How should you invest $10K? Readers were talking about this on our money roadmap post, and I thought it might be helpful to talk about more. Maybe you’ve recently gotten a bonus or small inheritance… maybe you’ve just been saving for a while and are now saying, OK, let’s invest this sucker. So what are the options? (Pictured: I’m kind of obsessed with this metallic teal wallet from Marc by Marc Jacobs (there’s a phone wristlet too!) The wallet was $208 but is now marked to $104 at Nordstrom.) I’m not a personal finance expert, of course, but here’s what I’d do (assuming you already have a fully-funded emergency fund and no credit card debt. If you still have student loan debt, you may want to look at your interest rates and pay off all or part of a loan that has a particularly high interest rate.) Beyond that, though: [Read more...]
We’ve talked about a ton of different money issues here, but it occurred to me that it might be helpful to do a simple “roadmap” post — a listing of what to do, in what order, with links to the appropriate posts. So here’s my list of what to do with your money — if I were advising a friend, this is what I’d say. Readers, what would your roadmap look like? Would it be any different? (Pictured: Halogen Cassie Patent Leather Phone Wallet, originally $48 but currently $32.16.)
1. Figure out what your money situation is. Do you know how much you have in each account, where it is, and how much interest it’s earning? Do you know what your debts are, and how much interest you’re paying? I like Mint.com to keep track of multiple accounts (and I particularly like that it will email multiple email addresses with weekly updates — great if you’re married or otherwise in a joint banking relationship). [Read more...]
How much do you keep in your emergency fund? WHERE do you keep it? How often do you re-evaluate it? We haven’t talked about emergency funds in a few years, so I thought we should revisit. (Pictured: Tory Burch Priscilla Wallet, was $250, now $175 (also available in fuchsia, as well as in a zippered pouch on sale for $66).)
The basics remain the same: the suggestion I always see is to keep three to nine months of living expenses (mortgage, rent, loans, food, basic living needs), easily accessible in case you’re laid off, fired, quit, or are otherwise unable to work — or if you have some other huge unexpected expense, like if your car breaks down or you get in an accident and have bills to pay.
Kat, I’m wondering if you would consider a post about certain types of insurance such as life insurance, disability insurance, and umbrella policies? I’m wondering how people decide on buying additional insurance beyond what may be included in work benefits?
What money moves should you make in your 20s — and what should you avoid doing? Rhiannon Payne, editor in chief of Feminspire, reached out with a fabulous guest post on this very topic. I think her tips are solid however old you are, particularly if you’re just starting a new career with more money (like I was at 27, my first year in BigLaw). Thank you for guest posting, Rhiannon! (Pictured: Lodis Accessories Audrey Cassie Cell Case with Wristlet, available at 6pm for $36.99.)
So you’ve finally landed that amazing job, the one that pays you enough to not only cover your rent and other basic expenses, but also affords you the luxury of having money left over – money that you’re not sure what to do with. The options seem limitless. While you once had to count up the pennies in your change jar if you wanted to buy a new outfit, you’re suddenly thinking about all the exciting ways you can improve your life with your new funds. Things you would have never considered are suddenly options – a tablet for working on the go? A newer, shinier car to replace your old model? The fancier silverware sets from Bed Bath & Beyond?
This is a trap that a lot of young people fall into, especially when entering the workforce after college or going straight into the professional world in their early 20s (the latter was me – I set my sights on an industry where a degree was more of an option than a requirement, and I didn’t want to risk a negative ROI on my tuition). Unfortunately, the financial education provided to American students, in both high school and college, is generally pretty limited. When a young person starts earning a healthy income, they often have no idea what to do with their money. Thus, some unfortunate financial decisions usually occur. This is especially true for women, who not only make less (on average, $0.77 to the dollar) than men, but are traditionally given even less financial guidance than their male peers. [Read more...]
I absolutely love your Tales from the Wallet series, but I find a lot of the lingo is a little over my head. I do understand that most of your readers are lawyers and professionals with sizable incomes, but I was wondering if you had any book recommendations for readers like myself. I didn’t invest in a 401K through my employer because I didn’t understand it. The idea of having money deducted from my account for a stranger to manage and crossing my fingers for the best didn’t sound very appealing to me. After reading some of the comments, it looks like there’s more to it. I currently don’t have any investments and want to start to learn about vehicles to put my money in. Please share absolutely any resources for new investors! Thanks!
Everyone has to start somewhere, so I think this is a great question. We’ve talked about tax-savvy investments on here, of course (and may answer some of your 401K specific questions), but in general it can seem daunting to learn about personal finance. (Pictured: Kate Spade New York ‘Popsicle’ Coin Purse, $78 at Nordstrom — according to the reviews it’s surprisingly functional!) I’ve read a bunch of personal finance books over the years; these are the best ones that I would recommend for newbies: [Read more...]