19 June 2022 4:46

21 years old and saved up $20,000 from working. What should I do with it?

You should be focused on the following: checking account balance sufficient to pay your bills. savings account with about 3–6 months worth of budgeted expenses. Individual Retirement Account (IRA) – preferably a Roth Tax-free IRA.

How much money is good for a 21 year old?

The general rule of thumb is that you should save 20% of your salary for retirement, emergencies, and long-term goals. By age 21, assuming you have worked full time earning the median salary for the equivalent of a year, you should have saved a little more than $6,000.

What should I do with my $20000?

4 ways to invest 20K

Max out your retirement accounts. It’s never too early — or late — to plan for retirement. …
Let a robo-advisor do the work. So you’ve got your retirement accounts maxed, but you want someone to manage that money? …
Consider a brokerage account. …
Align your investments with your values.

What is the smartest thing to do with 20k?

How to invest $20k: 8 ways to make your money work for you

Invest with a robo-advisor.
Invest with a broker.
Do a 401(k) swap.
Invest in real estate.
Put the money in a savings account.
Try out peer-to-peer lending.
Pay for an education.
Pay off debt.

Is 20K in savings good?

A sum of $20,000 sitting in your savings account could provide months of financial security should you need it. After all, experts recommend building an emergency fund equal to 3-6 months worth of expenses. However, saving $20K may seem like a lofty goal, even with a timetable of five years.

What to do with $20 K in your 20s?

Here are four smart ways to invest while you’re in your 20s.

Fully match your employer-offered retirement plan. …
Open an IRA or a Roth IRA. …
Automate your investments. …
Start an emergency fund. …
Diversify your investments. …
Increase your retirement contributions. …
Pay off your high-interest debt. …
Open a 529 if you have kids.

How much money should a 20 year old have saved up?

As you get deeper into your 20s, you should shoot to have about one quarter of your annual cash (25% of your gross pay) saved up, according to a spokeswoman for the budgeting app Mint. That means that the typical 25-year old might want to have somewhere around $10,000 in savings. Curious about where you stand?

How much should you save in your 20s?

How much do you need to save in your 20s? As you embark on your career and set the path for future finances, your 20s is the time to set strong savings habits. Using the 50/30/20 model, you could be aiming to save upwards of $500 every month (or as close to 20% as you can).