Simple. Pay off all debt first, then if you have a surplus, consider retirement vehicles. Does not make sense to save with borrowed money. Same if you buy a house and get a mortgage, pay off mortgage first, then save for retirement, else you're saving with borrowed money and paying interest on you retirement/savings account.

Anonymous wrote:Hello!

I just graduated from college this past spring and I am looking for some advice on how I can be financially wise with my money/cost of living.
Background: I currently have about 15-20,000 saved up in a high interest savings account. I just began working at an entry level job (42,000 gross) this past month. I have about 60,000 in student loans that I will have to begin paying off (hopefully quickly) in the fall. How can better invest my money/accumulate more money? Should I open up a 401k or IRA? Any advice would be much appreciated!

Take the 20K and pay off the loans. Do it now while you have the money. Keeping around long term payments on the student loan will continue to effect you financially in ways you don't understand right now.

I liked Andrew Tobias's books. Easy to understand and easy to read.

Get married.

I would do a Roth IRA first.

Anonymous wrote:OP here, thank you all for your helpful advice!
I have a couple of follow up questions. If my employer/company doesn't offer a 401k plan, does it make sense to open one up on my own? Should I have multiple savings accounts( CD, money market)? Thanks!

Open an IRA. You can't open your own 401(k). Are you talking about saving or investing? Once you have your emergency fund in an FDIC insured bank, open an account with a low cost fund family and put all your investment money there.

Anonymous wrote:

Anonymous wrote:I would add, spend the money to subscribe to Money or Kiplinger's magazines so you get a good grasp on the basics. Open an IRA and a 401(k) asap.

Disagree. These magazines are really confusing and advertise financial products you don't need. Read "I Will Teach You To Be Rich," a personal finance book for 20 somethings. You can borrow it from the library. It is funny, easy to read, and has sound practical advice on topics like students loans, saving, budgeting, investing, retirement, etc. Good luck.

Confusing? Very basic, but not confusing unless you don't know a stock from a bond.

OP here, thank you all for your helpful advice!
I have a couple of follow up questions. If my employer/company doesn't offer a 401k plan, does it make sense to open one up on my own? Should I have multiple savings accounts( CD, money market)? Thanks!

Anonymous wrote:go to bogleheads.com
you will get better financial advice there than anywhere else on the web or in a book.

Another thing I would add though - everything in moderation. I have friends whose lives have been ruined by their thriftiness as surely as others have ruined their lives through their profligacy. Enjoy your youth.

PP 21:10 here. I disagree. bogleheads.com is great (I'm a boglehead), but it can be overwhelming. If you want the basics, read a respected personal finance book (like I Will Teach You To Be Rich or The Bogleheads Guide to Investing). They've been edited and organized and fact checked, unlike anything on the web. After that, if you are interested in learning about investing beyond the basics, join bogleheads.com.

go to bogleheads.com
you will get better financial advice there than anywhere else on the web or in a book.

Another thing I would add though - everything in moderation. I have friends whose lives have been ruined by their thriftiness as surely as others have ruined their lives through their profligacy. Enjoy your youth.

Anonymous wrote:I would add, spend the money to subscribe to Money or Kiplinger's magazines so you get a good grasp on the basics. Open an IRA and a 401(k) asap.

Disagree. These magazines are really confusing and advertise financial products you don't need. Read "I Will Teach You To Be Rich," a personal finance book for 20 somethings. You can borrow it from the library. It is funny, easy to read, and has sound practical advice on topics like students loans, saving, budgeting, investing, retirement, etc. Good luck.

I would add, spend the money to subscribe to Money or Kiplinger's magazines so you get a good grasp on the basics. Open an IRA and a 401(k) asap.

Sounds like you are doing fairly well so far - having a savings account.
rule 1 - live beneath your means. Right now that means don't spend more than your salary. typical traps are paying for fancy new cell phones and service, too many happy hours/restaurant meals, buying a new car or a car (avoid if possible), paying for cable. If you aren't good at it already, learn how to say no to things you can't afford.

2. Pay off your loans ASAP - it will make you feel great. THe higher the interest rate on them, the faster you should pay them off.

3. Interest rates on savings accounts aren't great, but a savings account is safe, and it's nice to have an emergency fund cushion. Once you get more funds, open a Vanguard account and you can put savings into a money market account there.

4. Yes, fund 401k and IRA, but also pay off loans as high priority.

5. once you are debt free, start saving more - fully funding 401k and IRA and then investing. Figure out your financial goals (house? trips? marriage? kids?) and make a plan to get there.

good luck.

Great job saving so far. That 20K can be your emergency fund. Now you need to open a 401K account and contribute at least as much as your employer matches. Next you need to decide what long-term goals you have (buying a car, house, etc) and start saving up for that as well. Decide how quickly you can pay off your loans and figure out your monthly payments based on that. Create a budget that would incorporate these goals and track your actual spending on a regular basis to make sure it conforms to the budget. You are definitely on the right track. Keep it up!

Hello!

I just graduated from college this past spring and I am looking for some advice on how I can be financially wise with my money/cost of living.
Background: I currently have about 15-20,000 saved up in a high interest savings account. I just began working at an entry level job (42,000 gross) this past month. I have about 60,000 in student loans that I will have to begin paying off (hopefully quickly) in the fall. How can better invest my money/accumulate more money? Should I open up a 401k or IRA? Any advice would be much appreciated!