How much money should I save?
First off, as a disclaimer, apologies if this post comes off as naive or unintelligent. Just wondering what others have done when they were in my position.
Currently coming off my SA stint at a BB, and signed a full-time offer with the same firm for next year. Fortunately, I will be graduating college in the spring with no debt. With the money I made over the summer, plus my signing bonus, my current net worth totals to ~$22-27k, after my remaining rent/utilities/grocery payments are subtracted out.
My question is, how much of my money should I spend vs. save? I know I'll be making a comfortable amount next summer, but can't help but think that there can be better ways to allocate my money besides burning through it all by next year. I wouldn't consider myself an impulsive spender, and unless COVID largely subsides, I don't really think I'll be traveling a lot after graduation, unfortunately. Not really thinking about retirement at this moment with my current savings (but should I be?), just wondering whether it's worth throwing 40-60% of my savings into some ETFs/real estate/actively-managed trading account, etc. for some extra income.
Anyone faced with a similar question before they started FT? Or should I say fuck it and enjoy my savings while I still have some free time?
In a very similar situation here, I am leaning towards oversaving and pretending to be broke for as long as I can. Have bought a basic set of clothes that will work for an analyst and am still trying to figure out what else I might need to not look like a scrub, but outside of that I’m throwing it all into some high yield div stocks and savings accounts.
Throw it into a TD Ameritrade essential portfolio (robo advisor with a low fee) or buy into low fee ETFs and let it sit. Better to invest the money now so you can build up that nest egg. Maybe save $8k in case you want to take a trip or have other expenses pop up.
How about just do all of the above. Spend some on stuff you want to do, save some for liquidity purposes and invest some
So, without going into your specifics, there are some general financial planning rules of thumb:
Obviously these are all generalities, and nobody can tell you how quickly you need to get there, but they work pretty well as guidelines.
If any money left after matching 401k, put in 401k to the max or use other funds?
These are questions that require actual planning help.
-Are you set with the emergency fund?
-What's the next goal? If you're saving for a house a 401k is a bad vehicle
-How good are the investment choices in your 401k?
-Do you have a Roth option? Do you want to go Roth?
-Are you eligible for an IRA? (Deductible, Roth, etc.)
You really need to talk to a professional at that point or do a bunch of reading. Anybody on this board who knows what they're talking about isn't going to help you with those questions here for legal, compliance, and compensation reasons.
Agree with Simp4EBITDA but enjoy your savings and your senior year without buying dumb materialistic shit.This is the most free time you'll ever have so find some fun things to do despite Covid. Get an Airbnb with the boys, go to a beach, idk. Depends on your comfort but I'm all for spending on experiences.
Some ideas:
- I know you said you don't care about retirement yet but open a personal IRA and max it out ($6k). High risk stuff can go in there.
- Have some assets liquid so you can move and buy decent furniture. If you're living in NYC, lets call it ~$12k that doesn't need to come out of your first few checks. Stay vigilant over the winter/spring if you see some good rental values out there. Get something nice when you first move so you don't need to spend on multiple moves while you're young. Common mistake that recent grads make is renting a dump and upgrading every year. That is a lot in broker fees, moving, furniture, etc.
- Maybe the remaining in a personal account to set a foundation of solid funds or whatever you want. Dollar cost average and build meaningful, diversified positions from there. Equity valuations are ridiculous right now but you should have a long term investment horizon at this point anyways. If markets correct in late Q3/Q4 that'll be a good entry point.
Good luck and congrats on being in great financial shape.
save till 30s when spending money becomes more necessary for a good time. Nobody really cares about money flexes in 20s
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