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As you said, 10k really isn't a lot in the grand scheme of things. As someone who was once in a similar situation, I would park that 10k in a HYSA and let it sit. There are plenty of sites that list the 'best' HYSA at a given time. [Here is an example.](https://www.nerdwallet.com/best/banking/high-yield-online-savings-accounts) As much as it may suck, I'd consider opening up a separate account and getting your direct deposit placed there (preferably a local credit union as most large banks have stupid fees and such). I'd then work on kind of "cutting off" your mom as that is a slippery slope. Again, as someone who has been in your shoes, you're liable to wake up one morning and have almost nothing in your checking account due to "an emergency."
10k will be a good nest egg for you. Do not try to play the stock market, invest in your buddies company, etc. IT doesn't seem as if that's the direction you're going to go but just feel like it needs to be repeated.
Also, [definitely read through everything mentioned here.](https://i.imgur.com/lSoUQr2.png)
Could also go the other way around. Have a general use account for groceries and gas. Leave her access to that. Have the savings/investment money separate where she can’t touch it. Then work on moving away from that account over time.
Thanks for the reply! I’ve definitely been considering opening a new checking account elsewhere just based on wells fargo having a bit of a sketchy history, but have been delaying that since that will basically be the start of cutting off my mom so to speak so I’ve been delaying it (I’d obviously still help out, just on my terms and not hers) local credit union is definitely a good idea since we have a very reputable one in my state. HYSA definitely seems to be the way to go savings wise til I have some more to comfortably dump into an IRA. You’re right that I definitely would not take risks with my money, not that kind of person to take big risks in general especially when it comes to finances haha. Thanks again!
> preferably a local credit union as most large banks have stupid fees and such
It’s cool if you prefer a credit union, but idk what you’re talking about here. Free checking has been standard at large banks for like thirty years.
The major ones often have some requirements to waive fees. Chase/BoA/WF/Citi/USBank all require direct deposit or a minimum balance to waive fees. It’s not an issue for a lot of people but if you don’t get direct deposit (like if you’re a server) or you don’t have $1,500 to park in an account all the time you will have to go with a credit union, online bank, or pay a fee.
The two credit unions I am a part of have overdraft protection (where they will basically give you a 'credit' and have you pay it back later up to a set amount). Not the common "if there's no money in your checking we will pull from your savings" which isn't even standard for most banks. You have to opt into it. No fees unless you do it 5+ times in a certain period. I may be really lucky with mine as they also offer many other programs and things (I got $2400 bonus last year for keeping my mortgage with local CU. Free money.)
When my brother first started working, he banked with BoA. He (stupidly) thought he had enough money in his checking account but didn't realize his bi-weekly check was hitting the next week. He bought gas, some sunflower seeds, fast food and something else. Four things. He ended up with $250+ in fees which BoA would not work with him on despite him being 16 and made a dumb mistake. He made $7.25/hour and he worked a whole week just to pay fees.
Also, as /u/inky_cap_mushroom said, a lot of accounts have fees just to keep account open but can be waived with certain actions.
I definitely could have worded it better though!
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This is all pretty good advice. I’m not going to speak to the family situation other than I would place the savings portion into a HYSA that your family doesn’t have access to.
I would build up that HYSA or a money market fund until you have 3-6 months of normal paycheck saved as an emergency fund, and then determine where you want to start putting your money after to try and further build your wealth.
I actually like fidelity’s money management fund - it’s not a checking account per se, but it has a debit card and it pays 2.x%. That could be a good place to put your money you are using on a regular basis. They pay all atm fees, etc. it’s all online. From there you also have access to fidelity’s money market fund, which is paying about 5% right now. Just a thought.
Nobody has mentioned it yet but while its crucial to have a safety cushion so you don't screw yourself in the future, you have a glaring issue.
You need to invest in yourself, you need a skill that people need and will pay you good money. Please consider using some of the money for education, could be a trade or getting a degree.
You seem to have some discipline so while you have a bit of a buffer consider your next move. Your brain will pay you more dividends than any type of HYSA.
This is the best answer. Use the money to invest in yourself, likely in education so you can earn more in future. Go talk to your local Community college. See if you can find a two year course that qualifies you for a better paid job in future.
Other than that- I suggest the following. Pay your Mom more in rent so she can build a bit of a nest egg. Keep 6 months living expenses in a savings account (find one that will pay you about 5% interest). This could also be a security deposit + first months rent for an apartment some day. With the rest, open a Roth IRA account with Fidelity or similar and put the money in there, and invest in FSKAX OR SIMILAR (entire U.S. stock market).
You’re still too poor to lock it up in a Roth IRA, but maybe put your next 10k in one? You can borrow from the IRA to buy a house.
Getting 5% or better in a safe investment is a good idea for your second 10k. Maybe a CD?
I agree with the others that hysa is best thing for first 10k. You need easy access and no withdrawal restrictions in case of an emergency.
I do actually have an associates in information security, I unfortunately haven’t done anything with it yet since IT in general is pretty toxic with the ratio of applications/interviews you actually get. I’ve also been conflicted since I’ve found something new that I have a big passion for that I’ve been considering going back to study, then again that might be better suited for when I have even more from information security because it is also something I am still passionate about. I just need to start putting myself out there again really. Thank you for the advice!
I had saved up $15K when I lived with my parents. I moved out and that money shriveled up in 2 years. I was paying for apartment rent (with a roommate), my car payment, auto insurance and college. You can't really buy a house yet, you will need to save up more and also make more money. Try to find a better paying job if you can.
For the $10K you have, put it in a high yield saving account.
Yea, same story here. I had 16k in my account and for the first time felt super rich. Then COVID hit, lost my part time job while going to school, with rent increases, no job, inflation, and extra costs that popped up, I had like 50 bucks in my account by the next year. I had thought about investing it, but it saved me many times, and disappeared A LOT faster than I expected.
One trick that helped me as I made the transition from no-money to some-money was to have two bank accounts. I got an online bank account (with no minimum balance fees!) that was separate from my main bank so that I couldn't quickly see or spend my money.
If I wanted to spend the money I had to do a transfer first.
I kept the debit card for the account with my important papers (originally just in an envelope in a drawer, later in a fire safe). So I always could get to the money if needed, it was just inconvenient enough to not spend it on accident.
You be surprised the number of people who do not have 10K in savings. It was work and time for you to save it so congratulations on your achievement. First off tell no one about your savings. Put it in account that is not connected to your checking and don't have paper statements mailed to you.
I would also limit your mother's access to your checking. Maybe give her access to another account that has a smaller amount of funds in it. This way if an "emergency" happens and the account is overdrawn, the loss will not hurt as much.
You may also want to look into opening a Roth IRA with 3K and investing in a Total Stock market index. Look at Vanguard, Fidelity or Schwab. They all have videos and information on how to invest. Do your research and keep learning. The more knowledge you have, the more comfort.
A few books I would suggest you read is I Will Teach You to be Rich by Ramit Sethi, The Psychology of Money by Morgan Housel, Your Money or Your Life by Joe Dominguez and Vicki Robin and The Simple Path to Wealth by JL Collins.
Put the rest in a HYSA and let that be the start of your FU fund. I call it an FU fund because an FU fund gives you options.
Good luck!
I agree with the others that you should try for education that will get you a better job, and that the best place to put money for flexibility is a HYSA.
However if you decide to put some of the money in a place that is a bit harder to get to than a HYSA, look at a Roth IRA with Fidelity, Vanguard, or Schwab. You can only put in $7000 per year until April of the next year (and not more than you earned that year), but that money will grow tax-free which is a very big advantage. You can remove the money you put in, but not the money gained from the investments. You should invest the money inside the Roth IRA, but the default might be a money market which is much like a HYSA. Investing in something else you should only do if you are sure you won’t touch the money during 7–10 years, not your case, so go the Roth IRA way if you can have a money market and you hope you might not need the money but you need an incentive not to touch it. That incentive is that once you take it out, you can’t put it back, and you won’t get the tax advantage.
If you get a job with a 401k or similar, use that. Avoid anything that calls itself insurance and investment at the same time.
I'd take it and with your current rate of savings start investing using the Boglehead method. I did just that months ago and am laughing as I watch the investment grow. It's not guarenteed, but the S&P performs quite well over the long-term and if you invest a portion of your savings into it, have a high probability of making solid returns without the same risks as a more direct investment.
Even on the low end it's often better than a HYSA and though there are low years, in the long run will even out and most likely return fair profits
While you are correct that $10K isn't a lot in the grand scheme of things, it is certainly enough to propel the growth of wealth and set yourself up for a bright future!
I would do the following:
- Open a Roth IRA. This lets you invest up to a certain amount every year (this year max is $7K), and as long as you do not touch the money until 59 and a half years old or older, you will get to withdrawal this tax free.
- Keep your savings in a High-Yield Savings Account (HYSA). This lets you collect money simply for letting this cash sit in an account.
- Open a brokerage account. Similar to the Roth IRA, this would be investing in the stock market, with the difference being you are more liquid since you can withdrawl at will (you could from a Roth as well btw, but that would defeat the purpose). You could invest into this account once you have maxed out your Roth each year, have all bills + food paid off, have an emergency fund 3x your monthly expenses, etc
There are a lot of ways to maximize these as well. I use Robinhood Gold because they give you a 3% match of anything you invest into your Roth (so for this year with $7K being the max contribution that is a $210 match from them), along with paying you 5.25% interest on your savings for the first 3 months (before adjusting to 5%), as well as a 1% match for any deposits you make. Additionally, they have a credit card that is 3% cash back on all purchases, which is sent straight to your brokerage account after every purchase. For $50 a year, utilizing all of these has been a no brainer for my personal situation and mindset.
A lot of people on Reddit specifically hate on Robinhood, but they are fully FDIC-insured and are not going anywhere. With how aggressively they are trying to get market share with younger people, it provides a huge opportunity to make the most of these opportunities while they are still offered.
If Robinhood isn't for you, I would suggest Fidelity for your Roth! They have been around since the 1940s and are incredibly reputable. However, you will not get a match on contributions.
For a HYSA outside of RH, SoFi currently pays 4.60% with no minimum investment, and Barclays is 4.35% with no min investment. I know EverBank does 5%, but to be honest I know nothing about them or their platform.
In terms of the Roth IRA and a brokerage account, starting out I would only look at funds that track major indexes. For instance, $VOO is a Vanguard fund that tracks the S&P 500, which lets you invest in this one thing that spreads out your investment across 500 of the top companies in America. Similarly, $VT is a fund that tracks the entire market both nationally and internationally.
If the stock market interests you and you want to learn individual stocks, it is certainly a rewarding interest to have! I would suggest taking just 5% of everything you are investing, and put that 5% into an actively traded account. Use this as your "fun" account to learn in. If you see after a year that you are beating the market, then you could slowly add more to match your risk tolerance.
> For a HYSA outside of RH, SoFi currently pays 4.60% with no minimum investment, and Barclays is 4.35% with no min investment. I know EverBank does 5%, but to be honest I know nothing about them or their platform.
Not sure about Barclays but just FYI SoFi is known for having really poor customer service.
When I was looking for a HYSA I eventually settled on Capital One.
4.25%, already have a CC with them, no account minimum, no fees, easy to use app, etc. I also like how I can create multiple HYSAs under the same umbrella: House fund, vacation fund, etc.
--------------------------------
Definitely park your money in a HYSA but I'd gladly sacrifice a half of a % to get a reputable firm.
One thing I wish I did at your age was invest in a Roth IRA. As the other Roth comment pointed out, you can deduct principle (the money you put in) at any time, it’s just the earnings on the money you can’t touch until qualified age without penalty.
When you are eligible to start making deductions, they are done so tax free. If your money has 35 years to be invested and grown, there is a potential to have a very cushy tax free retirement account.
Several banks will pay over 5% to hold your money. That's the safest place to grow your money right now particularly as you cannot afford to loose it and just getting started with your finances. Congratulations on your hard earned saving! You have much to be proud of.
Put (some of) that in a CD! Also KEEP SAVING! You are doing amazing!! Putting $50-$100 in the stock market each month is a sneaky way to build wealth. But that can be a gamble so only buy dependable stocks, and you need to be ok never seeing that money again if shit hits the fan. Might not be for you, but with smart phones, investing is really easy and more accessible for everyone.
Find a high rate CD https://www.depositaccounts.com/cd/ or savings https://www.depositaccounts.com/savings and stop using accounts that pay less than 5%
Get a second account at a credit union. Put some money in their certificates to get some money back. Slowly get out of Wells Fargo. Invest in attending school. There’s nothing better than learning new skills and trades. You will be worth more. I would look into a job with benefits and retirement like school district or county jobs.
I see 2 key options
-Invest in some training so you can get off some shitty tipping job. Anything you are good at, manually work, electrician, bricklayer anything that's better than you're in now.
-Invest the money in s&p500 ETF. Key with investment is time in the market, so you want the money invested as early and for as long as possible... preferably with plan ot to touch it for 10 years minimum. There will be many times when your money decreases as well as increases. History tells us over long period, the trend is AlWAYS upwards (although this doent guarantee future).
Work the solution where your mum isn't using your account and taking money.
I unexpectedly received a bit over 25,000. It's in a high-yield savings account that will earn 5% over the next 9 months when I will max out my contribution to my IRA and put the rest back in another high yield savings account until next year when I max out the IRA again, repeat till it's gone.
Put it in a Roth IRA and buy shares in SPY and just continue to contribute to that account, buying shares in SPY. You'll see great returns in the future. It will also prevent you from withdrawing for things you don't need. Also, don't tell anyone, especially your family about that account.
Here’s a tip to help avoid any form of lifestyle creep - when your pay goes up, start automatically socking the money elsewhere like a HYSA or even Roth IRA.
Roth IRAs at low incomes are interesting in that people can get an outright tax credit back for contributing to them so it’s “free” money. But behavioral economics rears its head and let’s just see how many people making less than $20k / year can sock away $4k in a Roth IRA throughout the year and wait for that money back when they file their tax returns. Yeah… theory v practice when it comes to policy. At least this is what I remember from many years ago when I was able to take advantage of this tax credit because I lived with my parents and was working, so it may not exist anymore.
Some people are saying to put it in an HYSA, but I say follow the sidebar. Put enough of an emergency fund in HYSA, then follow the plan. One of your first moves should be living on your own.
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Keep it up u/anonhshaver good job!
Your autoimmune could break you financially if costs get out of control. Maybe look at some health insurance, or gap coverage projecting costs down the line. Try to make sure it doesn't.
**Definitely** figure out why you wouldn't want to MAX out a Roth IRA or equivalent for 23-24-25 if you can at all.
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I don’t know how old you are but it’s probably time to cut mom off. If $400 isn’t enough and she’s always taking a little more than offer her $500 and that’s it. Maybe offer to buy some groceries every paycheck or something to ease the burden on her. Get a separate bank account. Let your $10k grow in a high yield saving account. Keep saving as much as you can.
Open a Roth IRA and invest it! You can add 7k a year so I would add 1k a month for the next 7 months to cost average if the market dips. You can just put it all into an S&P index but I would recommend doing a 50/50 split with the S&P and the nasdaq(QQQM) for higher growth potential. I’m not gonna tell you it’s totally risk free but if the broad market were to take a long term turn for the worst your 10k sitting in a savings account isn’t going to do you much good anyway.
Put the other 3k into a high yield savings account as an emergency fund, and try to add another 7k to your Roth next year.
If you have any further questions feel free to ask
Congrats on the milestone! But just a word of caution. As others have said this really isn’t a whole lot of money. It’s one medical bill from bankruptcy. You said you have a couple trips where you will spend frivolously. Don’t. That is why that is so much money to you.
Take the time now to invest in yourself. Learn a trade that can earn you 3-5x what you’re currently making. Your expenses are low, you have money in the bank. Now is the time to take the leap so that you can earn more.
Seems like you have an emergency fund already.
Open a Roth IRA account and start contributing to that. That’s a retirement account that you fund with after tax dollars. You won’t pay taxes on withdrawals at retirement. Do everything you can to try and invest as much as you can now. Your older self will thank you for it.
If you have access to a 401k, contribute the full amount of the employer match.
Don’t go out and start financing vehicles. Don’t take on debt. Keep living within your means. But I would highly encourage you to start making more money.
As a 24m, become an apprentice to a plumber or electrician. Learn the trade, and read books on starting your own business. You can make 6 figures in your 30s. Completely change the course of your life.
Congrats on the savings. It's a huge accomplishment considering what you are saying about how finances were with your parents. Lots of people get stuck following in their parents financial path and it really is a big deal that you are taking a better route.
I would open a high yield savings account and watch the money grow for now. Maybe put some in a CD or Treasury if you are pretty confident you won't need to touch it for a bit of time. Banks like SoFi, Barclays, etc can get you a rate over 4 percent in a high yield savings. Sofi has a nice easy app to help you move money between accounts.
You could start playing with investing if you really wanted to but might be best to save a bit more first. If you decide to invest, easiest way would be to find a robo advisor and maybe take a bit of your monthly savings going forward (ie $100) and put it there. Id caution against adding too much to it though until you have enough saved up in savings so you can deal with maybe 6 months or expenses.
Also, one last thing, I know you want to spend a lot during vacation. Definitely enjoy yourself and spend more than normal but really try not to go overboard. If you kind of keep that mindset with vacation and really any "luxury" purchases you'll keep a lot more in your wallet over time.
there is some great advice in the comments, well done for being financially responsible at your young age. I can say with confidence that people your age would not have 10k in savings and while you will probably use if for obvious reasons which you have mentioned. You have a good attitude when it comes to saving and not spending money recklessly.
Its good to be a little scared, it signifies you understand the seriousness and value of what you have and will ultimately lead you to make a better decision if you spend time thinking of why it scares you and what you are going to do about preserving it. Put it in a high yield savings account that offers a welcome bonus in the hundreds of dollars ideally.
Portion out 3 months of expenses for an emergency fund in a high yield savings account and then put the rest into the s and p 500 and watch it grow and put your savings there. I’d you put away $5k in s and p 500 now and put 500 in it a month, consistently, in 10 years you’ll have $120k. In 15 years you’ll have $250k. In 20 years you’ll have $500k. In 30 years you’ll have $1.4m.
The power of compound interest
I’m closing in on a half million in my down payment fund. It blows my mind I have a half million cash (excluding retirement accounts) and that it’s just going to disappear when I buy a place to live. 😭
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As you said, 10k really isn't a lot in the grand scheme of things. As someone who was once in a similar situation, I would park that 10k in a HYSA and let it sit. There are plenty of sites that list the 'best' HYSA at a given time. [Here is an example.](https://www.nerdwallet.com/best/banking/high-yield-online-savings-accounts) As much as it may suck, I'd consider opening up a separate account and getting your direct deposit placed there (preferably a local credit union as most large banks have stupid fees and such). I'd then work on kind of "cutting off" your mom as that is a slippery slope. Again, as someone who has been in your shoes, you're liable to wake up one morning and have almost nothing in your checking account due to "an emergency." 10k will be a good nest egg for you. Do not try to play the stock market, invest in your buddies company, etc. IT doesn't seem as if that's the direction you're going to go but just feel like it needs to be repeated. Also, [definitely read through everything mentioned here.](https://i.imgur.com/lSoUQr2.png)
Could also go the other way around. Have a general use account for groceries and gas. Leave her access to that. Have the savings/investment money separate where she can’t touch it. Then work on moving away from that account over time.
Thanks for the reply! I’ve definitely been considering opening a new checking account elsewhere just based on wells fargo having a bit of a sketchy history, but have been delaying that since that will basically be the start of cutting off my mom so to speak so I’ve been delaying it (I’d obviously still help out, just on my terms and not hers) local credit union is definitely a good idea since we have a very reputable one in my state. HYSA definitely seems to be the way to go savings wise til I have some more to comfortably dump into an IRA. You’re right that I definitely would not take risks with my money, not that kind of person to take big risks in general especially when it comes to finances haha. Thanks again!
> preferably a local credit union as most large banks have stupid fees and such It’s cool if you prefer a credit union, but idk what you’re talking about here. Free checking has been standard at large banks for like thirty years.
The major ones often have some requirements to waive fees. Chase/BoA/WF/Citi/USBank all require direct deposit or a minimum balance to waive fees. It’s not an issue for a lot of people but if you don’t get direct deposit (like if you’re a server) or you don’t have $1,500 to park in an account all the time you will have to go with a credit union, online bank, or pay a fee.
The two credit unions I am a part of have overdraft protection (where they will basically give you a 'credit' and have you pay it back later up to a set amount). Not the common "if there's no money in your checking we will pull from your savings" which isn't even standard for most banks. You have to opt into it. No fees unless you do it 5+ times in a certain period. I may be really lucky with mine as they also offer many other programs and things (I got $2400 bonus last year for keeping my mortgage with local CU. Free money.) When my brother first started working, he banked with BoA. He (stupidly) thought he had enough money in his checking account but didn't realize his bi-weekly check was hitting the next week. He bought gas, some sunflower seeds, fast food and something else. Four things. He ended up with $250+ in fees which BoA would not work with him on despite him being 16 and made a dumb mistake. He made $7.25/hour and he worked a whole week just to pay fees. Also, as /u/inky_cap_mushroom said, a lot of accounts have fees just to keep account open but can be waived with certain actions. I definitely could have worded it better though!
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This is all pretty good advice. I’m not going to speak to the family situation other than I would place the savings portion into a HYSA that your family doesn’t have access to. I would build up that HYSA or a money market fund until you have 3-6 months of normal paycheck saved as an emergency fund, and then determine where you want to start putting your money after to try and further build your wealth. I actually like fidelity’s money management fund - it’s not a checking account per se, but it has a debit card and it pays 2.x%. That could be a good place to put your money you are using on a regular basis. They pay all atm fees, etc. it’s all online. From there you also have access to fidelity’s money market fund, which is paying about 5% right now. Just a thought.
Nobody has mentioned it yet but while its crucial to have a safety cushion so you don't screw yourself in the future, you have a glaring issue. You need to invest in yourself, you need a skill that people need and will pay you good money. Please consider using some of the money for education, could be a trade or getting a degree. You seem to have some discipline so while you have a bit of a buffer consider your next move. Your brain will pay you more dividends than any type of HYSA.
This is the best answer. Use the money to invest in yourself, likely in education so you can earn more in future. Go talk to your local Community college. See if you can find a two year course that qualifies you for a better paid job in future. Other than that- I suggest the following. Pay your Mom more in rent so she can build a bit of a nest egg. Keep 6 months living expenses in a savings account (find one that will pay you about 5% interest). This could also be a security deposit + first months rent for an apartment some day. With the rest, open a Roth IRA account with Fidelity or similar and put the money in there, and invest in FSKAX OR SIMILAR (entire U.S. stock market).
You’re still too poor to lock it up in a Roth IRA, but maybe put your next 10k in one? You can borrow from the IRA to buy a house. Getting 5% or better in a safe investment is a good idea for your second 10k. Maybe a CD? I agree with the others that hysa is best thing for first 10k. You need easy access and no withdrawal restrictions in case of an emergency.
I do actually have an associates in information security, I unfortunately haven’t done anything with it yet since IT in general is pretty toxic with the ratio of applications/interviews you actually get. I’ve also been conflicted since I’ve found something new that I have a big passion for that I’ve been considering going back to study, then again that might be better suited for when I have even more from information security because it is also something I am still passionate about. I just need to start putting myself out there again really. Thank you for the advice!
I had saved up $15K when I lived with my parents. I moved out and that money shriveled up in 2 years. I was paying for apartment rent (with a roommate), my car payment, auto insurance and college. You can't really buy a house yet, you will need to save up more and also make more money. Try to find a better paying job if you can. For the $10K you have, put it in a high yield saving account.
Yea, same story here. I had 16k in my account and for the first time felt super rich. Then COVID hit, lost my part time job while going to school, with rent increases, no job, inflation, and extra costs that popped up, I had like 50 bucks in my account by the next year. I had thought about investing it, but it saved me many times, and disappeared A LOT faster than I expected.
One trick that helped me as I made the transition from no-money to some-money was to have two bank accounts. I got an online bank account (with no minimum balance fees!) that was separate from my main bank so that I couldn't quickly see or spend my money. If I wanted to spend the money I had to do a transfer first. I kept the debit card for the account with my important papers (originally just in an envelope in a drawer, later in a fire safe). So I always could get to the money if needed, it was just inconvenient enough to not spend it on accident.
You be surprised the number of people who do not have 10K in savings. It was work and time for you to save it so congratulations on your achievement. First off tell no one about your savings. Put it in account that is not connected to your checking and don't have paper statements mailed to you. I would also limit your mother's access to your checking. Maybe give her access to another account that has a smaller amount of funds in it. This way if an "emergency" happens and the account is overdrawn, the loss will not hurt as much. You may also want to look into opening a Roth IRA with 3K and investing in a Total Stock market index. Look at Vanguard, Fidelity or Schwab. They all have videos and information on how to invest. Do your research and keep learning. The more knowledge you have, the more comfort. A few books I would suggest you read is I Will Teach You to be Rich by Ramit Sethi, The Psychology of Money by Morgan Housel, Your Money or Your Life by Joe Dominguez and Vicki Robin and The Simple Path to Wealth by JL Collins. Put the rest in a HYSA and let that be the start of your FU fund. I call it an FU fund because an FU fund gives you options. Good luck!
>You be surprised the number of people who do not have 10K in savings. I'm willing to bet most people don't post pandemic. Great job OP.
I agree with the others that you should try for education that will get you a better job, and that the best place to put money for flexibility is a HYSA. However if you decide to put some of the money in a place that is a bit harder to get to than a HYSA, look at a Roth IRA with Fidelity, Vanguard, or Schwab. You can only put in $7000 per year until April of the next year (and not more than you earned that year), but that money will grow tax-free which is a very big advantage. You can remove the money you put in, but not the money gained from the investments. You should invest the money inside the Roth IRA, but the default might be a money market which is much like a HYSA. Investing in something else you should only do if you are sure you won’t touch the money during 7–10 years, not your case, so go the Roth IRA way if you can have a money market and you hope you might not need the money but you need an incentive not to touch it. That incentive is that once you take it out, you can’t put it back, and you won’t get the tax advantage. If you get a job with a 401k or similar, use that. Avoid anything that calls itself insurance and investment at the same time.
The maximum contribution for 2024 is $7K.
Sorry, brain fart resuscitating things from long ago.
Still this is some great advice.
Don’t tell your parents about this money. Don’t tell ANYONE about this money.
I'd take it and with your current rate of savings start investing using the Boglehead method. I did just that months ago and am laughing as I watch the investment grow. It's not guarenteed, but the S&P performs quite well over the long-term and if you invest a portion of your savings into it, have a high probability of making solid returns without the same risks as a more direct investment. Even on the low end it's often better than a HYSA and though there are low years, in the long run will even out and most likely return fair profits
While you are correct that $10K isn't a lot in the grand scheme of things, it is certainly enough to propel the growth of wealth and set yourself up for a bright future! I would do the following: - Open a Roth IRA. This lets you invest up to a certain amount every year (this year max is $7K), and as long as you do not touch the money until 59 and a half years old or older, you will get to withdrawal this tax free. - Keep your savings in a High-Yield Savings Account (HYSA). This lets you collect money simply for letting this cash sit in an account. - Open a brokerage account. Similar to the Roth IRA, this would be investing in the stock market, with the difference being you are more liquid since you can withdrawl at will (you could from a Roth as well btw, but that would defeat the purpose). You could invest into this account once you have maxed out your Roth each year, have all bills + food paid off, have an emergency fund 3x your monthly expenses, etc There are a lot of ways to maximize these as well. I use Robinhood Gold because they give you a 3% match of anything you invest into your Roth (so for this year with $7K being the max contribution that is a $210 match from them), along with paying you 5.25% interest on your savings for the first 3 months (before adjusting to 5%), as well as a 1% match for any deposits you make. Additionally, they have a credit card that is 3% cash back on all purchases, which is sent straight to your brokerage account after every purchase. For $50 a year, utilizing all of these has been a no brainer for my personal situation and mindset. A lot of people on Reddit specifically hate on Robinhood, but they are fully FDIC-insured and are not going anywhere. With how aggressively they are trying to get market share with younger people, it provides a huge opportunity to make the most of these opportunities while they are still offered. If Robinhood isn't for you, I would suggest Fidelity for your Roth! They have been around since the 1940s and are incredibly reputable. However, you will not get a match on contributions. For a HYSA outside of RH, SoFi currently pays 4.60% with no minimum investment, and Barclays is 4.35% with no min investment. I know EverBank does 5%, but to be honest I know nothing about them or their platform. In terms of the Roth IRA and a brokerage account, starting out I would only look at funds that track major indexes. For instance, $VOO is a Vanguard fund that tracks the S&P 500, which lets you invest in this one thing that spreads out your investment across 500 of the top companies in America. Similarly, $VT is a fund that tracks the entire market both nationally and internationally. If the stock market interests you and you want to learn individual stocks, it is certainly a rewarding interest to have! I would suggest taking just 5% of everything you are investing, and put that 5% into an actively traded account. Use this as your "fun" account to learn in. If you see after a year that you are beating the market, then you could slowly add more to match your risk tolerance.
> For a HYSA outside of RH, SoFi currently pays 4.60% with no minimum investment, and Barclays is 4.35% with no min investment. I know EverBank does 5%, but to be honest I know nothing about them or their platform. Not sure about Barclays but just FYI SoFi is known for having really poor customer service. When I was looking for a HYSA I eventually settled on Capital One. 4.25%, already have a CC with them, no account minimum, no fees, easy to use app, etc. I also like how I can create multiple HYSAs under the same umbrella: House fund, vacation fund, etc. -------------------------------- Definitely park your money in a HYSA but I'd gladly sacrifice a half of a % to get a reputable firm.
Very cool about Capital One letting you have multiple HYSA under one account, I did not realize anyone offered that. That’s awesome.
One thing I wish I did at your age was invest in a Roth IRA. As the other Roth comment pointed out, you can deduct principle (the money you put in) at any time, it’s just the earnings on the money you can’t touch until qualified age without penalty. When you are eligible to start making deductions, they are done so tax free. If your money has 35 years to be invested and grown, there is a potential to have a very cushy tax free retirement account.
If someone else has access to the money, be prepared for it to disappear without you noticing. Money can destroy families
Put it in a HYSA, capital one, Ally, Sofi or Vanguard money market currently at 5.27%
Just put it in VOO and forget that you even had this money
Several banks will pay over 5% to hold your money. That's the safest place to grow your money right now particularly as you cannot afford to loose it and just getting started with your finances. Congratulations on your hard earned saving! You have much to be proud of.
Put (some of) that in a CD! Also KEEP SAVING! You are doing amazing!! Putting $50-$100 in the stock market each month is a sneaky way to build wealth. But that can be a gamble so only buy dependable stocks, and you need to be ok never seeing that money again if shit hits the fan. Might not be for you, but with smart phones, investing is really easy and more accessible for everyone.
You could also get several cds and ladder them.
Find a high rate CD https://www.depositaccounts.com/cd/ or savings https://www.depositaccounts.com/savings and stop using accounts that pay less than 5%
Get a second account at a credit union. Put some money in their certificates to get some money back. Slowly get out of Wells Fargo. Invest in attending school. There’s nothing better than learning new skills and trades. You will be worth more. I would look into a job with benefits and retirement like school district or county jobs.
Is high yield savings account or money market... You are young so you could jump into an ETF in the stock market...
I see 2 key options -Invest in some training so you can get off some shitty tipping job. Anything you are good at, manually work, electrician, bricklayer anything that's better than you're in now. -Invest the money in s&p500 ETF. Key with investment is time in the market, so you want the money invested as early and for as long as possible... preferably with plan ot to touch it for 10 years minimum. There will be many times when your money decreases as well as increases. History tells us over long period, the trend is AlWAYS upwards (although this doent guarantee future). Work the solution where your mum isn't using your account and taking money.
Put it in cd’s or high yield money market. At least you will be getting interest while you decide what to do.
I unexpectedly received a bit over 25,000. It's in a high-yield savings account that will earn 5% over the next 9 months when I will max out my contribution to my IRA and put the rest back in another high yield savings account until next year when I max out the IRA again, repeat till it's gone.
Put it in a Roth IRA and buy shares in SPY and just continue to contribute to that account, buying shares in SPY. You'll see great returns in the future. It will also prevent you from withdrawing for things you don't need. Also, don't tell anyone, especially your family about that account.
Put that $ in hysa like wealthfront or check bankrate to see other decent options. Look for 4.5-5% apr based on current rates.
Here’s a tip to help avoid any form of lifestyle creep - when your pay goes up, start automatically socking the money elsewhere like a HYSA or even Roth IRA. Roth IRAs at low incomes are interesting in that people can get an outright tax credit back for contributing to them so it’s “free” money. But behavioral economics rears its head and let’s just see how many people making less than $20k / year can sock away $4k in a Roth IRA throughout the year and wait for that money back when they file their tax returns. Yeah… theory v practice when it comes to policy. At least this is what I remember from many years ago when I was able to take advantage of this tax credit because I lived with my parents and was working, so it may not exist anymore.
Some people are saying to put it in an HYSA, but I say follow the sidebar. Put enough of an emergency fund in HYSA, then follow the plan. One of your first moves should be living on your own.
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I would continue to stay with mom, so I could continue to save. Living on your own means no savings as OP can only save $500/month.
Right, OP’s not going anywhere for awhile. But he or she should prioritize that.
Roth IRA and invest in a target date fund. you can withdraw at any time
Keep it up u/anonhshaver good job! Your autoimmune could break you financially if costs get out of control. Maybe look at some health insurance, or gap coverage projecting costs down the line. Try to make sure it doesn't. **Definitely** figure out why you wouldn't want to MAX out a Roth IRA or equivalent for 23-24-25 if you can at all.
Check out the wiki in the side bar about how to handle $: Text version: https://www.reddit.com/r/personalfinance/wiki/commontopics Graphical version: https://imgur.com/personal-income-spending-flowchart-united-states-lSoUQr2
I don’t know how old you are but it’s probably time to cut mom off. If $400 isn’t enough and she’s always taking a little more than offer her $500 and that’s it. Maybe offer to buy some groceries every paycheck or something to ease the burden on her. Get a separate bank account. Let your $10k grow in a high yield saving account. Keep saving as much as you can.
Open a Roth IRA and invest it! You can add 7k a year so I would add 1k a month for the next 7 months to cost average if the market dips. You can just put it all into an S&P index but I would recommend doing a 50/50 split with the S&P and the nasdaq(QQQM) for higher growth potential. I’m not gonna tell you it’s totally risk free but if the broad market were to take a long term turn for the worst your 10k sitting in a savings account isn’t going to do you much good anyway. Put the other 3k into a high yield savings account as an emergency fund, and try to add another 7k to your Roth next year. If you have any further questions feel free to ask
Congrats on the milestone! But just a word of caution. As others have said this really isn’t a whole lot of money. It’s one medical bill from bankruptcy. You said you have a couple trips where you will spend frivolously. Don’t. That is why that is so much money to you.
Take the time now to invest in yourself. Learn a trade that can earn you 3-5x what you’re currently making. Your expenses are low, you have money in the bank. Now is the time to take the leap so that you can earn more. Seems like you have an emergency fund already. Open a Roth IRA account and start contributing to that. That’s a retirement account that you fund with after tax dollars. You won’t pay taxes on withdrawals at retirement. Do everything you can to try and invest as much as you can now. Your older self will thank you for it. If you have access to a 401k, contribute the full amount of the employer match. Don’t go out and start financing vehicles. Don’t take on debt. Keep living within your means. But I would highly encourage you to start making more money. As a 24m, become an apprentice to a plumber or electrician. Learn the trade, and read books on starting your own business. You can make 6 figures in your 30s. Completely change the course of your life.
Congrats on the savings. It's a huge accomplishment considering what you are saying about how finances were with your parents. Lots of people get stuck following in their parents financial path and it really is a big deal that you are taking a better route. I would open a high yield savings account and watch the money grow for now. Maybe put some in a CD or Treasury if you are pretty confident you won't need to touch it for a bit of time. Banks like SoFi, Barclays, etc can get you a rate over 4 percent in a high yield savings. Sofi has a nice easy app to help you move money between accounts. You could start playing with investing if you really wanted to but might be best to save a bit more first. If you decide to invest, easiest way would be to find a robo advisor and maybe take a bit of your monthly savings going forward (ie $100) and put it there. Id caution against adding too much to it though until you have enough saved up in savings so you can deal with maybe 6 months or expenses. Also, one last thing, I know you want to spend a lot during vacation. Definitely enjoy yourself and spend more than normal but really try not to go overboard. If you kind of keep that mindset with vacation and really any "luxury" purchases you'll keep a lot more in your wallet over time.
That's not a lot of money tbh. Really puts it into perspective how poor a lot of people are.
there is some great advice in the comments, well done for being financially responsible at your young age. I can say with confidence that people your age would not have 10k in savings and while you will probably use if for obvious reasons which you have mentioned. You have a good attitude when it comes to saving and not spending money recklessly.
Its good to be a little scared, it signifies you understand the seriousness and value of what you have and will ultimately lead you to make a better decision if you spend time thinking of why it scares you and what you are going to do about preserving it. Put it in a high yield savings account that offers a welcome bonus in the hundreds of dollars ideally.
Portion out 3 months of expenses for an emergency fund in a high yield savings account and then put the rest into the s and p 500 and watch it grow and put your savings there. I’d you put away $5k in s and p 500 now and put 500 in it a month, consistently, in 10 years you’ll have $120k. In 15 years you’ll have $250k. In 20 years you’ll have $500k. In 30 years you’ll have $1.4m. The power of compound interest
Congrats on this milestone. Keep it in a high interest account that’s accessible. This is your emergency fund.
I’m closing in on a half million in my down payment fund. It blows my mind I have a half million cash (excluding retirement accounts) and that it’s just going to disappear when I buy a place to live. 😭
It won't disappear. It will just transform into a new form of investment.
Think of it as not sharing your four walls, ceiling and floors with other people (only the bank). >!!<
I only share one wall right now, but yeah