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[–]CathanRegali 976 points977 points  (74 children)

You're already being financially responsible by having savings, paying your loans and you know the next steps.
Schwab is good, Vanguard is good. Just focus on low expense ratio funds.
Credit cards improve your credit simply by existing for years. So you open them, put something small on them, and pay them off in full every month. Utilities sounds like a fine idea.
As for what card, it kinda depends. If you're already repaying your student loans, you likely have a decent score already. Capital One and Chase have good cards. Just pick ones that don't have annual fees. You likely qualify for a Capital One Quicksilver or a Chase Freedom Unlimited.

I picked my first cards based on sign-up bonuses and made sure I spent enough to get them.

[–]oakbones[S] 428 points429 points  (64 children)

This is good to hear. I'm sort of in the mindset of "If I don't get on top of my financials RIGHT NOW I'll be homeless and dead by the end of the year".

Thanks for the credit card suggestions too!

[–]CathanRegali 164 points165 points  (11 children)

That's a far better mindset than ignoring them. The sooner you save, the sooner you retire. Good luck!

[–]TheAsian1nvasion 80 points81 points  (10 children)

I feel the need to point out that retiring at 50 is nice, but you’re only 22 once. Live a little. Have fun. It sounds like you’re already very financially responsible. I’m not saying blow your money on hookers and blow, but you can afford to be 22, if that means paying off your loans a year later than you would have, when you’re 80 I’m sure you would trade all the interest payments in the world to be 22 again.

[–]feng_huang 27 points28 points  (1 child)

I'm not saying you're wrong, but there's something to be said for not having to work part-time as a Wal-Mart greeter to make ends meet when you're 80.

Maybe there's even a happy medium to be found where you avoid that and also live a little when you're younger! :)

[–]dracsept 12 points13 points  (0 children)

Can confirm; am poor as shit and still have about as much fun as I imagine I would if I didn't need to work for survival. Course, I don't have the social life someone my age would be expected to, so, not clubbing it up probably saves me more than having a Terraria hobby.

[–]match369 11 points12 points  (7 children)

I agree with this. I spent half of my 20s living frugally to the max and I definitely regret it.

[–]bot_bot_bot 5 points6 points  (6 children)

If it's any consolation I went absolutely fucking nuts and now I'm playing catch-up in my 40's. The grass is always greener, etc...

[–]TheAsian1nvasion 2 points3 points  (5 children)

I feel like there is a happy medium between the two scenarios that the two of you described.

[–]bot_bot_bot 2 points3 points  (4 children)

You could always live frugally through your 20's then go nuts into your 40s?

But seriously, on the one hand I wish I'd been a little more responsible in my 20's, but on the other hand, if I had, I wouldn't be where I am now. I'm really happy where I am now. Got a great family, good interesting job, and I love where I live. So I shouldn't be complaining really. So even though I'm playing a bit of catch up in my career, thing have worked out well.
But as my wife has said, imagine what I might have achieved if I'd put in a bit of effort back then?? I can't really, because the conclusion I keep coming to is that I wouldn't be with my wife and son, which is a deal breaker. So all is good really.

[–]TheAsian1nvasion 1 point2 points  (3 children)

Exactly, I’m in a similar place, happy with my job and my financial situation (with the exception of owning a condo I can’t sell).

Could I be in a better place? Probably, but I also don’t regret having fun in my 20s, and enjoying life.

I do regret buying that damn condo though.

[–]bot_bot_bot 1 point2 points  (2 children)

rent your condo. It's not that difficult, you can usually get a company to look after it for around 1 months rent a year.
Then at least it'll be paying for itself while you're getting on with things.

[–]Greenie_In_A_Bottle 105 points106 points  (22 children)

Another cc option is the discover it card. It offers 1% cash back as well as 5% rotating categories and doubles your cash back at the end of the first year. This makes it effectively a 2% cash back card, and by the end of the first year you should have sufficient credit to get almost any card you'd like so long as you've been paying your debts.

[–]DismantledNoise 63 points64 points  (9 children)

Came here to say this. Discover IT card is a great starter (and regular) card. The rotating categories are really great throughout the year. As long as you're paying it off in full every month you should be reaping some decent rewards with this one.

[–]Greenie_In_A_Bottle 16 points17 points  (3 children)

Yeah, I got it in November 2016 as a starter card and it's been a great way to build my credit. It also has the safety net of the first late payment fee being waived so it's beginner friendly if you will. The main downside is that it's basically a US only card.

[–]DismantledNoise 8 points9 points  (2 children)

Yeah same. I got it in 2013 and wasn't very responsible with it a few times, but have paid it off since and used it to build credit. It's been a great card.

[–]throwafuckfuck 3 points4 points  (1 child)

I got one June 2016 and used it responsibly until I lost my housing, and now I'm in 2k of high interest debt! I lost over 100 points in two months! I'm dying inside!

[–]DismantledNoise 2 points3 points  (0 children)

Stay strong! Being here is a sign you’re on the right track!

[–]jonesaphore 7 points8 points  (3 children)

I agree, the discover it is a great first choice. Got one February 2017 with no credit history, already up to a $4000 limit.

[–]DismantledNoise 4 points5 points  (0 children)

Keep with it. I’ve had mine since 2013 and my credit limit is almost $18k on it at this point. They raise it fairly often I think. Or maybe it’s just me since I used to use it too much! Hahah

[–]bangbang423 4 points5 points  (1 child)

Request a credit limit increase on it. I got my card March of last year and they raised my limit the 3-4 times I asked em. Started at 6k and now have a limit of 10.5k.

[–]jonesaphore 1 point2 points  (0 children)

They just auto increased it a few days ago. I'll probably wait a bit before another manual request.

[–]shintako87 4 points5 points  (0 children)

I have an extremely high credit score and I still use Discover IT over a lot of my other cards. Pretty much for every day expenses that don’t fall into travel or dining categories. It’s also one of the best cards if you ever travel in Asia as it doubles as a JCB/UnionPay with no transaction fee.

[–]frozen_mercury 14 points15 points  (1 child)

Also make sure if you get a friend to refer you for the card who already has it. He/She gets 50 dollar for that. :)

[–]jeffiesos 3 points4 points  (0 children)

Both parties will get $50 (as a statement credit)!

[–]orestes77 9 points10 points  (0 children)

Fidelity has a visa card that is 2% back on all purchases with no annual fee. American express has 6% on groceries 3% on gas. stations and 1% on everything else with a $95 annual fee.

[–]KJ6BWB 5 points6 points  (6 children)

If we're going to compare credit cards have you, a parent, or grandparent ever served in the military? Because if so you are eligible to join USAA. And if you do that and can get paid biweekly or monthly (whatever it turns out to be) with direct deposit, then you'll make enough to get 2.5% cashback on everything with the USAA credit card.

Sorry, this card closed 5 days ago.

[–]lizerlfunk 2 points3 points  (4 children)

This card is no longer accepting new applicants, sadly 😭

[–]karmapuhlease 1 point2 points  (0 children)

Damn, I wish I'd seen this a week ago... I want to switch my everyday non-dining, non-travel spending over from my CSR to something a little more cashback friendly. Already have the Amex BCP but that's really only good (great, even) for groceries and gas.

[–]Socalinatl 10 points11 points  (0 children)

As a person who overdid it with credit cards and created a bit of a hole for myself, I can tell you that you’re probably not in danger of being homeless or dead anytime soon. Budgeting is important, just try to make sure that any credit card purchases are for emergencies only, not stuff that you want or feel like you have to get.

Interest on credit cards is a terrible expense, especially considering that if you got even a 1% return on your money instead of paying to stay poor, you will be “financially free” so much sooner it’s ridiculous.

[–]thatguy8856 10 points11 points  (0 children)

I would say as a starter card, go Quicksilver over Freedom Unlimited. If you ever travel out of country on vacation the quicksilver has 0% foreign transaction fee, which nets you the best currency exchange rate possible. Only reason I see Freedom Unlimited is if your salary increases quite significantly, and you add a Chase Sapphire Preferred or Reserve and your really start raking in travel rewards. However, if this happens you will likely be able to just outright apply for both cards in the future, so I would say go for quicksilver.

[–]mbash013 22 points23 points  (7 children)

As long as you use them responsibly, credit cards are a great tool for multiple reasons. Builds credit, user protections, perks, etc. I use my card as a method of budgeting as well. Rather than living off of my checking account with my debit card and mentally keeping track of my overall balance, I just start fresh each pay check with my credit card. Essentially, every time I get paid, I pay off my credit card. I give my self a $500 limit between pay periods. Seeing my balance start from 0 and work it's way up to my limit is a much easier way to keep track of my spending. Plus I benefit from all of the other perks as well. Just don't get into the mindset of "free money" it's one of the biggest mistakes that card holders can make.

[–]krick3t 16 points17 points  (5 children)

Let’s stress this again. Please be responsible. I currently owe around 9k, which works out to about $275 a month I pay in just CREDIT CARD debt. It was all spent trying to hold myself over until I got further along in my apprenticeship, and this year I’ll be able to start making better payments with my raise.

[–]shicken684 4 points5 points  (0 children)

Another suggestion for credit cards is one through Amazon if you use them a lot. I spend thousands on that site every year, and with the card you get 5% back as Amazon credit or 1% for all other purchases. They'll usually entice you with 50 or $75 off a big item if you sign up for one.

[–]BruceRL 9 points10 points  (0 children)

It seems like all you're really asking about are credit cards, and CCs \= 'financials'. Only thing about CCs I'd add to the other advice is you better be damn sure you have discipline. They can really turn your financial situation sideways if you don't. I got mine years too early and it took me years to recover, when what I absolutely positively should have been focusing on was constantly improving my income opportunities, maximizing my savings, and minimizing how much money I spent. Nothing more complicated than that for the first bunch of years.

[–]B3LYP2 4 points5 points  (0 children)

Keep in mind, some utility companies charge you a percentage to pay them with a CC. In that case, don't. Make some small purchases here and there at stores with your CC, but make sure you think of it like a debit card and not free money, and pay it off in full every month.

[–]awildjabroner 3 points4 points  (0 children)

there are a lot of options for credit cards - personally i opted for a straight cash back card as a starter and used the yearly savings for my xmas budget at years end.

Check out Nerdwallet for other breakdowns and recommended cards. They just released their annual "best cards" lists that break down by cash back, travel rewards, started cards, etc.

If you manage to stay on top of the bill and pay it off each month in full i'd recommend putting every bill possible on it to get the credit bump over time and the rewards. If you're paying the bills anyway you should probably take advantage of getting a percentage back in cash back or miles if you like to travel (and if you break your budget down further or are extra organized compared the the average joe get 1 or 2 with specific bonuses to use for gas, groceries, etc).

[–]jack10685 3 points4 points  (0 children)

As much as everyone hates Wells Fargo, I have to admit that their student credit cards are good. I applied for mine with no credit whatsoever, and got accepted. No annual fees, I earn rewards points ($50 so far in the 6 months I've had it, and I don't spend much), I had 6 months no interest, $1500 credit limit to start. Even if your not a student, I would check some of their other offers imo.

[–]Ragnarotico 7 points8 points  (1 child)

Chase Freedom is a very good card. It has bonuses that rotate every quarter (3 months) and are generally not BS ones either. For Jan - March, you get 5% on gas stations as well as internet/cable/phone bills. That's stuff you use every month and all you have to do is put it on the card to get 5% back!

[–]itswhatyouneed 3 points4 points  (0 children)

Also 5% on all mobile wallet transactions. Samsung Pay works nearly everywhere.

[–]XinTelnixSmite 1 point2 points  (0 children)

I'm at the "I'll be dead by the end of the year" point.

It isn't fun. Stay motivated.

[–]Casten_Von_SP 19 points20 points  (0 children)

To build on this and some of OP, the best time to plant an oak tree is 20 years ago. The next best time is today. As of now, I'd put less focus on doing the small things right and just getting started. If you don't pick the exact right card, no biggie. Get another one in a year or two when you have some experience and know more of what you're looking for. Don't pick exactly the right fund for ira? Reallocate when you figure it out. The big key is to start- which by paying your student loans already is a great start.

[–]Wendyandfuzz 1 point2 points  (1 child)

Buy a home and charge a friend rent for extra rooms

[–]Kalkaline 1 point2 points  (0 children)

I like Schwab, they have solid customer service, they give great advice if you talk to their people about finances, they have an amazing website, mobile deposits, ATM reimbursements, they don't nickel and dime you like banks I've had in the past.

They do have their shortcomings, they don't have 2FA on their site just yet, they aren't competitive when in comes to interest rates on savings accounts, and they don't accept cash deposits. If you don't need to deposit cash regularly it doesn't really affect you too much. For interest rates, I put the bulk of my savings in their TIPS ETF for the dividend and keep $1000 in cash so I don't lose a bunch of money to inflation. Just note that when you put money in an ETF it takes about 3 business days to hit your account when you sell. 2FA is a big one these days, and I hope they are working on this soon.

[–]Ctallet8 201 points202 points  (58 children)

Everything you've said is pretty on track. I would focus on trying to get your income up. Did you finish your degree? What's it in?

Edit: For the taxes, just use h&r block's online free tax software. For your purposes, it should be able to do everything and it will walk you through each step.

[–]oakbones[S] 161 points162 points  (46 children)

Unfortunately I chose my degree in a field where I’d either get paid peanuts to be an assistant or need to go back for another four years and get my PhD to get a decent income off it. At this point I don’t feel passionate enough about that career path to seriously consider it.

[–]Sc22Fuego 97 points98 points  (3 children)

A bachelor's degree has value, even if it seems like it's not relevant to a particular position. For most employers, a bachelor's in an unrelated field is more valuable than no education at all. You should be able to make much more than you are, especially if you're willing to grind a crappy desk job for a couple years before moving into management.

[–]feng_huang 25 points26 points  (0 children)

That's a really good point. In some fields or companies, having any degree at all checks the box and gets you past HR, and then the department where you actually apply will look at your experience and skills.

[–]houseoftherisingfun 2 points3 points  (1 child)

I agree. My degree got me in the door for the low level, crappy pay job. Within a year, my hard work gave me better and higher paying opportunities.

[–]aiasoftelamon 4 points5 points  (0 children)

Same here AS in Biotechnology. Started packing boxes.

It's been 5 years, and am now working in Pharma Management.

[–]khien3 53 points54 points  (13 children)

What degree if you don’t mind?

[–]SavingsJada 51 points52 points  (2 children)

If you find that you start feeling passionate about your field again, one thing to note is that even PhD students usually get paid more than $12.50/hour!

[–]altheimera 8 points9 points  (0 children)

Depends on the field, STEM phd students get paid, other fields are much less likely to. If your resume isn't strong enough to get into a well-funded school? who knows.

[–]YourUndoing 13 points14 points  (0 children)

Don't underestimate the value of using a degree on your resume in an unrelated field. I'm a software developer and have worked with other developers whose only degree was in psychology or mathematics. If you don't feel passionate about the path you took, try to figure out something you may have more passion for and go for that, even if it seems like your degree doesn't fit. Often it's just getting a foot in the door with any education beyond high school.

[–]-Kyzen- 9 points10 points  (0 children)

Have you thought about getting into the trades? There are two year programs out there that are inexpensive and lead to high wages fairly quickly.

[–]pawnman99 2 points3 points  (0 children)

Seconded. I use TurboTax myself, but any reputable tax software will get you there for 90% of the population.

[–]jack10685 1 point2 points  (6 children)

Another good source for taxes is turbotax, been using it for 3 years and its awesome, super easy to use and guides you through the whole process, plus is free if you don't care for extra features and what not (perfectly capable without)

[–]wirepurple 1 point2 points  (0 children)

At the IRS site, there are free online tax programs for low income people. It is what my son used to file his taxes. I believe he used Turbo Tax to file his federal and state taxes.

[–]the_simurgh 87 points88 points  (2 children)

i wish i had it together as much as you did at your age. here's a few things i had to learn the hard way being out on my own with no support system or any form of financial competency. i'm the only member of my family who has financial competency and i gotta thank the fact it was sink or swim for me and me alone or i might not have ever learned it.

don't be afraid to live below your means.

don't be afraid to wear quality clothing that isn't the fashionable brands.

don't be afraid of coupons.

don't think that being thrifty is a bad thing.

buy for quality at low prices don't sacrifice quality for a lower price.

don't be afraid to get last years top of the line instead of this years top of the line.

and most of all don't think that you can't get name/fashionable brands for severely reduced prices because you can. seasonable sales, promotional sales, clearance sales, price comping, coupons a world of avenues to decrease the prices of fancy things.

[–]oxygencube 11 points12 points  (1 child)

I've heard it summed up, 'live like nobody now, so you can live like nobody later'. I'd much rather travel and own a nice home later in life than have a closet full of the latest fashion.

[–]b1ggachigga 2 points3 points  (0 children)

"Live like no one else now so later you can live like no one else." - Dave Ramsey

/r/daveramsey 🤗

[–]jtunzi 114 points115 points  (4 children)

Being financially responsible means:

  • Set financial goals for yourself (pay off debts, saving for a car/house/marriage, saving for retirement, etc.)
  • Make a plan (ie budget) to achieve those goals
  • Track your expenses to make sure you are meeting the plan, adjust as necessary

So far it looks like you are in good shape since you have a plan to pay off your debt and some savings.

Keep about 6 months worth of expenses in your savings in case you lose your job, otherwise put the rest towards paying off your loans, starting with the highest interest rate first.

This is minor, but you can get a phone + plan for much cheaper than $110/month. You're currently spending 9 hours of your life each month just to pay that. There are probably better ways to spend that time/money unless it's a big part of your lifestyle.

I recommend opening a CC and using it like a debit card. This will build your credit up, give you a little extra in rewards, and won't cost you a cent in interest or fees if you use it responsibly (set it to auto-pay the full balance every month). Citi double cash has the best rewards rate on all purchases (2%), so I recommend that.

Creditkarma, Turbotax, H&R and others have online tax filing applications you can use to file your taxes. At the most basic level, you have to fill out this form using these instructions and send it to the IRS. The above applications will do that for you in a much more user-friendly way, but you can try it manually too if you are interested in learning how it works. If you live in a state that has income tax, there will be an equivalent form and instructions per your state. My guess is you will most likely be taking the standard deduction plus the student loan interest deduction (line 33).

[–]oakbones[S] 16 points17 points  (2 children)

Thank you so much! Looks like great advice.

[–]enzobanez 15 points16 points  (0 children)

Just to add on...a 6 month emergency fund should be the first thing you think of building up to cover costs of jobs loss (ie you can cover rent/food and live frugally for 6months on it) and/or of major inconvenient but necessary expenses like car/home repairs if you have them or emergency medical treatment. I highly recommend moving this fund to an online FDIC insured savings account (like Ally Bank) separate from your likely brick and mortar checking account bank as you will get a slightly higher interest rate and the minor inconvenience of transferring funds between banks is a nice psychological barrier to ensure you only use it for emergencies.

[–]Newcastle2 36 points37 points  (23 children)

Checking- open up a Charles Schwab high interest yield account: -no monthly maintenance fees -no minimum balances -unlimited ATM reimbursements worldwide -no foreign transaction fees. (Also, there’s a $100 sign up bonus, just google “Charles Schwab checking refer”)

Savings- open up an Ally Bank savings account 1.2 APY which is one of the best rates around.

Roth IRA- open up an account at Betterment, they’re a robo-advisor firm and will allocate your contributions appropriately amongst low cost ETF’s and have many features such as Tax Loss Harvesting, Auto Rebalancing, etc. which will negate the low management fee. (Disclaimer: I have a reference link if interested, but I am not advising this for my benefit)

Out of the 10k in savings, max out your 2017 Roth IRA contribution of $5,500. Leaving $4,500 in your “emergency fund” which should be plenty for now. Set up auto deposit to your Roth IRA, even if it is just $10/month.

Nice job on your SL contributions, over time you will be able to save a lot in interest.

As for credit cards, go for a no-annual credit card, such as the Chase Freedom Unlimited. I would caution against the citi double cash back because you don’t receive a $150 sign up bonus, basically equates to $10,000 in rewards on a 1.5% cash back card.

Lastly, change your fixed costs such as cell phone plan. There are much cheaper options.

[–]TheSpiritofTruth666 4 points5 points  (1 child)

Schwab does a hard pull on your credit and has strict requirements.

[–]Newcastle2 2 points3 points  (0 children)

Credit inquiry will disappear after 2 years, does not sound like OP will be applying for a mortgage, also OP has been on time with SL payments so credit is already established.

[–]Rickmasta 1 point2 points  (4 children)

Any reason why you suggest Schwab Checking over Ally?

I know when you look at both checking accounts individually, the Scwab account is better, but for the Sake of having your accounts in one place and easily transferable. Two main things Ally checking is missing are foreign ATM Fees reimbursement, and the unlimited reimbursements (vs $10/m limit). If those two aren't a huge concern, then I'd open both the Savings and Checking at Ally for convenience.

[–]Newcastle2 3 points4 points  (0 children)

Thanks for the comment! My friend actually has both Ally checking and savings and is very happy. Worth noting, Ally has great customer service, and I don’t think I’ve incurred $10 ATM fees in the past month, let alone 6 months!

However for me personally I like separating my checking and savings between two different institutions because psychologically I feel poorer. That is because I won’t see my savings amount every time I check my checking account. Also my savings is less accessible (not able to transfer funds from savings to checking in seconds, however accessible within 3 business days) which will make me take a couple of days if my impulse purchase is really worth dipping into my savings etc. Hope this is a suffice/somewhat rational reasoning! I do guarantee that I do feel more poor not seeing my savings conjointly with my checking, and has passively stopped me from impulse purchases.. thus saving me $$$!

[–]charkra 1 point2 points  (2 children)

Can I take it a level deeper and ask why Ally over Alliant (another bank recommended by this sub)? Just seems like it has everything Ally does but more (0.65% on checking, 1.3% on savings, $20 reimburse for ATMs). Is there something about Ally that set them apart?

[–]Rickmasta 1 point2 points  (1 child)

Well back when I was doing my research and choosing between the two, Alliant's mobile app & online banking were atrocious. This was about 2 years ago, so it has probably changed by now. Not a big deal to all, but it sort of was for me. Especially for a Financial Institution with no (or inaccessible) B&M locations.

Also, I'm not sure if Alliant provides free ACH transactions. but it's one of the biggest benefits to Ally for me personally. Free incoming and outgoing ACH. I basically completely automate my savings/bill payments using Ally's free ACH transactions.

[–]charkra 1 point2 points  (0 children)

That makes sense. I've found it to be just fine so far. I've always heard Ally has great user experience. Thanks for the informative response!

[–]CondorLane 108 points109 points  (29 children)

God I would kill to have 10k in savings (also 22)

[–]hoesandketones 91 points92 points  (1 child)

I’m over here getting excited to find a quarter on the ground.

[–]juggy_11 34 points35 points  (3 children)

Well, don't do that. There are ways to save 10k without murdering someone.

[–]Passionix 18 points19 points  (2 children)

Should I maim someone? 23 here, am also curious to find this 10k in savings.

[–]krisgonewild1 3 points4 points  (1 child)

Getting maimed is where the real money is at

[–]YourUndoing 13 points14 points  (0 children)

One thing that my wife and I do that has helped force us to put money aside is if you get a regular paycheck (weekly,bi-weekly,etc), when you get paid, take everything that was not already accounted for in your checking (like pending stuff, bills you know will come out but haven't yet) and shift it to your savings account. I do this every two weeks and then treat the savings like it doesn't exist. At first I noticed that I could only move over a small amount. But doing this has compounded faster than I thought it would and also made me re-examine my spending habits. Now I almost treat it as a game to see how much money I can move over to savings at payday. It's like I've gamified my finance. Now I just need to consider moving it from savings to something that will actually work a bit harder for me than my piddly savings interest rate.

[–]Jamjam3634 19 points20 points  (15 children)

To be honest, I'm 23 and have 10k in saving and it gives you more anxiety than you would imagine. You can't blow it all in a car, cause than you'll be broke, but it's not enough to buy a house because at such a young age it's hard to get a loan. At least that's how I see it. Plus, being 23 with that kind of money and not having full job security is scary cause even if I were to get a house and I lose my job I could lose the house. Idk but 10k is not a lot when being a starter in life and not being able to rely on parents cause they're broke so 10k is your only safety net.

[–]hughmungus69lol 44 points45 points  (0 children)

First world problems

[–]cannakitty 23 points24 points  (1 child)

Jesus Christ just get it in like gold bars or something if this is causing you that much anxiety

[–]Jamjam3634 1 point2 points  (0 children)

This isn't "extra" money I have layin around, his is my life savings. I don't own a car or a house. Taking the wrong steps could leave me broke and in serious debt since my job/income isn't stable.

[–]xatrinka 26 points27 points  (6 children)

Having $10k as your "only" safety net gives you anxiety? Plenty of people here have no safety net, you know.

[–]mynameisadrean 8 points9 points  (4 children)

Comparative anxiety doesn't diminish her feelings... I also have 10k in savings and it gives me anxiety not knowing how to proceed with it. I come from an impoverished background so I was never taught what to do with substantial amounts of money. It's like being lost at sea and being able to see land ahead. You have all the necessary tools to get to that land, but you feel like you'll make a decision that blows you way off course and steer you back to where you started from.

[–]truejs 7 points8 points  (1 child)

Are you asking for advice? Assuming you are, here is mine. Have you any debts, and how stable is your income?

As a general rule of thumb, paying off debt should be your number one priority. Assuming your income is stable, leave a small amount in savings ($2-3k tops), and dump the rest into debt. All your extra cash each month goes into debt. Temporarily downgrade your lifestyle. If you end up needing a new car, purchase a cheap one in cash. Stop investing until your debt is gone, unless your employer offers a 401(k) match. Get the match and nothing else for now. You can also give up the match temporarily, but that’s a controversial attitude.

When your debt is gone (if you had any), build an emergency fund of 3-6 months’ expenses in your savings account. Also begin contributing 15% of your income to retirement savings, either a 401(k) or a Roth, or both if you make enough.

When you have a solid emergency fund, save a house down payment. This might take a while; you’re going to want about 20% of the price you want to pay. When you’ve got the down payment, purchase a home. Make sure to get a 15-year, fixed rate mortgage.

At this point, do you have any children? If so, there are tax-free accounts called 529’s. Start saving some money each month in those. If you haven’t got any children, put all your extra money into either your mortgage, or good growth stock mutual funds, depending on how risk-averse you are. Try to pay your home off early by contributing more than just minimum payments to the mortgage.

When your home is paid off, max out all retirement accounts, and invest remaining money in mutual funds, real estate, or other straightforward growth assets. Never put your money into anything you don’t understand.

The whole time you’re doing this, avoid going back into debt. Don’t finance a car or use same-as-cash purchases. These types of things tend to make your money shrink rather than grow. Start thinking of yourself in terms of net worth; try to own assets that grow in value, and use your money to acquire more of these assets.

Also - avoid whole life insurance policies. Term life is your best bet.

[–]godofwar567 4 points5 points  (3 children)

How big of a mortgage loan would you be looking for?

[–]Richerich2009 52 points53 points  (5 children)

Why is it going to take you 10 years to pay back $27K in student loans at $600 a month? That will take you at most 5 years. Also how much are you saving every month to have $10K in savings?

[–]rolledrock 28 points29 points  (4 children)

Yeah $600/month for 10 years is $72,000 haha

[–]tuneificationable 9 points10 points  (3 children)

It is possible that they meant that they have $27k left in student loans, not total. Plus you have to factor in the interest. If you graduate with 27k in student debt, you end up paying a lot more than 27,000 dollars by the time it's paid off.

[–]rolledrock 24 points25 points  (2 children)

$45,000 in interest? Ouf

[–]missedthecue 5 points6 points  (1 child)

Maybe it was a typo and they meant 72 instead of 27

[–]yayhindsight 2 points3 points  (0 children)

as much as i hope its not a typo, the payment plan op has unfortunately indicates as much.

also makes sense tuition wise; 72k would be 18k per year for 4 years, seems in line with prices these days without scholarships/grants.

[–]homahomanukanukanuah 61 points62 points  (0 children)

You're more financially stable than most people my age and I'm in my thirties. You're definitely more financially stable than I am haha haha now I'm crying

[–]ScottEATF 17 points18 points  (0 children)

What's the rate on your loans?

[–]nigirizushi 17 points18 points  (3 children)

Where is the best place to open a credit card?

Personally, I prefer Chase and Citi to Capital One. Chase Freedom would be the one I'd get.

Should I put my utility bills on it to build credit?

Yes, unless there's a a credit card surcharge. If you have to pay 3% extra to pay with a card, don't do it. Credit can be earned without ever paying a dime.

Is Charles Schwab a good place for a total financial newbie?

Yep. I think Vanguard has a slight edge, but it's not a big difference. Put it in a low fee index fund / target fund and forget about it. Do not track it monthly.

What am I not accounting for?

Emergency fund? Leave 3-6 month of funds in a high yields savings account, like Ally.

What do you wish you had known at my age?

Never pay a cent of interest on credit cards. Pay it off when your statement closes.

Getting 2-3 cards helps your credit history in the long run. Having only one can slightly lower your score. Which is fine, until 10 years from now, you open the second one and the average age of your cards drop significantly.

Just cut the second card up if you can't control your usage. If you can, use the one that have better returns, e.g. one card has 3% back on gas, one is 2% everything else.

[–]Invisibl3hand 15 points16 points  (5 children)

I always wonder how people with this level of debt + income have that much in the bank???

[–]TheScherff 13 points14 points  (4 children)

Same. I’m in a similar boat but with ZERO debt and saving up $10k would take me forever. I’ll never understand how someone my age can have that much money already.

[–]MrFacePunch 6 points7 points  (3 children)

I have about the same amount saved from ~8 months of working at my first job out of college. On the other hand I am not currently paying anything toward my 20k of student loans because I'm pursuing a second Bachelors.

[–]TheScherff 2 points3 points  (2 children)

My issue is that I have to work a job making a bit over $10/h, have to pay living expenses, go to classes, and still manage to save. It’s not realistic at all lol.

[–]MrFacePunch 1 point2 points  (1 child)

Yeah the only way to save money is to keep your expenses the same while increasing your income. But, you can't just go tell someone "make more money"

[–]TheScherff 1 point2 points  (0 children)

It feels like this sub thinks that’s an acceptable thing to tell people. Like getting another job to make more money isn’t feasible while in school for me at least. I already work 40-50 hours a week. $10/h is pretty decent where I’m at for a college student. The solution “make more money” just doesn’t translate well to the real world.

[–]anon1563 34 points35 points  (5 children)

As for credit cards: I would recommend the Citi double cash card. 1% cash back as you purchase and another 1% as you pay off and that’s in everything. It’s almost like getting a 2% discount on everything. My dad put a down payment for a new car on it because he knew he would get a pretty good amount back with it.

[–]Newcastle2 19 points20 points  (4 children)

Good card, however your first $10,000 spent would then only fulfill the sign up bonus of a chase Freedom Unlimited.

[–]zer0cul 10 points11 points  (2 children)

If you get the $150 offer and add an authorized user for $25 the total bonus is $175. I just googled it, not sure if there is a better offer.

To add to what you are saying, even if you spent $10k the double cash would earn $200, while the Freedom Unlimited would earn $150 plus the $175 bonus = $325. The point when double cash wins is at $35,000 spending and higher.

[–]asianaaronx 10 points11 points  (0 children)

Sounds like you're doing a lot of stuff right. Maybe try to find a side hussle to get ahead more. Being a valet is a really good way to make quick cash and have a flexible schedule.

Also, you can hack off $70 from your phone bill by going with another carrier. I have project FI and it's $40/mo for 2gb +$10/gb if I go over.

Schwab is good. I'm about to open up an IRA with them myself.

For credit cards, the Chase freedom card is good. 1% cash back is a nice perk. Just start small with how much you charge to it to gauge your restraint. Pay it off every month and your credit score will rise. Try to get a credit limit increase whenever you're offered one to increase your debt to equity ratio.

Edit: For taxes, tax act online is what I use. It was recommended to me by my ex-GF who was an IRS agent. Lol.

Basically, just get your w-2 and log into tax act and it's plug and play.

[–]BlipOfConsciousness 20 points21 points  (0 children)

I know its easier said than done but you need to find a way to be making more than $12.5/hr. You can have all the discipline in the world by cutting spending but unless you have the cashflow to make things happen you will be stuck or your goals will take forever.

[–]CapableCounteroffer 23 points24 points  (5 children)

What phone plan do you currently have (provider, call/text/data amounts) and is your phone on contract? You should definitely look to cut down that bill which should be easy with a bit of research.

[–]hammerDergins 10 points11 points  (2 children)

I bet that phone plan includes a monthly payment for the phone

[–]CapableCounteroffer 2 points3 points  (1 child)

High chance it does. He could also be on a legacy plan, my parents were on a plan paying ~$65 a month each for a limited amount of data, I switched them to a plan on the same service for $40 a month with unlimited data, so sometimes its easy to save money if you look for a better plan even on the same service.

[–]nuevedientes 6 points7 points  (1 child)

Agree, this was my first thought - that phone bill sounds awfully high! TMobile is $70 all inclusive (or even cheaper if you go in on a family plan). My family is spread out around the country and we're all happy with the service.

[–]unevolved_panda 13 points14 points  (2 children)

As far as your taxes: Your employer(s) will send you a W-2 in the mail. If you worked more than one job in 2017, you'll get more than one W-2. If you don't want to wait until it's mailed to you, sometimes you can print them it yourself from your company's intranet, but you'd need to ask your supervisor about that.

Then, you fill out a form. Unless you have assets you haven't mentioned here, you will only need one, Form 1040. It is here, both the forms and the instructions on how to fill it out: https://www.irs.gov/forms-instructions

(Adding: You will probably also need to show that you had health insurance in 2017. I don't remember how this part works because I haven't done it enough.)

Basically, you list all your income (including, if applicable, business income or interest earned if it's above a certain amount). Then you tell them all the ways in which you qualify for having your TAXABLE income reduced, and figure out what your tax burden is. Then you tell them what you've already paid (what's been deducted from your paychecks) in 2017, and then either you pay them the difference or they pay you.

After you file your federal taxes, you will use your adjusted gross income figure to fill out your state tax return. YOU NEED TO FILE BOTH FEDERAL AND STATE TAX RETURNS. My state return (Colorado) is very similar, but also simpler, than my federal return.

Sometimes public libraries or local universities will have free tax help. It's worth calling to check. H&R Block also apparently has free filing, but for a return as simple as yours, I think you can do it without help (or, if you get help, make sure that you pay attention to what they're doing so that you can do it next year). I've used TurboTax to e-file for years, and that's always worked for me. You can also mail it in through USPS. There's also a section on irs.gov where you can see what software/companies they recommend that can do e-filing. There were a bunch of people complaining last year that Credit Karma's e-filing system was completely borked. If you're e-filing, make sure you choose a company (like TurboTax, which is owned by Intuit; or H&R Block) that has a track record of being trustworthy and not sketchy, because you're responsible for your tax return and your tax burden, even if you let someone else fill out the forms for you.

As for learning to be financially responsible: LEARN TO BUDGET. That is my #1 thing. Learn how to make sure you're staying within your means, and not just taking on debt to buy things.

Edited because I apparently say "apparently" more than is necessary.

[–]agorathrow8080 6 points7 points  (1 child)

He can go online to liberty tax and file for free. It literally walks them thru each peice, will take about 10 mins. The state will.probably charge 19$.

Good explanation, but not really needed for 25k a year and no deductions. Will walk him thru the healthcare to.

I do.mine and my wifes familys in about an hour every year. I have no idea.hoe basic cpas survive if they dont get a job with a huge.company when so many people can do it easy and free. Shit mine are like 60$ just beacuse i make way over the limit and have deductions for houses, still.only takes 10 mins.

[–]unevolved_panda 1 point2 points  (0 children)

I knew it was a lot of detail for a pretty simple (for him) process, but I figured OP might be like me and need new processes explained in a lot of detail, especially if it feels like high stakes process. I've been filing sub-$25k tax returns for most of my adult life and can't answer any of the PF questions about real estate or investing, so I was really excited to get a question I could answer in detail.

Also until a couple months ago I worked for a public library, so I'm very used to Tax Return 101 questions.

[–]Sikh_408 12 points13 points  (8 children)

I will ask an off topic question. What did you study for in College? And which part of the US are you from?

[–]oakbones[S] 24 points25 points  (7 children)

Communication Sciences and Disorders. Basically the precursor to audiology or speech pathology, but I’d need a PhD to practice.

[–]Kenzieleerock 24 points25 points  (1 child)

Im pretty sure you only need a Doctoral Degree to practice and be an AuD. In addition to that, you need your license(s) and certification for whichever state you plan on working in. I currently work in a Hearing Center with 5+ doctors, and only one has perused a full PhD.

If anything, you can always get your dispensing license for hearing aides and see if that is an avenue you want to peruse! I know at the practice I am at, one of the front office girls was put through the licensing process and she was able to see fit patients and made more than 12.50 at least!

[–]oakbones[S] 16 points17 points  (0 children)

I'm pretty sure you're right on that. I will keep this in mind as an option! Thanks!

[–]fizzik12 4 points5 points  (0 children)

What do those PhD programs look like? Getting that PhD might pay about what you're making (the grad students I know are getting stipends and housing subsidies that are in the same ballpark as your yearly income, but they're all in the hard sciences, so I'm not sure if the comparison holds) and would obviously be an investment in your career. If practicing is something you ever want to do, you really ought to consider getting started on a PhD program within the next 5 years or so.

[–]vanessy 2 points3 points  (0 children)

You only need a Masters to practice as an SLP. The program is 2 years.

[–]RagaKat 2 points3 points  (0 children)

Should just need a masters for speech pathology, only takes 2 years.

[–]MyIndianaLife 6 points7 points  (0 children)

The best credit card is one that gives rewards in terms of cash back (mine attaches a check soon as the rewards equal $100. I usually get about four or five checks per year and I use my CC for almost everything). The important thing is to pay off the CC every month to avoid interest charges. If possible, find a card that doesn't charge an annual fee. If you are going to need to use air travel, then it might be better to get a travel rewards card instead, and the better ones I've seen usually do come with an annual fee. Again, pay it off every month.

For people in your generation, I don't necessarily push saving in retirement accounts that are basically controlled by the government. For now, all these nice benefits might apply (tax free growth, withdraws are tax free for some accounts, some withdraws count as income and you pay income taxes, etc.). These rules can be changed at any given time. Plus, it is better to have a large sum of cash at the ready. Currently Roth IRAs allow folks to pull out any deposits made penalty free. The problem is that the company you use might charge for a withdraw. So I always tell folks to use Roth IRAs as sort of an emergency fund and a retirement savings vehicle. Just keep detailed notes and say after you have $30K in deposits with say $7,000 in gains, make sure if you need to take $10K that you declare this was income that had already been taxed.

You are already ahead of many. That being said, I suffered from financial anxiety in my younger years. Sure, my life turned out OK, but I have a lot of regret with not going away to college, not going out with friends more (bars, clubs, vacations, weekend trips to amusement parks, things of that nature). I love the US West but I put off visiting this are for many, many years. It was stupid to focus so much on money, wanting to get a house ASAP, etc.. I have an older relative who has a decent amount of money and he is late 80s with failing health. He recently made a comment to another younger relative about having all this money yet now not being able to enjoy it. There is a very good possibility he won't be able to leave it to certain next of kin as he might be needed long term care which could eat up all his savings unless he passes away quickly. There is something to be said about living life.

[–]sanskimost 5 points6 points  (1 child)

if you can, try minimising your phone bill.

[–]mrbiggbrain 27 points28 points  (19 children)

Every dollar you put to your IRA is one you could be paying down debt with.

I would focus on my student loans and having an emergency fund.

[–]nigirizushi 20 points21 points  (13 children)

Unless his loans are like 12% interest or something, I'd 100% argue against this too.

Putting $5k a year from 18-28 is better for your retirement than putting $5k a year from 35-65. Them compounding interests!

He likely has undergrad federal loans, which are only about 2.5% interest.

Edit: Yes, I realize now that they have since gone up to about 4%. Point still mostly stands.

[–]RagnarDannes 23 points24 points  (3 children)

Student loans at 2.5%? That doesn't sound believable. My federal loans were at 6.9%.

I'd take the guaranteed 6.9% every time.

[–]Trancefuzion 13 points14 points  (0 children)

Right...I have no idea where these low rates come from. My federal loans are around 7%, my private loans varied from 9-10% until I refinanced and got them down to 7% as well. I thought I did good, but shit I guess I didn't.

[–]JimTheFishxd4 5 points6 points  (0 children)

My undergrad loans are around 3%

My graduate ones are around 7%

[–]FluffyCuntPunt 5 points6 points  (1 child)

My rate is 4.5% :(

[–]nigirizushi 3 points4 points  (0 children)

That's getting into the hairy ambiguous zone of which option is more beneficial. IRA probably is slightly better, if you can weather any decreases that may happen before you pay off your loans.

[–]DirtyPenny1984 3 points4 points  (2 children)

When did you graduate? I had loans as high as 6%. Paid those off as soon as possible. I believe there are some my age with loans with even higher interest than that.

[–]nigirizushi 0 points1 point  (1 child)

For federal stafford? It's currently at 4.5%, and was 2.x% when I graduated. I had 6.x% rates on top of those, but those weren't federal stafford.

Edit: Sorry, it's actually unsubsidized vs subsidized.

[–]RagaKat 2 points3 points  (1 child)

which are only about 2.5% interest.

Damn, what loans did you get? My lowest undergrad loans are 3.4 with some being 4.5 and 6.8%.

[–]littleedge 1 point2 points  (1 child)

My federal loans over six years range from 2.something% to 6.9%. Most are 4% or more.

[–]SalsaRice 9 points10 points  (4 children)

I'd argue against this, in OP's case.

At only 22 and with such a low income, $5500 in an IRA would lower their income substantially, and they'd get back a large amount of the taxes they paid last year. Also, given how young OP is, the extra few years in the market (by investing now) would greatly increase their retirement vs waiting a few years for until after the $27k debt (That OP's parents are 66% subsidising anyway).

That $5500 would OP alot more good in an IRA this year, than reducing their StuLoan from $27k to $21.5k.

That would still leave OP with a $4500 e-funs in their savings account.

[–]SpyPirates 11 points12 points  (0 children)

Would argue that this is bad advice.

Regarding the taxes, it's really not super important to worry about lowering your taxable income when you make $11.50/hr. In any event, student loan interest is tax deductible on top of the standard deduction.

As for putting money into the market at a young age, it always depends on the interest rate of the loans regardless of how old you are. If the loans are >4%, most people would definitely recommend paying down debt first. 4%+ represents a guaranteed ROI, and you cant compare historical stock returns with risk-free investments. (If they're < 3% interest, sure investing is fine)

[–]ScottEATF 7 points8 points  (0 children)

That's only if it's a traditional IRA, and then they'll pay the taxes on the withdraws later. Given there low income now it would stand to reason that at retirement age they'll be in a higher tax bracket then they are now so they'd be better off with a Roth IRA and avoiding taxes later.

[–]Greenie_In_A_Bottle 1 point2 points  (0 children)

That being said, this also depends on the interest rate of the loans..seeing as they're student loans, they shouldn't be exorbitant, but if any of them are private loans they might have very high interest rates.

[–]yeasurewhateverokay 10 points11 points  (2 children)

Holy moly as a 23 year old who considers herself relatively fiscally responsible, I am blown away by your 10 Gs in savings. You’re doing great already!

[–]kaisuisen 5 points6 points  (2 children)

I slightly don’t get it, but in US if possessing of credit card and credit bills = you good for society?

[–]GingerStrength 3 points4 points  (1 child)

Doesn't really affect society. But if you have a credit card(s) over a length of time and never miss payments. Then your credit score will increase. I got my first card as a freshman in college 7 years ago and have added a few that I use for the card benefits (Amex Plat and Delta Skymiles). They've helped build my credit score to 785. They aren't for everyone but if you can manage them they can be a great tool.

[–]justine7179 5 points6 points  (0 children)

Good on you for being responsible!! Never too late. I'm 22 as well, and first got introduced to finances when I was 17 working for Starbucks since they give you a 401k. You don't have to, but I'd suggest starting a basic 401k just to get ahead of the game and feel like a real adult lol.

What got me started was a simple Capital One credit card, and from there you'll build a little credit. Pay it off immediately (I do autopay because I can't remember shit) every month, and make a very simple budget. Nothing crazy, but just check how much you spend on rent, gas, school, etc. The basics will get you prepared for upcoming events in the future.

Filing taxes isn't too hard. You can just fork out like $30 like I do and use Turbo Tax or save your money and go a different route. It's just getting your W2 form from your employer, answering questions, filling in the blanks to the best of your ability, and then you're done. That refund money that you'll probably be getting back is already yours though, keep that in mind!! Do not use it as willy nilly spending money, as much as you'd want to. So many people are like "woooo a bonus pay check!" But it might be more wise to put it in savings or use it to pay off student loans.

TLDR: Get a Capital One/basic credit card, pay that shit off, make a simple budget, use Turbo Tax to file taxes, save that money, prosper.

[–]Tacothechihuahua 4 points5 points  (0 children)

Good job getting your head right at 23. Many people don’t see the light for decades later.

Avoid all debt and pay it off. Look into Dave Ramsey. It’s not that hard for even people of modest means and imagine how much wealth you could build by not having debt payments. It works, even if it seems far fetched to outsiders or people just starting on the journey.

[–]STA_Alexfree 9 points10 points  (0 children)

I'm 28 now, but I was almost exactly in the same situation when I was 22. You sound pretty damn financially responsible to me. One choice I made was looking at my student loan interest. It was so low that it made very little sense to pay it off early. I put the extra money into my 401k.

As for credit cards, I would just get a $300 limit one and pay it off each month. Eventually they'll increase the limit and your credit will go up.

TBH, over the years I started making a lot more money and it became MUCH easier to set aside money each month, compared to when I was 22 and just getting by. You have good habits now it seems, as you get older it'll get easier to save.

[–]FatchRacall 8 points9 points  (2 children)

First thing I'd do is switch my student loan repayment plan to be the lowest possible monthly payment, then use the avalanche method to pay off the highest interest rate loans first. Make the same payment, but target which loans to pay first.

Take that $10k and max out a Roth IRA for last year (before April), leaving you $4.5k savings as an emergency fund which should be plenty. Talk to your folks and see if they'd be willing to help you out in an emergency, if so, put some of that fund into your debt. Reduce your phone bill, $110 a month is incredibly high for a single line. Pick up a second income stream/side hustle ASAP. Whatever interests you.

Taxes, eh.. Gonna have to ask someone else. In general, tho, you can use a free(or cheap) online system. I know people who swear by the 'in person' tax prep services because they do all the work. Really depends on your situation, tho.

edit: Credit card, I'd look around at who has the best signup deal/rewards program/etc and go with them. APR only matters if you don't pay off the card every month, and you wouldn't forget to do that would you?

[–]heidurzo 2 points3 points  (0 children)

What interest rate of you got on that debt? You say 600 a month for 10 years but that's $600x12x10=$72,000, almost 3 times as much as your current amount.

[–]mtenl 2 points3 points  (0 children)

Holla holla I’m 22, I got the same degree and don’t wanna pursue it any further either!

PS- I have the discover it card and love it :-)

[–]badboybilly42582 2 points3 points  (0 children)

Another thing that might offer some insight is to track where every single dollar is going and how much. This will give you a holistic view of your expenses. The benefit of doing this is it might surprise you how much your spending on X per month.

For example, lets say you eat out a lot verses cooking at home. You might not realize how much money you're spending but once you see it in a spreadsheet, you might be blown away at what you're spending. Cut back and eat more at home and save some $.

[–]seansh7 2 points3 points  (0 children)

Go with index funds all the way. Check out Betterment.com for an IRA and even a safety net fund. Betterment has really low fees especially for someone just starting out. The big banks are going to charge you high fee for investing.

Also read mr. Money Mustache as much as possible.

The fact that you're posting here is a strong indicator that you'll do just fine. Keep up the fine attitude!

[–]bbreslau 2 points3 points  (0 children)

Be responsible. Don't borrow money you can't pay back, don't overspend and don't gamble.

[–]snuggles91 2 points3 points  (0 children)

Prime directive has a really good basic flowchart to follow. You should check it out :D

Edit: In terms of credit cards, unless you have something specific in mind for rewards ie. travel a lot etc, just find a card with the best cashback rewards percentage for your first card.

[–]Agent-390 2 points3 points  (1 child)

You should attempt to pay off your debts in order from smallest to largest (look up snowball method) and then get rid/don't get a credit card, and then pay cash for everything. Budget weekly/monthly

[–]wattowatto 3 points4 points  (2 children)

$110 for the phone bill!!? What do you do on your phone mate?

In another note, give every dollar a job and stay committed to your goals. Give YNAB a try, can't recommend it enough!

[–]seansh7 1 point2 points  (1 child)

YNAB is fantastic!

[–]wattowatto 1 point2 points  (0 children)

It sure is a massive reality check for sure. Once you stop fooling yourself and let it show you the painful reality of your financial life, you can never go back to the madness prior to using it.

I have been a user since version 2.5 and I am not giving it up anytime soon!

[–]BankshotMcG 3 points4 points  (0 children)

Speaking as a formerly frugal 22yo…slug all the savings you can into an Exchange Traded Fund (or, if you must make my mistake of trying to time the market, get a 3% Max Checking at LMCU until the next market correction, THEN go all in). Live on a shoestring and you'll never notice much difference between a 22yo who doesn't have money and a 22yo who keeps their money out of reach. Now is the time to find the adventures you really remember, because soon enough all your friends' idea of fun is going to shift from drinking at a bonfire to wasting $90 on brunch. (LPT: always counter the brunch suggestion with "come over and bring some vodka. I'll make eggs and screwdrivers.")

Since you've got debt, pay that off obviously to avoid APR (though I think student debt is exempt? I was lucky enough to dodge it).

Your phone bill is killing you. Switch to Ting or Google Fi to get it down to ~$30mo. That's like a grand back free every year.

IRAs are great! If your job offers a 401k, take it. Most companies that do offer a match, and that's free money. Stick it in Vanguard or some other low-fee, low-cost ETF. In fact, stick it in Vanguard while you research whether there's a different ETF you'd rather use. VSTAX is a good one.

Your rent sounds decent. Stick with that.

Credit cards: Only open these up if you KNOW you can pay them off in full every month. 2% back every month via Citi Double Cash (or you can go higher in category based cards like AmEx Blue, Uber Visa) will HELP you, whereas carrying even a tiny balance to the next month will ding you in the double digits.

Most cards don't offer referral codes, but r/churning might have some.

Filing taxes, since you have a single source of income at a moderate rate, is probably best done yourself at TurboTax. As you make more money from more sources of income (e.g. investments, freelance, etc.), consider a friendly, independent accountant who will crunch everything for about $50 to $150. DO NOT go to Liberty or H&R Block or anyplace that charges you $50 to $100 per form. It'll devour any refund you get.

(In fact, once you get savvier at this, look into not getting a refund. It means you kept the excess cash and built interest on it all year instead of letting John Law collect your 3% APY for himself.)

Okay, that's all I've got. You're doing great! Look forward to raising a mai tai to you on the beach in 20 years!

[–]Kozio_ 3 points4 points  (2 children)

27k of debt making $12.50... While Walmart employees are making $10 🤔

[–]skydump427 3 points4 points  (3 children)

27k in student debt to make $12.50/hr. That pretty much sums up America in 2018.

[–]fitmindfitbody 1 point2 points  (0 children)

$110 for a phone bill? Seems pricy if that is for only 1 phone. If you are only paying for your phone, switch to H20 Wireless or Google Fi.

If you can crank that 110 down to 40 a months thats $70 a month in your pocket or $840 a year

[–]ejb85 1 point2 points  (0 children)

As far as the taxes, see if there's an IRS sponsored VITA program near you. At your income, you should qualify to have a volunteer complete and file your taxes for free. You can also file online yourself for free, the software will walk you through each step!

[–]Mindraker 1 point2 points  (0 children)

$110 for my phone bill.

Try going on a family plan. I pay $0 because my parents got a plan where they got three phones with unlimited talk & texting between these three phones (as long as it isn't roaming.)

Almost all of my phone calls are local or to my parents. So I just piggyback on their plan and pay ZERO for phone.

[–]WTF_HomeSlice 1 point2 points  (0 children)

I opened my IRA account with Schwab as a total financial newbie. I was doing a lot of reading beforehand however, and I still constantly read to try to make sure I am investing wisely.

I think it is a pretty good place to open an IRA.

One thing I liked about Schwab was that I had no money when I started, and as long as I set up automatic contributions of $100/month, there was no minimum to open an IRA.

I set up automatic payments of $458.33/mo. to ensure I maxed out the IRA (minus 4 cents).

Schwab has a ton of commission-free, low cost ETFs, which was how I decided to invest.

However, Vanguard is also freaking amazing (arguably better), and I believe has better index fund options. If you are going to go with index funds rather than ETFs, Vanguard might be better. Ultimately, you can't really go wrong with either Schwab or Vanguard.

If you are a real financial newb and you don't really want to spend your free time reading about investing, consider Wealthfront. Wealthfront is a robo advisor with billions of dollars of assets under management and they just got a huge infusion of capital from an investor (more than $150 million as I recall) to continue to build out the service.

Wealthfront does all the investing for you based on algorithms and invests everything in low-cost ETFs with no commission. They actually primarily invest in Schwab and Vanguard ETFs.

Wealthfront does charge a management fee of .29% over the cost of the ETFs, but that is pretty cheap. They don't charge any fee if you have less than $10,000 invested.

You could save yourself the .29% fee ($2.90 for each $10,000 invested per year) by just investing in the same (or substantially the same) ETFs as wealthfront on your own in a Schwab or Vanguard account. However, Wealthfront takes all the weight off of your shoulders in terms of allocation, rebalancing, and tax loss harvesting.

If you want a good set-it-and-forget-it investment vehicle, Wealthfront is pretty great, in my opinion. I opened an account with them and dumped $1,000 in it just as an experiment to see how it performs next to my accounts I manage myself and my Wealthfront account is doing extremely well. My Wealthfront account is actually outperforming my personally managed accounts, but that is because of a fluke of market timing that resulted in an energy sector ETF held in my Wealthfront account that I don't hold in my Schwab account going up by about 20% in just a few months. That ETF had been tanking all year and I just happened to buy at the bottom before it skyrocketed, which was a total accident, not any sort of genius on my part. Otherwise, the performance is very similar to my personally managed accounts.

[–]Harambe440 1 point2 points  (0 children)

Look for cash back credit cards at your local credit union. I have the amazon chase cc for the 5% back on amazon purchases and the costco citi cc for 4% back on gas.

[–]mutemutiny 1 point2 points  (0 children)

paying your own taxes is easy - my wife is a CPA and we itemize deductions but we still use turbotax.

[–]Blazikinahat 1 point2 points  (0 children)

I recommend one website: Mint.com I use it for budgeting and many on this sub will definitely vouch for me as it's probably one of the best websites and phone apps out there. It's made by the creators of Turbo Tax.

[–]lavapasta 1 point2 points  (0 children)

Everyone's advice is pretty spot on, however I haven't seen anyone discuss your phone bill.

My advice would be to reduce that as much as possible. $110 a month is a lot of money when you probably only get about $30 worth of data and minutes/text out of it, if that.

I'm on mobile right now so I can't go into details, but look into cheaper pre-paid options. I believe Mister Money Mustache has a post about it, if not a phew.

[–]michelle061286 1 point2 points  (0 children)

I’m curious as to your thought process behind you saying that your credit card is basically free money, how do you figure that? Also instead of using cash you could use a debit card, it’s just as convenient as using a credit card and you don’t have to worry about being charged interest if you don’t pay the entire balance off at the end of the month. My thought process is basically that if you have to use a credit card to pay for it then you can’t afford to buy it

[–]NimrodBusiness 1 point2 points  (0 children)

First thing, make an XLS-style itemized budget. Regarding credit cards, I love using mine for bills and recurring payments-precisely to build credit. But I’d strongly advise you to use them exclusively for that.

Set your goals, make a budget, and stick to it. It’s easy, and I wish someone had taught me how when I was younger. I’d be a lot wealthier by now.

[–]Munguni69 1 point2 points  (0 children)

Read the barefoot investor. Helped me get my money on track and stopped me wasting so much, it doesn't feel like I'm missing out on anything though.

[–]Harold_fpv 1 point2 points  (0 children)

Watch out for lifestyle inflation if/when you start earning more.

[–]AshTheEngineer 1 point2 points  (0 children)

Good work on saving up and being financially responsible thus far. I've seen a lot of comments on lowering your phone bill and agree 100%. I would look into StraightTalk, Project Fi, Ting (that's what I currently have), and/or a family plan.

Some carriers, like Ting and Project Fi, buy extra bandwidth from major carriers, like Sprint and T-Mobile, for a discounted rate and are able to pass that savings onto customers and avoid requiring contracts. You could easily knock that bill down to $20-$40 per month. If you're currently paying for a phone with a contract, keep this in mind as many allow you to bring over your current device once your contract ends.

Regarding credit cards, Discover and Chase have excellent reward cards with no annual fee. Always pay full on time and keep your utilization rate between 10-30% of your cumulative credit limit. Avoid spending money that you don't have. Those tips will keep your credit score high and your future interest rates low.

Good luck pursuing your Doctorate!

[–]Jylyfysh 1 point2 points  (0 children)

Im jealous of how much more responsible you are than i am :/ coming from a 25y.o who still has her loan deferments, keep up the hustle!

[–]magneticent 3 points4 points  (2 children)

Taxes:

Just sign up for some free tax software, like turbo tax (dont pay for anything). And file your taxes. Here is the thing, the government gives you $6000 in deductions. It's called 'standard deduction'. So donating or any other write-offs wont really help you unless you plan on reaching over $6000 in deductions.

There is also a term called tax-credit, which is usually found for paying back student loans. Which is different. Tax-credits is just that, a credit towards your taxes. Meaning if you pay 3000$ in loans this year, make sure to log it in, because you might get 300$ in credit to taxes paid to the government. For example. If you find out that you owed the goverment 5000$. Your company took out 6000$ for the year. It means you're owed 1000$. With the tax credit of 300$. You're actually owed 1300$.

tldr; Dont worry about deductions, unless they are tax credits, which will probably only be student loans for you.

EDIT: Sorry, I made a typo. changed final 300$ to 1300$

[–]jayrandez 2 points3 points  (0 children)

  1. Make more money

  2. Spend less money

Done

[–]Kythorne 2 points3 points  (3 children)

Wear a condom.

But seriously, ask a credit union or bank to give you a loan to pay off your student loans. I did, and the savings in interest was worth the 30 minute qualification check. Also, ask Sallie Mae or whoever holds your student loans to cut a deal if you pay in full. They did for me.

[–]thecelticknight 2 points3 points  (2 children)

Just tried to do this myself on bad advice - the problem is that most federal student loans already have the lowest rates you can get for these types of loans. I told them about my rates (3.6 for two smaller disbursements and 6.7 for the bigger one) and they were like "... Yeah you're not gonna get much better than that, we were gonna offer (like 11-12 or something)".

[–]lukasmach 1 point2 points  (0 children)

Realize that you are young. Your investments should go into "high risk, high potential" areas such as your education, saving yourself time (= occasionally taking Uber instead of a 70 minute ride by public transport), companies in fields where you anticipate growth and so on.

The biggest mistake would be to be too cautions.

Learn from the mistakes this community did in the "I bought my daughter some bitcoins" thread.

[–]themogul504 0 points1 point  (0 children)

Pay your bills on time. Easy...

[–]Nightman96 0 points1 point  (0 children)

You can start about 10 years ago.

[–]rmiller90 0 points1 point  (0 children)

You're not doing badly already so that's great!

I would actually take that 10K and put maybe 5K-8K against your debt off the bat and use the rest as an emergency fund. The only caveat is that, if the rate is really low (under 3%-5%) you may want to put it in the market instead.

In terms of credit cards, they can be huge money savers IF you are responsible with them. If you plan to, and know you will be able to, pay it off in full every month, you can get a lot of great cashback options, which, functionally, means you shouldn't have to buy anything at full price ever again. I don't know that I'd put bills on them, but they're good for general purchases.

The only real trick to being responsible with money is save as much of it as humanly possible, don't buy things you don't need, pay down all your debts, then start throwing your spare cash into a diversified portfolio of index funds and bond indexes.

[–]theberge55 0 points1 point  (0 children)

Youre in really good shape. I am 31 and wish i was where you were a decade or so ago. Financial stability is stressful and hard, but you seem like you get that and are doing well.

[–]Owenleejoeking 0 points1 point  (0 children)

What interest rate are your loans?

[–]Dr_Bunson_Honeydew 0 points1 point  (0 children)

If you're considering further debt of a credit cards, maybe you don't pay off your debt as fast if the interest rate is lower that the credit card (i.e. pay off higher interest rate first). Similarly, unless your rate of return for the schwab/vanguard is expected to be higher than the credit card or the loan rate (which is unlikely imo), I'd focus on paying off debt first then investing. Keep that savings as an emergency fund. Overall, though, you're doing great just by focusing on this at a young age and not letting it slip to later in life. keep it up.

[–]ModusInRebusEst 0 points1 point  (0 children)

two simple things.

1) Start budgeting. EveryDollar has a free app that is really well done.

2) Learn to cook/eat at home and eat leftovers. Eating out can be a huge financial drain

[–]quadriderz1 0 points1 point  (1 child)

What’s your interest rates look like? I am currently paying 290 a month for 26k worth of student loans. You may want to look at refinancing.

[–]oakbones[S] 2 points3 points  (0 children)

My minimum for all the loans put together is only 275 but I'm trying to pay it off faster than that.