![]() The best part? Some employers will also provide a matching contribution for your savings. (People with piles of high-cost student debt should seek help.) But there’s a strong case to be made to both invest and pay down your loans simultaneously, if you can. Depending on the type of person you are - maybe you detest debt or like to tackle one big task at a time - it might feel better to pay down your loans first. That logic doesn’t necessarily apply to your student loans. If you’re earning 7 or 8 percent over the long term in the stock market but paying 15 percent on a card, you’re better off tackling the debt first. If you have really high-cost debt - like credit card debt - you want to deal with that before investing significant amounts of money. (Capital One 360, for example, lets you set up different savings accounts, which you can label for different purposes - emergency fund, annual vacation and so on). You can find the best interest rates at online banks, and the easiest way to get started is to set up regular, automatic transfers from your checking account. That means your savings are insured by the federal government, up to certain limits, if the bank fails. in a traditional bank account that’s backed by the Federal Deposit Insurance Corporation. Most financial planners suggest keeping at least three to six months of living expenses in cash - to cover the basics like rent, food, utilities, loan payments, student loans, etc. There are a couple of items you want to deal with first: preparing for a financial emergency and creating a plan to attack any high-cost debt you might have.īuilding a financial cushion will help soften the blow should your money situation change, whether that’s because of the loss of a job or because of a giant unexpected expense. This guide can help - consider it your road map to investing. And after you go through the motions once, you can set your plan on autopilot for a while.īut narrowing down all the alternatives and figuring out where to turn? That can be paralyzing. Even getting advice from professionals is easier than it was for previous generations. Many mutual funds cost just fractions of pennies for every dollar you invest, and some firms are dangling them for free. The good news: There are more attractive options for entry-level investors than ever before. You also need at least some basic knowledge, which probably wasn’t covered in any of your classes in high school or college. ![]() Investing doesn’t have to be that complicated.īut when you’re just starting out, it can be hard to knock it off your to-do list because you have so many competing demands - a budding career, rent and student debt, to name just a few.
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