As the title says I'm a 19 year old nursing student with 25k saved. I've been working since 16 years old and I currently find myself as a full time student with a full time job. I make around $2700 a month right now and I save half of my checks. I live with my parents and my tuition is paid for by my scholarships. I have no car payment (though I do want a new car haha). 25k is a big milestone for me and now that I'm there I have no clue what to do with it. It's currently sitting in a credit union HYSA earning 6% APY but I want to make more with the strong foundation I've built. Do I start investing into index funds? Should I split off a certain amount for individual stocks? All I know is how to save, but I don't know how to make more outside of my hourly wage. Any advice is greatly appreciated and if there's any confusion or questions I'm happy to clear it up. Thank you!
25k saved as a 19 year old college student. Where do I put it? How do I make more?
byu/LittleWontons inpersonalfinance
Posted by LittleWontons
5 Comments
I have no advice, just wanted to say: good for you, that’s great and impressive
I’m not qualified to tell you what to do but if I were you I would consider your goals and future plans first. Do you want to do further schooling? Do you plan to buy a home or move out in general?
A safe bet is just keeping a large sum in index funds in a tax free account (not sure what country you’re from). In my country, after your regular tax free account is maxed out, you can look into retirement accounts that allow you to pull out funds for your first home or further education.
Great job on saving this much at such a young age, that’s huge!
So you’re debt free, and it sounds like you’ll be able to continue to build your savings for the foreseeable future. That’s great!
Right now, you have $25000 gaining $1500 every year.
I’d like to offer you this: the first thing you should save up is a short term emergency fund, which you have, followed by a long term emergency fund of 6-12 months’ expenses— and these should be in a HYSA or something else where your money can be easily accessible. You may or may not already have that. Check your own budget and see if you’ve got enough for that, for now.
If your money has already reached that for your current life needs:
You can start putting $7000 a year into a retirement account, perhaps with a Schwab Roth IRA account, where you do invest in index funds.
Otherwise, maybe it’s time to save up for a car. A car is something fun that will also get you to better work and internships in the future. Can you open a separate savings account for that?
Follow this: https://www.reddit.com/r/personalfinance/w/commontopics
You’re in a great spot at 19. Personally at this age, I would focus on safety and close to guaranteed growth.
Keep part of that money in your HYSA as an emergency fund, maybe 3-6 months of expenses. With the rest, open a Roth IRA and put it in something simple like an S&P 500 ETF, like VOO. Try to max it every year. That early compounding interest is huge (compounding interest IS the 8th wonder of the world, if you didn’t know 😉)
If you want a car soon, keep that money in savings so it’s safe. Once you’ve got your Roth IRA funded and some cash set aside for short-term goals, then look into a taxable brokerage account. You don’t need individual stocks right now.