So, I bring in around 4,000/m after tax currently(about $3,000/m from my W2 job and about $1,000/m from DoorDash). I am looking to increase that to at least $5,000/m. I am contributing 6% to my 401k(85% S&P 509 15% Bonds) at my job(50% match up to 6%). I also try to put $50/w in an individual brokerage account(DCA $10/d into QQQ).
I have kind of struggled financially a lot in the past. Mostly from poor decision making. I have honestly come a long way however, and am very proud to say I am much more financially responsible now than I have ever been. I just recently filed bankruptcy last October(was discharged in January) and am still in the process of rebuilding my life.
I am sort of just looking for a second opinion from an outside source. I just started investing into the markets around February, and have been trying to save as well. I currently have about $300 in my brokerage account, and about $1,000 in my savings account. I also have about $1,800 in my 401k(my job just gave me our retirement plan contribution of $1,000 about a week ago).
I hear a lot about saving up 3-6 months of expenses(my expenses are about $2,900/m give our take) as an emergency fund. However, that feels like an impossible take at the moment so I have been focusing on saving up 1 months worth right now then building it up over time.
My question is, should I lower or even sell my investments and focus on saving an emergency fund before starting to invest in the market, or should I continue to invest and try to save what I can on top of that?
I do also have debt. About $7k in my car, and about 13k in student loans. I do have a secured credit card($200 limit) that I got after my bankruptcy, but I pay that off every month so I do not carry a balance in that.
Major Monthly Expenses – $2,446-$2,521
Rent – $1,535
Utilities- $75-$159
Car payment – $380
Car insurance- $175
Phone bill – $101
Student Loans – $180
Figured I’d be as transparent as possible, since I’m asking for an opinion/advice.
33yo bringing in around $4,000/month
byu/Fantastic-Bag3054 inpersonalfinance
Posted by Fantastic-Bag3054
2 Comments
Start here:
https://www.reddit.com/r/personalfinance/wiki/commontopics
>I hear a lot about saving up 3-6 months of expenses(my expenses are about $2,900/m give our take) as an emergency fund. However, that feels like an impossible take at the moment so I have been focusing on saving up 1 months worth right now then building it up over time.
Yes, having a well funded emergency fund should be a very high priority. Higher than tossing money into a taxable brokerage.
It’s even more important to have cash savings if your cashflow is tight. One surprise car maintenance expense and you’ll be very glad you had the savings.
Why are you buying bonds at such a young age? Planning for early retirement? $24.5k/year into your 401k on ~$45k/year gross income is impressive; good job. Why not utilize an IRA before a brokerage?
If you have no high-interest debts, I would split up your retirement and emergency fund contributions until you hit your emergency fund goal.
And as a side note, make sure you have the correct insurance rider for DoorDashing.