I am 23 and I am about to be starting graduate school in January. Tuition is paid for through a TAship. I have 23k in savings and 10k in HYS. Should I put everything into my HYS? I have no debt (not even student loans) and using my budget and I am expected add 200 dollars to my savings every month. Does anyone have any recommendations for me financially? I have heard about starting an IRA or a brokerage account, but I don't know what to do or where to start especially since I starting graduate school and am not sure how much money I should have easily accessible.
Edit: I did work the past year. My graduate stipend will be 22,500 a year. All I need for a 6 month emergency fund is 5,500.
What do I do with savings?
byu/Automatic-Frame3734 inpersonalfinance
Posted by Automatic-Frame3734
4 Comments
HYS is the usual recommendation for people in your situation. If you have more than you need for expenses and an emergency fund, you may want to start a Roth IRA. Please have look at the flowchart in the wiki.
You didn’t mention if you worked this year. You can only contribute to an IRA if you have earned income in the year that you’re contributing for. If you do, then a Roth IRA can be a good option. You can still technically get the money out without tax or penalty, up to the amount that you put in. I would not bother doing so if you know you need to take the money out, but if there’s a good chance that you could leave it there for the long run, contributing could help get you going in the right direction.
Since you are not sure that it’s money that you won’t need in the near future, you should probably pick a conservative option. If you opened an IRA or brokerage account, you could invest in sort term bonds like SGOV fund or just the default fund for vanguard or Fidelity. They invest it in a similar way.
If you think you will likely be the money, just stick with the high yield savings account
Hys and good apy. You got any systems generating you income?
1. Keep at least 6 months of expenses in a HYSA as your emergency fund
2. Open a Roth IRA through Schwab or Vanguard, contribute up to the limit ($7k for 2025) and invest it within the Roth. This is for your retirement, but you can remove your contributions penalty-free if you need them (the same is not true for the earnings).