this post was submitted on 20 Jan 2024
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Congrats and well done! Take some time to celebrate! (And then max out your 401k if you’re in the US and you haven’t already)
Yeah I'm bad at figuring out how stuff like that works tbh lol. I think the last time I looked at my 401k stuff it said that I should be contributing more than I am for some reason. Gotta figure out how to adjust that.
I'm going to have some new financial goals now, but I'm not sure what they'll be. If it should be something like working towards paying down loans first, which loans to pay down first (I have a very large amount of student loans after all this and I also have a mortgage), or if I should work toward improving my living space and making it nicer. We'll see I suppose!
Might be worth working with a financial advisor, we just got one and I feel much more comfortable with my money stuff
Wwell I know at the very least, a financial advisor probably would tell me not to invest it in my home like that. That part would be me weighing doing something for myself that isn't totally necessary vs. the more responsible financial decision. But a financial advisor might not be a bad idea in general!
Any discouragement about upgrading your home should be taken in the context of you living in your home. If you are going to move in the next couple of years not spending 20k to upgrade your kitchen when you can apply that 20k to your next house is a good choice since it probably won't increase you sale price. But if you plan on staying a decade, get the upgrade and enjoy yourself.
Yeah, living space upgrades are not a good financial investment.
I would suggest you pick a few smaller or low cost upgrades to get the most bang for the buck, for example, fix up your entryway, fix up your curb appeal a little. Make your space a little more pleasing to walk into.
Get some savings going for emergencies, and start paying down your loans from highest interest or lowest interest. You may be able to look at consolidating the loan with a private bank to get a better interest rate.
I guess my point is that just because it's not technically a good financial investment doesn't mean that it's necessarily always a bad idea. You have to do things for yourself now and then too. We only have one life on this planet and living like you're homeless just so that you can pay some giant corporation off slightly quicker isn't necessarily the right move for mental health and general life happiness, even though on paper it's the best move financially.
In general, I would consider myself to be fairly cheap compared to some others I know. I don't have a ton of expenditures and I don't carry any "bad" debt like credit card debt or anything. My loans are only my mortgage and federal student loans.
Yeah, too many people look at the numbers and try to give advice solely on those. However, while it would be nice to maximize your returns, the entire point of working for money is to benefit your life. I understand that part of this tendency is that common bad spending g habits benefit the current self at the expense of future self, but we all should be looking for that balance where both can be happy
Yup, exactly! It's figuring out that balance that's the important part. I've known people on both ends of the spectrum...some who spend excessively to the point where they go into massive debt, and some others who take the opposite approach and never do a single thing nice for themselves. Interestingly, two people I was closest to in my life exhibited these polar opposite behaviors, so I'm able to witness these effects firsthand.
It's a process trying to find the right balance. I'm at a bit of a life crossroads and trying to figure out some of that myself. I think for me, personally, I actually need to start spending a bit more on life experiences as opposed to saving every penny.
I agree. I didn't mean to suggest you should not do upgrades. I was suggesting you should do upgrades for you. In fact I would say that you should specifically do it as a reward for meeting certain goals that you set for yourself. Be your own source of positive reinforcement and rewards, not just your salary, but how you spend your salary.
I just mean like, don't install a swimming pool now for $50k because you think you'll get it back when you're able to sell your house for more money. Such improvements might boost property value, but you won't get a positive financial return. If you want to buy a pool, do it because you want to go swimming and because you met your goals and deserve a nice reward.
Also, upgrades are expensive. If you've got debt, focus kn the debt. Look for smaller, higher value upgrades. For example, if you have a home office, don't remodel the entire office, buy yourself a new desk and chair. Another idea would be to hire a pro to come in and install modular closet storage; an upgrade to make your life easier, more organized and efficient and that you'll use and appreciate every day.
Oh don't worry, I'm not offended or anything! I don't expect people to know my entire financial situation and my financial knowledge from a single post! It's just that I know a lot of moneybros go ham on the "save and invest every penny" model without looking at the bigger picture. Was just a comment on that is all.
Yeah, I would be putting money into it knowing that it wouldn't really be a ROI to sell, just for my own personal pleasure. The tricky part is figuring out what decisions to make!
As well, if there are large credit card balances, consider a zero interest for n months, and see if you can pay that off within that time.
I’m sure there’s a personal finance thing around here somewhere!
Personally, I’d work on making sure I have a cash safety net. Something like 6 months expenses in my favorite high yield savings account.
After that I would pay off any loans with a high rate. If the rate is <5 percent, it may be worth putting that money into a 401k or investment account. If it’s above 5 percent, I’d consider paying it off early. The idea being that if it’s a low rate then you can invest that money and earn a higher return than it would cost you.
Aside from that, I’d do my best to max my 401k contribution to take advantage of those sweet tax benefits. If nothing else, make sure you’re taking advantage of any employer matches.
Again, awesome work on the job!
Doing your best for both your present and future self is usually a balance.
Some functions that were helpful to me were
Remember the most important part of your retirement savings is just doing it. The power of compounding returns over many years can be more important than which investment might do best. Remember that your contribution is something you control whereas most investment choices are speculative and you have no say over whether they do well or not
Hi, congratulations! I’m so happy for you. Please consider a reputable financial advisor. Not some slick, well-advertised person, but someone who comes with a decent reputation. When meeting with them, use some intuition, don’t fall for flattery or wild promises. You can always say you want to consider their advice. Some lawyers also offer this type of service. I woods encourage you to be kind to others and our environment, with your investments.
Congrats again, well done!
Check out The Money Guys on youtube, they give good financial advice
Thanks for the recommendation!