22 year old trying to figure it out

Saving & investing, frugality & simple living. They're all part of the wealth equation.
Here's the place to discuss getting (and keeping!) your money.

Moderator: lvergon

g_gecko
Posts: 3
Joined: Wed Mar 06, 2013 12:10 am
Contact:

22 year old trying to figure it out

Postby g_gecko » Wed Mar 06, 2013 12:20 am

Hey everyone,

This is my first post here after lurking for a while and I want to thank you for your help in advance.

I just graduated and I've got a job that is paying me $63,000 and will probably increase 3-4% next month. My company is quite nice and they do 401k match for up to 5% or 5,000, while they have another 5% contribution as "Profit Sharing". I should also be receiving a 2,000 bonus and the IRS gave me a 4,000 refund! I have no debt whatsoever and I don't plan to marry anytime soon.

Right now, I am maxing out my 401k and I'm thinking about using the bonus and the tax refund money to fund a Roth IRA on top. What kind of advice would you tell me given that I'm young and not risk averse? What's the best way to start saving incrementally month by month when you have access to a credit card, that even if you don't incur in debt you're still eating your "potential savings"?

Thanks in advance!

Wysteria
Posts: 43
Joined: Mon Sep 21, 2009 9:04 am
Contact:

Re: 22 year old trying to figure it out

Postby Wysteria » Wed Mar 06, 2013 6:46 am

The best thing I know of is to choose something to save for, something concrete, and put a concrete date you want it by. That way you can weigh the immediate purchase against the eventual purchase. (Would I rather have $100 worth of extras this month, or would I rather buy a house by 2020? For a random example.) What do you want to save up for?

Unless you're more interested in advice on where to put your savings, which I have no strong feelings about.

Bichon Frise
Posts: 1100
Joined: Fri May 04, 2012 2:23 pm
Contact:

Re: 22 year old trying to figure it out

Postby Bichon Frise » Wed Mar 06, 2013 8:21 am

Fund your Roth.

Educate yourself. There are many "good" resources, and I recommend the Boglehead's investing book. Others will be a long to throw their recommendations into the mix as well. You'd be wise to read them all.
Bichon Frise

"If you only have 1 year to live, move to Penn...as it will seem like an eternity."

avocado wrote:Good to see you back, I was starting to miss your incisive commentary!

g_gecko
Posts: 3
Joined: Wed Mar 06, 2013 12:10 am
Contact:

Re: 22 year old trying to figure it out

Postby g_gecko » Wed Mar 06, 2013 8:06 pm

@Wysteria I guess I'm at a point in my life where I don't really have a specific goal given that I'm just starting to figure out things. I would like to start saving and investing that money so that compounding works its magic until I realize what do I want to do with it.

@bichonfrise I just opened a Vanguard Roth in which I will use their 2055 Fund, which has a 90% stocks/10% bonds distribuition and start contributing up to the $5,500 limit. After maxing my 401K to my employers match and funding my Roth, should I just keep on adding to those two?

I don't see myself buying a house unless I wanted to rent it to someone else in the next five years to be honest.

Bichon Frise
Posts: 1100
Joined: Fri May 04, 2012 2:23 pm
Contact:

Re: 22 year old trying to figure it out

Postby Bichon Frise » Wed Mar 06, 2013 8:19 pm

you should have contributed $5000 for tax year 2012
Bichon Frise

"If you only have 1 year to live, move to Penn...as it will seem like an eternity."

avocado wrote:Good to see you back, I was starting to miss your incisive commentary!

g_gecko
Posts: 3
Joined: Wed Mar 06, 2013 12:10 am
Contact:

Re: 22 year old trying to figure it out

Postby g_gecko » Wed Mar 06, 2013 8:28 pm

I started working towards the end of the year, that's why I couldn't.

DaveInPgh
Posts: 266
Joined: Wed Aug 17, 2011 8:28 am
Location: Pittsburgh
Contact:

Re: 22 year old trying to figure it out

Postby DaveInPgh » Wed Mar 06, 2013 9:42 pm

You can make a 2012 contribution to your Roth IRA up to the tax filing deadline, which is April 15.

Bichon Frise
Posts: 1100
Joined: Fri May 04, 2012 2:23 pm
Contact:

Re: 22 year old trying to figure it out

Postby Bichon Frise » Thu Mar 07, 2013 7:21 am

g_gecko wrote:I started working towards the end of the year, that's why I couldn't.


you can contribute all your earned income for the year or $5000 whichever is less.
Bichon Frise

"If you only have 1 year to live, move to Penn...as it will seem like an eternity."

avocado wrote:Good to see you back, I was starting to miss your incisive commentary!


Return to “Personal Finance”

Who is online

Users browsing this forum: Bing [Bot]