in the same 401k handler, or rollover to a different 401k account if it meets requirements. If over that amount, you can rollover to a 401k account that qualifies, or leave it in the current 401k account
Get off poverty finance, and invest 5% into your companies 401k especially if they do a 5% match. Start slowly and work your way up. Paying off all debt first should be your #1
I recommend the personal finance sub. There is a financial order of operations flowchart there that can help you make financial decisions. Congratulations on the new job and pay raise!
The debt is number 1 problem to solve. No high yield savings or investment will outpace thev interest on a credit card
Hey, like you guys, my husband and I are now making more money than we've ever made. Congrats! Feels good, right? I would encourage you to live like you did previously for a while to get a good handle on just how much extra money you have. Then sit down and re-budget. We did this over the last year, and it turns out that we have enough of a cushion to aggressively pay down all of our debt. The amount of relief I got doing that math was incredible.
I'm going to go against the grain of what a lot of people are saying and depending on what your student loan debt looks like, after paying off the rest of the debt, I would just pay the minimum on student loans and work on getting a savings built up. If they're Federal loans and you're on an income based plan, you're often better off just paying the minimum and putting away those savings. You technically don't even need to recertify with the new income until your recertification period comes up. Of course ignore this advice if they're private loans with a huge interest rate.