Q: College graduate looking to start saving/investing
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Anonymous
| I sadly have no skills in this area so hoping someone on this fantastic list can help. My son just graduated college and we’d like to encourage him to start saving. He just started a job but it’s not the kind that really matches a 401k or anything like that. He doesn’t make much but we’d like to encourage the practice of starting to save. Neither my husband or I grew up in families that did this sort of thing so we don’t really know where to direct him. We’d like to slightly nudge him along. I’m sure we can figure out opening a Roth but is there something else that might be more worthwhile? Is investing a good idea? |
Anonymous
| Dave Ramsey for basic saving and avoiding debt tips for entry level earners and an investment account with vanguard. |
Anonymous
| Wish I read this earlier https://www.etf.com/docs/IfYouCan.pdf |
Anonymous
Dave Ramsey's core principle: If you can't pay for something in cash, you can't afford it![i] This is what I tell my kids! |
Anonymous
| This^. Credit card isn't for buying wants and collecting debt. Use it for convenience to not carry cash, build credit score, get points and to keep track of expenses. |
Anonymous
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Well the first fundamental is to "live on less than you make". I don't know how much he makes or how much his expenses are so I can't help with specifics but in order to build savings/wealth, you need to live on less than you make.
1. Create an emergency fund. Maybe $1000 in case of unexpected bills. keep in an high interest, online savings account. Should get at least 3.5% now-a-days. 2. If you have a 401(k) WITH A MATCH, contribute to 401(k) at least to get company match. Then add to emergency fund until you have 3-6 months of income. 3. If no 401(k) match, increase emergency fund to at least 3-6 months of income. 4. Contribute to a Roth IRA, up to $7K a year. 5. Contribute to a Taxable brokerage account. (invest in index funds or ETFs with vanguard, Fidelity, or Schwab). If you don't have a 401(k), save in an online savings account at least 3-6 months of pay, then contribute to Roth IRA, then contribute to brokerage account. |
Anonymous
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Read this: https://www.reddit.com/r/personalfinance/wiki/young_adult/
Also, this a basic common question that ChatGPT can walk you through. |