Is this a good start?

[Anonymous]

I am 27 and just paid off the last of my credit card debt (wasn't that much but still took a lot of willpower).
I have no student loans or any other debt except for my car loan. I have 2 years left on it and it's $310/month.
I have $500 saved (not much, I know) and will be getting $1000 back on tax returns.
I have been researching a lot on IRAs (I have no 401k at work) and have chosen a Vanguard target retirement fund.
I will have about $500/month in extra income starting now. Should I take the $1000 (from tax return) and open it now, and start putting in $200/month, while saving $200/month into an emergency fund?

I haven't had any extra monthly income until now, and I have no EF but understand the importance of funding an IRA sooner than later.

[Anonymous]

OP here. I didn't mean to send that rigt away.
Continued: Basically, my goal would be to start both now, and once I get a decent EF, start maxing out IRA.

[Anonymous]

I would put the tax refund in a savings account as an emergency fund. Then I'd put 15% of your income each month into an IRA. Use the remainder to pay off your car or build your EF up to 3-6 months expenses.

[Anonymous]

Anonymous wrote:I would put the tax refund in a savings account as an emergency fund. Then I'd put 15% of your income each month into an IRA. Use the remainder to pay off your car or build your EF up to 3-6 months expenses.

I agree with this advice.

[Anonymous]

More cushion in EF first. Agree. I'd aim for six months salary there.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I would put the tax refund in a savings account as an emergency fund. Then I'd put 15% of your income each month into an IRA. Use the remainder to pay off your car or build your EF up to 3-6 months expenses.

I agree with this advice.

I would do things a bit different.
I would put the tax refund in bank to start an emergency fund.
Aggressively pay off car by doubling or tripling monthly payment
I would then build ip 6 mos emergency fund
LASTLY I WOULD CONTRIBUTE 15% TO RETIREMENT

[Anonymous]

What is the rate on your car loan?

[Anonymous]

OP here. Rate on car loan is 6% I believe. I just keep hearing to invest in IRA right away, compounded interest, etc.. that even one year earlier can make a difference, which is why I'm just tempted to start one now.

[Anonymous]

Also: do you have a 401K at work? If so, and if there is any matching from your company, contribute whatever it takes to get the match before you start funding the IRA.