I'm a college student about to head out into the job market, people talk about starting your savings early (which I am all about) but can you talk a little bit about the big things we should be saving for and when? Like should I start saving now for retirement or should I build up a "nest egg" first? What takes priority? And is it better to save up a lot for one thing or a little for several things?
Are we still doing shoulder shimmies? Is that still a thing? Whatever, I don’t care. HERE WE GO, BITCHES.
We the Bitches suggest you save up for stuff in the following order:
$1k emergency fund. Do this first and all at once. You should have this in place when you’re independent. So, about age 18 for most people, 22 for others, and later for others.
401(k) or 403(b) retirement fund. You should start this shit as soon as you get your first job. It’s take directly from your paycheck, so you barely have to think about it. Just ask your employer to opt in!
Roth IRA/Traditional IRA. If you don’t have the option for a 401(k) at your day job, do this instead as soon as you get your first big kid job.
Paying off your debt. If you don’t have student loans or credit card debt, skip this part. But basically, your savings will get you nowhere if you’re not prioritizing your debt.
A home. The debate between advocates of renting and advocates of buying property is long and fraught. Srsly, we lost a man last month. Owning a home is not for everyone, so here are our lengthy thoughts on the matter.
A larger emergency fund. Shoot for $5k. Or if you’re debt free and have great credit and steady income, use a credit card as your emergency fund.
A Vanguard index fund. Listen, Vanguard isn’t paying me to write this (though hello Vanguard, please feel free to donate to our PayPal account at any time). They’re just the first investment firm to make index funds a normal thing, and so far they’re the best at it. An index fund is safer, simpler, and cheaper than any other form of stock market investing you can get yourself into.
The fun shit. Want a car? A trip abroad? Get your financial house in order first. Aside from the emergency fund and the retirement fund, everything else can happen a little at a time or in one fell swoop, as you prefer.
You can’t just SAVE your way to retirement. You have to INVEST as well, which is why most of the above is about investing your savings to make them grow to your benefit. Get crackin’, kid.
