#FinancialAdvice #CareerPath #SavingsGoals
Hey friends! 👋 Turning 25 and feeling a bit lost on what to do next with my 25k in savings. I have a decent credit score, but unsure about going back to school. Any thoughts on what steps to take next? Here are some details to consider:
– 750 credit score 📊
– Working in retail, not making a lot 💰
– Recently lost my mom to cancer, feeling a bit paranoid
– Prioritizing savings, but also treating myself to healthy food occasionally 🥗
– Car paid off, minimal bills 🚗
I’m thinking of potentially exploring these paths:
1. Further education in a field that interests me 📚
2. Investing in stocks or a side hustle 💼
3. Finding a higher paying job with growth potential 💸
Do you think 25k in savings is enough? How can I make this money work for me? Any suggestions on how to navigate this new chapter in my life? Let’s chat! 🌟
I’m really sorry to hear about your mom…
souplover5 had a lot of good information! I’d be careful on thinking the S&P 500 index funds are “safe”. That’s a relative word that can mean different things to different people. Today about a third of the index is just the top 10 tech stocks which can fluctuate in price a lot.
The first step in any personal finance decision is just making sure you have a good understanding of your current situation. I always like to think of money in a “months of bills” format. For instance, how many months of bills would that $25k cover for you? If the answer is 1 then you have very different options compared to say 12 months. Your best bet would just jot down some of your financial details to get an idea of what your financial framework is. After that, you can find a lot of online calculators to help point you in the right direction. If it’s retirement you’re worried about you can run a calculator to estimate how much you’ll need to have by the time you step away. If it’s a home purchase, or college tuition, you can get estimates on those costs and see how the $25k fits into those paths.
Biggest thing to remember is Personal Finance is PERSONAL. That means it has to fit into your life and comfort. Sometimes you’ll hear the talking heads say things like “25 year olds should be invested in XYZ”. If that type of investment makes you lose sleep then its not right for you. Like I tell clients, “At the end of the day you’re the only person that lives with the consequences of these decisions. That means you need to be 100% on board with it.”
Hope this helps!
So sorry for your loss, OP.
First and foremost, don’t make any big decisions when grieving. For now, simply parking that $25k in an HYSA and giving yourself some time is the best move. Hell…I’d suggest you do that anyway because it’s the perfect “emergency fund” account.
Regarding education, it’s definitely cheaper to start out at a community college. Plus, they target young, working individuals like yourself, so their course offerings will likely fit your exact needs. Most universities allow you to transfer around 60 credit hours, which should cover all the “basics” that you need. I wouldn’t bother taking too many “major specific” courses beyond just intro level. You’ll likely have to take them again at your university anyway.
If you have an idea for what career you’re interested in, formulate a plan that begins with the end in mind. My recommended flowchart is something like this: Quality of life desired>Funds needed>Careers paying this amount>What fits you best>Education needed to get there. Once you learn what education you need to accomplish your goals, search for quality programs within your budget.
Finally, I’m guessing student loans have crossed your mind. This sub has mixed feelings on the subject, but let me plant this seed. Your education is a financial investment and absolutely has a calculable rate-of-return. For example, if you take out $200,000 in debt to attend 4 years at a private university to work in elementary education, you’ll be in debt your entire life. However, if you only spend $40,000 on a combo of community college/university credit hours to get a degree in finance/engineering/computer science/accounting/etc., you’ll likely earn MUCH more than what the loans cost you. The “collateral” to a student loan is the quality of your education and the career prospects it gives you, I recommend getting the best “collateral” you can.
You’re asking the right questions. Good luck, OP.
I’m sorry for your loss.
25k in savings is way above average for your age. It could be blown through easily if you don’t manage it correctly. Consider keeping it in a HYSA if this is your emergency fund, you will get a lot of interest from it by doing so. I get like $20/month on only $5k. If you want to invest some of it, I’d suggest S&P 500 index funds. They’re one of the safest investing option and will continue to grow over the years.
What do you like about your job that you’d want to continue doing in your next role? What do you hate about it? How much does your life cost per year? You don’t have to answer those here, but spend some time writing down what you do and do not want to do at work. Calculate how much your hobbies, housing, food, etc cost per year and include the things you want but don’t have (like children, a house). Once you know how much your life will cost, you know what your salary needs to be for you to have those things and still put aside savings. If you’re life is going to cost $70k per year, you’ll likely need a job that pays $100k before taxes, for example. From there, look at jobs that pay that much and get more info on the ones that interest you the most. Taking the time to consider all of that was the only way I was able to decide what to do with my future.
If you decide to go back to school (and you have little to no college classes on your transcript), look at community colleges for the first two years and then transfer to four year. It’ll save you thousands in the long run and get you the same degree as everyone else.