I'm a new graduate in my first job. I have no debt of any kind - I don't even have a credit card. I've been saving $2000-2500 per month since I started working in August, but I have no idea what to do with that extra money. I don't want to sit on it - a little help?

Maybe book suggestions? Most of the personal finance books I've found are focused on getting out of debt and living below your means, which isn't really useful to me.

Hopefully this hasn't been asked a million times...

How big is your Emergency fund? What are you putting away for your future? Do you have a 401K or a Roth IRA? Do you currently own or want to own a house? What's your current car like? When do you want to retire?

All these questions and more can be asked and answered, and will give you, and us a better idea on what you can do in the future.

Well I'm basically a blank slate.
I'm 22.
I had no savings at all before this job, so I have no emergency fund or IRA/401k.
I haven't put anything away for the future as of yet - I suppose all the money I've saved so far (~$8500) is for the future though...
I don't own a house and I'd prefer the freedom of renting for now.
I drive a 15 yr old car and I'm fine with it.
I have no idea when I want to retire.

People are mixed on this, but I would get a no annual fee credit card...if nothing else just use it for gas. If you are responsible, they are a good way to build credit history. Which I know for me in being younger, was the biggest knock on my credit.

You may not want to buy now, but in the future, responsibly handling revolving credit is a good way to show lenders you can handle a mortgage. Just a thought...many people on here will disagree with that.

As far as books, that is probably what JD blogs about the most, I would just search the blog front page. Or just go to the finance section at the book store and pick up what interests you, that's what I do.

I think you should:

Contribute towards your employers retriement plan, if your able to join now.

Open a Roth IRA

Automate payments toward a savings account

Keep a buffer in your checking account

Enjoy it, seriously.

Here is a simple answer:

Keep saving just leaving it in a high interest checking account for the time being.

Give yourself 6-12 months to educate yourself on investing

Start your retirement planning

Based upon what you learn.. start investing... But do not invest in anything you don't understand.

Fantasma gave you good advice for the immediate future.

I also suggest you develop goals. Decide what you ultimately will need money for and begin to save/invest for that. If you decide saving for a secure retirement is you main goal then you probably want to look at some Vanguard mutual funds. If you think a house purchase in the next few years is your highest priority then a money market or savings account is probably best.

The bottom line is that money is strictly for helping you live your life as you desire. You need to figure out what your life goals are before you can get good advice on how to achieve them. For now, learn to live beneath your means and develop smart money habits while you think about your goals.

Being a 22 yr old recent grad with no student loan debt is a sweet place to start your working life in my view.

Contribute maximum of $5,000 to Roth IRA for 2011 (which I believe you can do anytime from now through mid-April 2012 as long as you specify that it's for the contribution year 2011). Plan to max out your Roth IRA for 2012 at $5,000 also (and every year thereafter). Choose a brokerage firm that is transparent about expense ratios and fees. Choose either funds that have low expense ratios and investment strategies that align with your goals (diversified or targeted) or a selection of individual stocks that have good fundamentals (watch some YouTube videos from Warren Buffett for some general insight).

In the meantime, go information hunting (so that you can hopefully maximize your potential and make fewer mistakes after learning about other people's successes and failures). Eventually you may want to absorb the more advanced knowledge offered by various personal finance blogs (Early Retirement Extreme, Mr Money Mustache, Brave New Life) and/or read library books about asset allocation and real estate and market/economic factors, etc.

Good luck!

spnce - Something important to learn about as you begin your financial education, if not the most important, is the concept of compounding (the magic of compound interest!). Being only 22 you can easily amass alot of wealth if you begin a systematic program of investing.
https://personal.vanguard.com/us/insigh ... about-time

You are certainly in an enviable situation, but you've got some work to do.

First, establish an emergency fund. How much do you spend on all of your expenses in six months? Put that amount aside. During the good times, it's important to prepare for the bad times, and losing a job or some other expense can come at any time.

Second, investigate a retirement plan. I would choose a low-cost broker such as vanguard and start contributing to a broad-based index fund in an IRA or Roth IRA. You might want to read a book on investing first; I wish I had before I started investing! If you don't know which funds to choose, I highly recommend target-date funds. Pick the date that is closest to your anticipated retirement and start investing. Then set up an automatic contribution system and forget you even have the account. Investments like these tend to grow when you're not paying attention...

Third, you must start building credit. It is absolutely paramount, unfortunately, to have a credit history in the current system of economics. Do you plan on buying a house? A car? Taking out a loan someday? For all of these things you will need credit. Get a no-annual-fee credit card, start using it for stuff you would have bought anyway, and pay your balance in full every month. No interest, no problem, and probably some rewards points for your trouble. Credit cards have a bad reputation, no doubt, and you're probably loath to get one having heard all the bad things. Just start out with one and you'll get used to it. Odds are, you won't get over your head and carry a balance anyway!

Extra credit: If you don't have it, get renter's insurance (I'm assuming you rent). It's cheap and absolutely worth it. Remember, your landlord's insurance only covers the property itself, not your belongings within the property. Peace of mind costs about $300/yr, worth every penny.

I just joined the forum and though I might share my 2 cents.

I'm in a similar situation (23, saving a few thousand per month, no debt). I would strongly recommend doing some reading to educate yourself. A great book is "A Random Walk Down Wall Street", by Malkiel. It will introduce you to investing in a very comprehensive way.

I have two big thoughts to share:
First, match your investing style to your goals. If you want a house in 5-10 years, then invest your house savings with a 5-10 year time horizon. This means don't be too aggressive, since you don't want the potential for major losses. Mine is in VWINX. Your retirement savings, however, can be put into a broad mix of mostly aggressive stocks, since you are a few decades away from needing this money. Market declines don't really hurt you there.

Second, take advantage of tax-free growth. Previous posters are right on with the 401k and Roth IRA. I'd get as close as you can to maxing them out. Throughout your life, keep as much money as possible in tax-sheltered accounts - from retirement plans now, to 529's when your potential future kids are born.

Congrats on being in a great place financially!
John

I'll be little contrarian --

I would take a chunk of that money and travel with it. By all means, you should "invest" the money, but when you're young, spending money to gain experiences and memories that will last a lifetime can also be a worthwhile "investment."

It all depends on your priorities. Mine are as follows;

1 Emergency Fund = 3-6 months expenses
2 Retirement = Roth and 401k
3 Set aside money to replace your car when it has worn out
4 House down payment

First of all congratulations on not having any debt.

What you choose to do with your extra money can vary greatly depending on your personal situation. You may want to put more money toward retirement so you can retire earlier. You may hate auto repairs so you may want to buy a new car as soon as you can. You may want to buy a house in which case you would need to save for a down payment. You may not want to own a house and enjoy the freedom of an apartment. If you get an apartment please don't forget renters insurance because your landlords insurance will not cover any of your belongings.