Talking about money is difficult and not everyone is in an environment that is welcoming to this. Some of you actually reach out to me to talk about money and I am thankful and humbled! There are several ways you can ask me for financial advice through email, webinar, and free financial coaching sessions. All of these require you to share a form of identity with me.
However, I understand that privacy is important and there should be a way to ask personal finance questions without revealing your identity. Over the past month, I began building the "Ask Alan Advice" column leveraging an anonymous Google Form.
Anyone can ask questions using the anonymous Google Form and I will answer them in upcoming blog posts. The only requirement to hear back is subscribing to newsletters here.
Funny enough, someone actually submitted a request for advice before I formally introduced the "Ask Alan Advice" column. Here I go answering this request!
As a fellow CUNY graduate, I'm happy you are reaching out! First of all, I want to say you are doing great with a part-time job and already thinking about your financial future - especially during 2020 with a recession and a pandemic.
You are definitely not getting ahead of yourself. You do not need a full-time job to get your financial life in order. The only thing you need is the desire to improve yourself and you have that.
To save and invest for retirement or any financial goal, you need to have a surplus of cash at the end of the month. If you don't already have a budget, then you need to create one.
Start by recording all of your income and expenses on Excel/Google Sheets or use an automated service like Mint (not sponsored by any of these tools). NerdWallet has a great article on the top budgeting apps. It does not matter which tool you use; what matters is that you start budgeting.
With the surplus cash, I would open up an Individual Retirement Account (IRA) for retirement. If you are not sure about whether an IRA is right for you, then check out the official documents from the IRS. Typically, IRAs are great tools to help you save money on taxes and save for retirement.
In addition, feel free to check out the guide detailing the steps to open an IRA account with Charles Schwab (the steps might have changed due to website updates, but the general idea is still there).
Although I cannot comment on specifics for what investments are best for you, I can tell you that I mainly invest in total market index funds.
Another suggestion is to open up a high yield savings account (HYSA) to save for an emergency. HYSA is basically a savings account with higher interests than a regular savings account. (0.01% vs. 0.60%+) Bankrate has great information on popular HYSA accounts.
And finally I agree that a full-time job would make a big difference. There are many benefits that come with a full-time job such as a 401(k), health insurance, career mobility, and more. However, while a full-time job should be one of your goals, you are not required to have a full-time job to open an IRA or a HYSA.
If I were in your position, I would prioritize the above suggestions as the following:
- Create a budget including all of the income and expenses
- Open an IRA for retirement (make sure to read up on eligibility and benefits on the IRS website)
- Open a High Yield Savings Account
- Focus on the Full Time Job
Please remember that I am not your financial advisor and do not have a complete picture of your financial situation.
All I can offer are resources and information, and you should do your own research to make your own financial decisions. Good luck!
I enjoyed answering my first question and look forward to more. Ask your own question anonymously here!