Author Topic: Major Newbie - not sure where to start...or if i even can.....  (Read 2167 times)

lindsayk

  • 5 O'Clock Shadow
  • *
  • Posts: 31
Hello,
Ive been reading the MMM blog for awhile now and and various posts on the forum....Financial Independence sounds amazing and goal I would love to achieve. Im just not sure where to start...here's my situation

Single & 32yrs old. Income is around $25,000 a year after taxes and health insurance from full time job and I have a very small very part time photography business that after taxes and expenses I probably profit $5k a year. It could definitely be beefed up to bring in more income.
My full time job has a 401k option where they will match up to 5%. I have not contributed to it yet as I am recently divorced and needed all my income to stay afloat. Im making headway on debt and could start to contribute to it. However, when initially meeting with financial advisor/investor who handles this via my employer....i was asked how and where I wanted to invest this money. I have no idea. Any suggestions? Also, I have $22,300 of debt. $15k of that is student loans and the rest is 2 credit cards. And I have basically only $500 in savings. It feels pathetic but im working on it. My main priority right now is getting rid of my debt as fast as I can. Im not sure if I should just concentrate on that right now and use any and all extra funds to throw at that(Dave Ramsey gazelle intense) or if i should also start contributing to my employer matching retirement fund? Im really intrigued/fascinated by the investing and compound interest and the Mustachian way of life. Im a simple girl who doesnt need much to be happy and wants to live life without having to worry about making sure I get 40hrs in this week and when is my next big photo shoot so I can have some wiggle room. I appreciate any and all suggestions/advice/face punches, etc :)

Have a great day!

frugalnacho

  • Magnum Stache
  • ******
  • Posts: 3401
  • Age: 36
  • Location: Madison Heights, Michigan
Re: Major Newbie - not sure where to start...or if i even can.....
« Reply #1 on: April 17, 2015, 08:39:22 AM »
Definitely contribute to the 401k to get the match.  If you put in 5% and they put in 5% that is an instant 100% return on your investment.  It's silly not to take advantage of that.

plainjane

  • Handlebar Stache
  • *****
  • Posts: 1675
Re: Major Newbie - not sure where to start...or if i even can.....
« Reply #2 on: April 17, 2015, 09:07:45 AM »
Contributing to the match level is the best return you could get on the money, so I'd recommend doing that.  Other people can pipe in on where to put the money.  On the MMM forum we tend to be big fans of indexes and very low management fees.  The financial adviser should be able to provide you with a list of available funds and MERs.

After getting the match, your priority should be the credit cards.

If you want to share your monthly expenses & income, people on the forum might be able to suggest some ways to find extra cash, especially if you're willing to truly go "gazelle-focused".

MDM

  • Walrus Stache
  • *******
  • Posts: 9611
Re: Major Newbie - not sure where to start...or if i even can.....
« Reply #3 on: April 17, 2015, 10:02:12 AM »
Contributing to the match level is the best return you could get on the money, so I'd recommend doing that.  Other people can pipe in on where to put the money.  On the MMM forum we tend to be big fans of indexes and very low management fees.  The financial adviser should be able to provide you with a list of available funds and MERs.

After getting the match, your priority should be the credit cards.

If you want to share your monthly expenses & income, people on the forum might be able to suggest some ways to find extra cash, especially if you're willing to truly go "gazelle-focused".
+1

See http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-%27case-study%27-topic/.

lindsayk

  • 5 O'Clock Shadow
  • *
  • Posts: 31
Re: Major Newbie - not sure where to start...or if i even can.....
« Reply #4 on: April 17, 2015, 10:13:24 AM »
Going to start a case study in Ask A Mustachian! Thanks so much!

James

  • Handlebar Stache
  • *****
  • Posts: 1680
  • Age: 46
  • Location: Rice Lake, WI
Re: Major Newbie - not sure where to start...or if i even can.....
« Reply #5 on: April 17, 2015, 10:29:27 AM »
As a newbie to MMM, I have two suggestions. First, decide to jump in head first. Don't try and ease your way into the water, best to jump in and adjust all at once. Otherwise you prolong the pain and it is hard to keep the momentum.

Second, set aside 30 minutes a day and read through the blog archives. Doesn't matter forward or backward, just work your way through the MMM blog entries and get a feel for how this philosophy works. A lot of the answer to your questions will become obvious once you get an understanding of how it works. Not that you won't need to ask questions here, but it will make more sense overall.

Make sure to read this: http://www.mrmoneymustache.com/2012/04/18/news-flash-your-debt-is-an-emergency/

I agree with the others, contribute to retirement fund to get that match, and just put it in the cheapest index fund they offer. By cheapest I'm referring to the expense of the fund, hopefully they will have a full index fund around .02 or .04% expense. You can figure out whether to add bonds or diversification later, just get it started in a cheap index fund to begin with.

If you want help with your overall expenses just list your monthly expenses and we can offer suggestions and help you make a plan to get your ship headed the right direction. You aren't in terrible shape, you have a full life to figure it out and get back on the track you want to be on. But the faster you find that track and get thing headed the right direction the better off you will be and the better you will feel about your life.

J.Milly

  • 5 O'Clock Shadow
  • *
  • Posts: 33
Re: Major Newbie - not sure where to start...or if i even can.....
« Reply #6 on: April 17, 2015, 05:29:36 PM »
Honestly being in University and working only part time left me tight. I really had to work on lowering my unnecessary expenses (mostly frivolous stuff) and kept saving my 200-300$ every 2 weeks. Ive gotten up to about 18k in the last year and a half (taking advantage of any match from my employer was worth it). Its tough but you gotta put your mind to it and do it! I just started as well dumping my cash into index funds (LT investing) and keeping a small cash cushion to last me a couple months. But your first target is that high interest debt! Work on dumping any extra cash you have into that!