Planning—Other / What would you do with an extra $800 a month?
Mar 26, 2022
What would you do with an extra $800 a month?
Hello! I'm 26, single and working. I have an extra $800 after taxes left after expenses and would love extra opinions on what you think I should do with it. - I have about 2 months of savings in the bank in a high yield savings account - I contribute a total of about $6k into my work 401k per year - I have about $15k in student loan debt where interest is zero for now and I'm okay not paying it off right away - Renting for now but would love to have my own place whenever I have enough to afford one - No car and I don't need one I'm only starting to figure things out by budgeting but now I'm not so sure what to do with this left over $$!
Replies (9)
Mar 26, 2022
@NataliaTWS, Great work getting your finances in order! Looks like you're in a nice position. You may want to pad that savings account (emergency fund) with another month or two of expenses if you can, but only if you feel it's warranted for your situation. I would also start investing that money every month. If you're just starting out, it may be a good idea to go with 1-3 simple index funds to start. The earlier you start, the better and the sooner your savings can compound. Compounding earnings is like the 8th wonder of the world as they say.
You may find this lesson relevant and helpful.
Click on it below and a new tab will open and take you directly to the lesson.
Create a Simple 3-Fund Portfolio
Investing Basics
6 min
Apr 05, 2022
@Julie186, thank for this
D
Mar 27, 2022
@NataliaTWS, Good for you for all you're doing and asking questions too. If I were you I'd start investing in funds right away. I say funds because you get fast diversification and it's a lot easier than trying to pick stocks.
Apr 13, 2022
@Dan223, Right!
Mar 28, 2022
@NataliaTWS, - Look into if your work offers an HSA (health savings account) because of their tripe tax benefit - Up your 401k contribution to more than then $6K - Invest in index fund like an S&P 500 ETF (I did this not too long ago myself and not turning back!)
Apr 05, 2022
@Beth890, they do offer an HSA and considering it for next year because I'm not on an eligible health plan but it's a good reminder
Apr 28, 2022
@NataliaTWS, Take a look at the US savings bond called i-series bond. The rates change every 6 months because it is tied to inflation and it is set to go up to 9.62% in May (through Nov). That may be a nice way to safely save your extra month or at least a portion of it. https://www.treasurydirect.gov/
D
Nov 10, 2022
@NataliaTWS, I would up your 401k contribution, add to your savings account and find something to invest in!