Hey everyone – I’m a 21F, living at home, going to college soon and just got my first job. I’m only working 20 hours a week at the moment so my pay is $150 at the moment.
I want to have the best future I can. I want a retirement, investments, savings and low debt. I live in the US so I know debt is unavoidable. I did my first 2 years at a community college to save money – now I’ve got 4 years to get my masters in architecture at roughly 40k a year (haven’t gotten all my scholarships yet so that’s the starting point). I have a lot of medical issues and require both talk & physical therapy every week. These are non negotiable. I have endometriosis and have already had 1 surgery for it – the way the disease works it’s very possible I could have a few more. I need money for all of that.
I want to be to have college funds for my future children, and if possible, my nieces and nephews as well. I want to work so my children do not have to worry about college and starting out their life.
My parents are the most financially irresponsible people I’ve ever met. I want all of my stuff separate from them – right now I have 2 checking accounts, 1 savings account and one credit card. All technically under my parents’ accounts. I’m working on figuring all that out. They didn’t save ANYTHING for retirement, college, medical bills or anything. They only know how to spend. I do not want to be like that but also I don’t want to be so cheap I can’t enjoy life!
Where do I start??? Tell me everything!!!
Edit: I am being paid fully in cash so no tax. I also do my own taxes so if y’all have any advice let me know!!
Edit 2: I’ll be getting paid 200 a week at $10 an hour – the first week I only worked 15 hours!
I got my first paycheck. Where do I start?
byu/youandyourfijiwater inpersonalfinance
Posted by youandyourfijiwater
4 Comments
I would save 20% it’s not a lot at the moment but try to make a habit of saving a certain percentage of what you make. When you graduate you’ll make more money and will most likely get a retirement plan through work, I normally add 12% to my retirement account though work all while still saving money on the side as well. Read the book the millionaire next door by dr Stanley.
Obviously still enjoy life as well while saving
Start with accounts not attached to your parents so they can’t take out your money.
First of all, get your own bank account. Just one, a checking account. At a bank where you do not share an account with your parents. Move all of your money into the new account.
Next open a HYSA at an online bank. Transfer some money into it. This is your emergency fund. Don’t touch it until/unless you have a true financial emergency.
Next, get a new job. A legal one. Because you can’t save tax advantaged for retirement if you don’t officially have any income. Have your new job direct deposit your wages into your new checking account.
Then open a Roth IRA and start contributing.
>I live in the US so I know debt is unavoidable.
Be careful with this mindset. Debt may be unavoidable in order to complete your education, but it is not unavoidable for life in the U.S. long-term, and the more deliberate you are about avoiding or minimizing debt at every stage of life, the sooner you will have a solid financial foundation to build on.
You’ve already taken the first steps by choosing community college for your undergrad basics. $40K/year sounds like a private university, and that’s something I’d urge you to reconsider unless you do get enough scholarships to offset the cost difference compared to a more affordable state school, especially given your plan to complete a master’s program and your goals to eventually build the resources to help fund education for other family someday. Starting your professional career with $160K+ debt will cause you to spend several years digging your way out of the hole before you even start climbing the mountain. It will be especially tough if your starting salary is around $60K for the first few years; it’s generally recommended not to take on more debt than your projected first year salary after graduation.
Many people regret taking out a huge debt when there is not a high probability of a significant return on investment, and you can do your own research on whether attending a specific school is likely to be a major factor in your employment options and future compensation, as well s whether a master’s degree is valued over a bachelor’s degree + 2 years’ experience enough to warrant the additional educational expense. I don’t know the architectural field enough and I’m sure it varies by region, but r/architecture has some cautionary tales of regret for the amount of student debt compared to the return on that investment.