Hi!!! Its basically just the title. I started working last year and I currently have $14k in my savings account, which has no interest. I really don't want it to be sitting there, but I'm indecisive on what I want to do!
I know I want something reliable that will grow my money. Investing pretty much terrifies me because I don't know anything about it, but I am open to learning. But from there … should I open an HYSA or a CD? What are some reliable options from them? Are there any other options I should consider? Should I keep anything in my current savings account, for emergency maybe? It's currently through USAA
Thank you in advance!
19 with $14k in savings….advice?
byu/lexarkk inpersonalfinance
Posted by lexarkk
3 Comments
You should open a HYSA to start, and also a checking account. The HYSA is your emergency fund, you dont need any other savings account.
You generally want to keep around 3-6 months expenses in there.
For the HYSA, any bank thats convenient for you. Lot of people recommend the online options like Ally, SoFi, AmEx, Capital One, or Fidelity’s CMA.
Then you can also start investing. Which is awesome starting so young! You can end up having lots of money later in life the earlier you start and keep up with it!
Open a Roth IRA. At Vanguard, Fidelity, or Schwab (just pick one).
You can contribute up to $7500/year, or your income, whichever is less.
That money will be 100% tax-free when you take it out in retirement.
Up to you how much you want to start with.
All you need to invest is in a total market index fund like VTI, or VT which includes all the worlds markets. Thats it! Very simple!
Then whenever you have more money, you contribute more. Every year.
Your emergency fund should be in a HYSA. You need about 6 months of expenses in your emergency fund. You can transfer from your HYSA into your spending account at USAA if you need money in an emergency.
Also open a Roth IRA and start investing there. Invest in a broad based. passively managed, low expense ratio index fund with at least 500 stocks in it.
If you have a retirement plan at work, use that too.
Stick to basics of saving and investing. Keep at least 6 months of living expenses in high yield savings acct. If you are staying with your family, emergency fund may not be your priority.
Contribute to 401k, if available, to get full employer match. Then max out Roth IRA. Max out HSA, if available. If you have $ left over contribute more to 401k. Choose low cost stock index funds for instant diversification. Stay the course no matter what market news you hear.