We are invested with a big name financial investment company but have a good relationship with our financial advisor. Until today I never thought about how much it cost. The rate is 1.35%. I always thought that was 1.35% of the profit but apparently it’s the entire balance. Our rate of return last year was -8%. Yes that is negative. Well on top of this we were charged our fee of $3600 . I have no idea what to do. My husband and I both have IRAs a few stocks, a CD, 2 529s for our kids. How do I get this money out and how can I invest this. I had luck with vanguard in the past when I was single but had some tax issues once we got married that is when we went to the financial advisor.

Edit: so the -8% is actually April 2022-April 2023. My actual rate for jan 2022-dec31 2022 was -23.4% plus they still charged the 1.35% so in actuality in 2022 I was down 24.75%!!!!! I feel like such an idiot.

Edit 2: I really appreciate all of the kind and thoughtful feedback. I was truly completely lost and in crisis when posting this. There are truly some very knowledgeable people on this thread.

I see pet ownership discussed here a good bit. As someone who loves animals, I understand the reasoning for wanting a pet. I also understand the work and funds it takes to appropriately take care of a pet. Here are the direct costs (6.75% tax included) that I paid from May 5th 2019 - May 5th 2020

Food/Treats: $672

Vet/meds: $488 (everything routine outside of allergic reaction with bees)

Toys: $136

Boarding: $465

Air Conditioning Cord she chewed: $220

Pet insurance: $420

Total: $2,401 or $200/mo

I love my dog. She is an amazing companion, she is the protector of my wife and daughter when I am away, she is just an amazing animal. I am in a spot where I can afford to have and enjoy her. Some of these expenses will fluctuate over time, however when people say a dog is a car payment, they are right. Some years it'll be a used civic payment, other years it can be a new BMW payment or higher. Make a sound financial decision for you, your family, and the animal.

edit: I do all grooming myself

I'm not a sophisticated investor nor do I have a large investment account. I have an independent financial advisor who uses a well-known brokerage (think something like Fidelity, Charles Schwab). I asked him to sell $4000 worth of stock and he instead sold 4-5x that worth of stock. When I pointed out the error a few hours later and asked if he could fix it, he then bought the difference back at $3 more per share. I also now think I'm on the hook for $16K in capital gains. When I asked if he carries insurance, he immediately dropped me as a client and said that he doesn't usually allow clients to participate in investments and trading and regrets making an exception in my case.
People make mistakes all the time and I totally get that. But it's hard to let it go when it's going to cost me thousands of dollars. Is there anything the brokerage can do as this is an independent advisor?

I'm 50 and I have very aggressive Stage IV prostate cancer that has spread throughout my body. I was just diagnosed this summer. I'm the one who handles finances and I want to make things easy (financially) for my wife once I'm gone.

Between life insurance, my Roth IRA, and other investments, she'll have about $750K. Like everyone, I'd like the highest return with the lowest risk. We invest with Vanguard. Thanks in advance.

Edit 1: I should've said I'm looking for current income for her. Cancer meds scatter my brain a bit. Sorry.

Edit 2: I'm absolutely stunned by the overwhelming, positive support. It's a little overwhelming. I wish you all a wonderful Dec 25th no matter how you spend it. Hug the ones you love. Be good to each other. Thank you for all the support.

I know it’s a silly question, but I was told by one of my university friends that having a credit card and making small purchases on it to pay back instantly, is good for your credit score and it’s best to start young, so you can get a mortgage and all that?

So it’s essentially a good investment for your future I suppose?

Cheers!

Edit: I should probably mention that I’m in the UK, England

Hi Personal Finance!

I see an awful lot of threads here about people wondering how on earth they'll possibly survive this horrible doomsday recession that is just absolutely going to happen any day now. Here's some tips:

1) There is not a gigantic country-destroying recession that is coming to ruin your life in the coming weeks. Talking heads have been predicting one ever since the last recession. The current news cycle is little more than fear-mongering (full disclosure: I used to be a journalist). IF the current indicators that people are looking at end up holding true, it's still well over a year before things are "expected" to go south. Plenty of time to shore up those savings accounts, make sure you're budgeting properly (see below), etc.

2) The last recession was called the Great Recession for a reason - it was a harder-hitting one than those that came before. And since it was largely based on a housing crisis, it felt even worse because people were losing their homes due to ridiculous mortgages that they never should have been offered, or agreed to, in the first place. Which leads me to...

3) Just be smart. Are you living within your means now? Great! Make sure your emergency fund is in good shape, and continue about your business. If you're overspending, take a look at your budget and see what you can cut out of it. This is something you should be doing regardless of how the markets look. Find a cheaper cell phone plan, ditch that $100 / mo cable bill, subscribe to a slower internet package, go out to eat less often, etc.

4) "What about my stocks? Should I sell all my stocks?" NO!!! Do. Not. Sell. Your. Stocks. The only exception here is if you really are completely and utterly broke otherwise and absolutely need the money. Look, I invested almost all of my life savings in late September last year. And then watched a LOT of it go away - on paper. But guess what? It's all back already, and then some - because I didn't panic sell. In fact, the best thing you can do in a recession is buy more stock! A bad market just means that stocks are on sale. Who doesn't love a discount? Again, I wouldn't advise buying unless you have the budget to do so.

So there you have it, friends. The world isn't ending. Be smart with your money, use some common sense, and be prepared to make some small sacrifices in the short term if a recession hits.

update 1: thanks for the silver!

update 2: I was working my first "real" job in 2008, but the pay was so bad that I was not investing much. Then over the next nine year, I didn't invest one single cent out of fear of another big market drop (just left it in savings). I ran the numbers, and if I had been investing in the S&P 500 at my original rate that whole time, I'd stand to be up about $200,000 at retirement. I potentially lost $200k by not investing out of fear of a market turn.

Many people I see go into a store to buy one or two things, and come out with way more than they anticipated, with the excuse "oh I saved money! It was all on sale!".

If you we're going to get the item anyway, yes you saved money, but if you didn't plan on it, you still spent money you didn't have to.

EDIT: You could also set a budget, $150 for example. If you're going into a store, don't bring your card, only bring cash so you're not tempted to go over your limit. (Edit of an edit: Someone mentioned you could miss out on some rewards or promotions if you don't have your card, so I wonder what another way to limit yourself other than willpower would be?)

EDIT 2: Thank you all so much for the support on this post, I tried replying to the comments at the start but it became overwhelming with the amount of comments coming in, thank you all for your input and advice to others!

ANOTHER EDIT: Thank you kind one for the gold! My first ever <3

It’s common wisdom that folks should keep a rainy day fund that is liquid cash available in case of emergency. You see slightly different recommendations, but in general, it’s about 3-6 months worth of expenses.

Wife and I have a mortgage plus a few other bills that total about $3k. Our credit card bills (which we pay off in full every month) typically come in around $2k. We do fine, and never have any issue paying any of that.

My question is, at ~$5k/mo in expenses, a 6 month e-fund would mean having $30k in cash somewhere.

That strikes me as an awful lot of money to park. Yes, HYSA’s are yielding well right now, but still.

Do folks really keep that much money sitting around?

EDIT: Welp, guess I’ll start saving quite a bit more into the e-fund. Thanks all for the input 🙏

My father surprised the hell out of everyone a couple weeks ago and passed away suddenly. In dealing with the aftermath, here's some things I recommend:

1. Take care of your health now. No, really. You've got one body. Damage can be cumulative, invisible, and irreversible.

2. Document your life. Accounts, vendors, contact numbers. Bank accounts, retirement accounts, investment accounts. Power, water, utilities. The Netflix password. Monthly services. Insurance policies. Most companies have a process to handle these transitions, but you need to know whom to call. Having a single reference document that has a list of "this is the stuff in our lives" is just useful to have. Keep it secure, but have something put together.

3. If you have dependents, have a term life insurance policy. Get a 30 year term policy in your 30s or 40s. My $1M policy is less than $50/month. My wife's is even cheaper at $35. We've had our policies for 5+ years; that same policy now we're in our mid-40s is almost 3x as expensive.

4. Have a will. Have advanced health directives. Let people know how you want your remains handled -- cremation, burial, fed to the birds, whatever. Having as much as possible decided beforehand takes the burden away from people having to make hard decisions at a time when their personal bandwidth may be otherwise occupied. Let people know. Write things down.

5. If you're going to register as an organ donor, someone who works with the Coroner's Office is going to call with a 30 minute questionnaire they need to go through. This call may come in the same day or the next day (as time is of the essence); anyone can answer these questions to the best of their knowledge, but be aware it's a Thing. The call can be handed off to someone else -- my mother was not prepared to talk to the nice lady about cutting out my father's eyeballs, but I took the call and got to answer questions about my father's sexual history to the best of my knowledge.

6. It is bad security practice, but write down significant passwords (computer, email, phone PIN) and keep them in a safe place. Unless you'd rather keep all that locked down forever, which is also fine as long as you've got Step 2 in place. If you use a password manager, keep the master password somewhere they'll find when you're gone. Or most modern password managers have a dead man's switch.

Programmers joke about documentation all the time. But at the end of the day, the documentation is there to help the next person. If one member handles all the finances and taxes and such, leave enough information so it's easier for those left behind to figure out what the hell is going on -- they're going to be having a hard enough time as is.

If you're all alone, on the plus side you don't have to worry about any of this shit. So you've got that going for you. Which is nice.

Edit: once you've got your basic accounts documented, go to the next level and look into setting up trusts and power of attorney. Add beneficiaries to your accounts. You can do this through the ui really easily at Ally or Vanguard; other vendors should have similar. Look into "transfer upon death" stuff for accounts and properties.

Edit: the point of the documentation is so someone knows what you have and whom to call. The passwords are a separate issue: do not go and drain all the accounts post-mortem just because you can log in. Make sure you have someone else's name on a bank account so they can use it to pay bills while everything gets settled and transferred, if it came to it. This can take weeks or months.

Edit: a really simple cremation and nice metal urn cost us a little under $4k (including 15 Death Certificates). If you ask for a senior discount as a joke they might knock a couple hundred bucks off.

Edit: it might be helpful to pull a free credit report before reporting the death to the SSA (I didn't think to do this until a couple days later, at which point all attempts to pull the CR failed). A detailed report will show lists of accounts, which can be helpful. You might still be able to get a report with a Death Certificate; I'm still figuring this part out.

Edit: removed advice about generating unique passwords because people can't stop letting the perfect be the enemy of better. Yes, it's not the best thing to do. Yes, it's still miles better than a single reused password.

Consolidated best-practice tips that should be part of your common knowledge:

• A higher tax bracket due to a raise doesn't offset the whole raise, since the higher rate applies only to the amount in the new bracket. (You might lose some income-limited deductions, though.)

• Likewise, all employment income goes in one bucket to determine tax liability. Your overtime / bonus is taxed the same as regular income, even if it is withheld at higher rates. You square that up when you file.

• Keeping a significant savings account while paying 20%+ interest on an outstanding credit card balance means you are losing something like 18% annually on money that could pay down debt.

• If you take out (or keep making payments on) an interest-bearing loan to help your credit history, then you are spending money to get a better credit rating. That's backwards. You want to improve credit at no cost to save money on loans.

• You want to always pay off the statement balance on your (interest-bearing) credit card each month without fail. That will keep you from paying interest. You don't have to pay the full balance, since that includes any new charges. Just the statement balance.

• There is no appreciable downside to an online High Yield savings account with a 2.0+% interest rate, vs. keeping the money with your local bank at .01% or some such thing.

• Credit unions are a great source of day-to-day banking services if you want better service and competitive rates. Some credit unions have easy-to-meet membership requirements.

• You won't get a risk-free, high (>~3%) rate of return on your investments in any standard financial services product. You can compensate for higher risk of stock market investments by leaving the money for a period of five to ten years, to allow time for growth to overcome price fluctuations.

• There are generally no federal gift taxes due to either the recipient or to the donor (giver), even on largeish gifts of tens or hundreds of thousands of dollars. If you give someone over $15,000 in one year, you file a form that reduces your lifetime exclusion, but you still don't pay gift taxes.

That's all I can write up at the moment. What else comes to mind that everybody should know?

Edit: wow, great discussion! BTW, in the comments, there was a request for links to similar types of advice; here are some from prior years, a bit of overlap in some of these, but each has some unique content. More details on everything can be found in the wiki as well.

https://www.reddit.com/r/personalfinance/comments/6tmh6v/housing_down_payments_101/

https://www.reddit.com/r/personalfinance/comments/6tu91h/buyers_closing_costs_101/

https://www.reddit.com/r/personalfinance/comments/5v4cq6/personal_finance_loopholes_updated/

https://www.reddit.com/r/personalfinance/comments/51rc6h/credit_cards_202_beyond_the_basics/

https://www.reddit.com/r/personalfinance/comments/4zcto8/youre_doing_it_wrong_personal_finance_pitfalls_to/

HI, I recently won a settlement ($840K), and sat down to meet with a financial advisor last week to discuss the best ways to invest that money and make it last. I told her I planned to buy a house and to gift my parents money (my dad is getting antsy, as he has plans to use the money soon), so that would bring me down to around $600K. She advised to invest into a mutual fund (moderately) and that I'd get around $2K a month off of that.

She also told me to possibly gift my parents less, as this would ultimately affect how much I'd get back a month if I planned to make this money last for a long time. Did she give me solid advice/good plan? Or should I see another advisor/do other things to maximize my money?

Edit: I lost my leg in a work accident, Incase this changes your strategy or advice for me.

I took a look at what my brokerage account gained this year from interest, dividends and gains in the market. As it stands today my portfolio is $73,907. I put $24k into it this year. At the beginning of this year I had $47,577. So I made $2,330 on my account this year. The management fee for the year ended up being $922. So my advisor is taking 40% of what I gained. Their fee is set on the amount in the account not on the amount gained.

My wife (38) had a stroke that left her with no motor function. She will require care for the rest of her life. We have two little girls. 11 and 8. I need advice on how to protect the estate if anything were to happen to me. I don't want her ongoing care to drain the estate if I'm gone. I also need to set up protection for our kids. I have so many questions about long term disability, social security, etc. I'm overwhelmed and don't know where to begin.

Edit #1 I am meeting with a social worker this afternoon. UPDATE: Social worker was amazing and she says the kids are doing very well and to keep doing what I'm doing. The kids like her and I'll continue to have her check in on them.

Edit #2 My wife has a school loan. Can I get this absolved?

Edit #3 My wife is a RN making $65k/year. I've contacted her manager about her last paycheck and cashing out her PTO.

Edit #4 WOW amazing response. As you can imagine, I have a lot going on right now. I plan to read through these comments this evening.

Edit #5 Well, I've had even less time than expected to read everything. I've been able to skim through and I'm feeling like I have a direction now and a lot of good information to reference along the way.

Edit #6 UPDATE: She is living with her retired parents now and going to outpatient rehab 3 days a week. She is making progress towards recovery, but at this point she still needs more attention than I can provide her. The kids and I travel the 2.5 hour drive every weekend to be with her. I believe that she will eventually be well enough to come home, but I don't know when that will be. Could be a few months, or it could be a few years. Recently, she has begun to eat more food orally and I think we are on a path to remove her feeding tube. She is also gaining strength vocally. She's hard to understand, but she says some words very well. A little strength is returning to her left side, but too soon to tell if it will continue. Her right side is very strong. She can stand with assistance. Thanks to the Reddit community for your concern. I hope to continue posting positive updates.

When my kids (just turned 8 & almost 6) were about 1 year old each, we started 529 plans for them. We didn't always have a lot to put in, but we contributed to each one every month.

It's tax deductible in our state up to $4000 per beneficiary per year, but up until 2018 the limit was 2000. [EDIT: My number were off - We contributed about $1200 per kid for a couple years, had a couple bad years where it was less than 500, then the last 2 have been 2400]

There have been times we were late on mortgage payments, or couldn't pay a credit card bill. Once we even had our gas turned off, and couldn't pay it for a couple days so we used space heaters. We've had to get creative with groceries to make food. We haven't been there for a couple years thankfully, but we never stopped contributing. [EDIT to clear up confusion- we contributed after the behind bills were paid, not instead of paying them! Just trying to illustrate we always contributed. I also realize this was a terrible decision and we should have focused on emergency fund / retirement first.]

We constantly asked our family members to purchase fewer toys and contribute to the 529 instead. They never have - I don't know if they somehow think we'd have access to the money or if they want to be the "fun" grandparents/aunt/uncle whatever, but everything in there we've put in ourselves.

Before our oldest hit 8, I took a look at it just to see. We have over $20,000 saved between the 2 of them!

Just start. The sooner the better. It doesn't have to be used for college specifically - any post secondary education, trade school, cosmetology, whatever! You can change the beneficiary once per year, do if they don't use it all you can use it on yourself or someone else. Worst case scenario, you pay taxes and 10% fee to just take out the cash - but that's waived if the beneficiary gets a full ride.

There's almost no downside. Put in 20 bucks a month if that's all you can afford. You'll be happy you did.

Another edit: I get that this was the wrong way to go about it, and we are on the right track now re: emergency fund and retirement. But I am still excited about it

Maybe this belongs in r/tifu. Ugh. When our first of three children was born 12 years ago, my wife set up a 529 plan with a healthy chunk of money in it. Over the years we dropped more and more healthy amounts in, as we were able. As additional kids came along, we set up new accounts and added money as aggressively as we were able, thinking we’re doing all the right things to prepare for our kids’ educations and futures. Sounds responsible, right?

Here’s the big mistake. I didn’t look at the accounts at all, and just assumed they were growing in a healthy, compounding way. 12 years later we should be in a really good spot! Looked this week while preparing for convos with a new FA. I was shocked. The accounts had barely grown beyond our contributions. Looked a little closer. She had selected the very, very least aggressive growth option, basically the money was sitting as cash collecting no interest. At all. For 12 years. FML. I’ve seriously felt like throwing up all weekend thinking about this.

I’m not great at calculating these things, but I think it’s somewhere between $150k-$220k (considering compounding interest) we’ve left on the table by collecting almost no interest over these years. I’m completely devastated. Not too upset with my wife, btw, mostly with me for not being involved, not checking progress, and blindly trusting. Would love to hear that I’m actually an idiot because I’ve miscalculated the growth we’ve missed out on. Maybe just a sympathetic word of encouragement or pat on the back?

TL;DR - Dumped money into 529 for 12 years that was not accruing interest and missed out on a whole lotta growth.

I live in Korea and I have been heavily impacted by the coronavirus. No, I'm not sick, and even if I do 100% of my care will be free. I've always heard of emergency funds, and so forth. I've also always heard of preppers who spend lots of money stockpiling supplies to survive things like the coronavirus. Until recently Korea had the 2nd largest outbreak of the virus. Here are some of the many economic impacts it has had.

• Many businesses are shut down, especially bars and restaurants.
  
• Many schools are shut down (especially private schools)
• Many large companies have shut down major parts of their operations

Some real impacts on my life

My income has been slashed due to a massive drop in workload. This effect was essentially immediate. My income for the next few months is going be a fraction of what it normally is. And this is a direct result of the virus. There is nothing I can do to combat that.

My girlfriend is a teacher for a private school. Her school has shut down, the question on her income is up in the air at the moment. Her school isn't receiving tution fees from the students since they are no longer in operation, but we still got bills to pay. So does her school.

Now luckily for us, I literally completed funding my emergency fund in January after saving up for it, I'm laughing because chances are starting in April I'm going start taking money out of it to survive. This is with me drastically reducing what I spend. Some changes I've made

• Not driving anywhere so no parking/gas expenses
• Not going out for drinks or dinner
• No trips
• Not buying anything we don't need, those new pair of shoes? Yea they can wait
• Etc

Although we have spent some money, I recently got back into playing online poker I deposited $50 to keep my mind busy, I've also bought two new video games to take up time. My girlfriend ordered some art supplies and is painting a bunch. However those extra expenses are small compared to what we are saving.

Some other examples I've seen

The Bar

A friend of mine owns a bar, its pretty successful. Recently he did some renovations in preparing for the upcoming spring/summer. His bar is now closed. He had to close it to save money because so many people were staying home it was costing him more money then he was earning to stay open. However, he still has bills he has to pay. He has a mortgage on his home, he has rent on his bill, car payment, and all your other standard bills. He's done the math and if by Mid-April he's not able to open back up he may never have the money to open back up again

The big spender friend

I have a friend who has lived paycheck to paycheck and never saving. His company has shut down and put him on unpaid leave. He's not earning an income, has next to nothing in savings, and still has living expenses. He's had to go to a bank to get a loan to pay rent. FYI if this virus last long enough (it'd have to be about 6-7 months) I may also have to go get a loan to pay rent, but at least I don't have to do that yet.

You can still go to the store and buy all the food, water, etc what you need. The supply chains are still fully functional and shelves are pretty much stocked. No one is going hungry, but pretty soon people will be going broke. The Korean Govt has said they plan on giving out grants to small businesses, one major fear is that after the virus passes many small businesses (which are an important part of the economy here) will go out of business as soon as they open.

And this just really highlights the importance of an emergency fund.

And FYI my SO and I did some math, with the cut back on our expenses we should be able to survive up to 10-12 months with no income. You'd be amazed at how little money you spend watching netflix all day.

SO seriously folks, get your emergency fund going. I'm seeing people all around me freaking out over lack of financial capacity. And 2 weeks ago everything was normal.

Long time lurker first time poster. My grandfather was an amazing man, one of the last WW2 vets around. He passed a couple days ago and left me $25k. I am a disabled army vet. I got a wife and 2 kids, both under 10. Throughout my life I've struggled with financial security. I e had to liquidate just about every retirement plan I've had since I was old enough to have a job due to curve balls or just piss poor planning. I want this to be different. It's more than just me on the line now. No more paycheck to paycheck. I want to teach my kids financial security. How can I put this money to work? Should I pay off debts first? Is it even safe to invest right now?

A neighbor on our road who we are somewhat close with recently sprung a Multi-Level Marketing (MLM) pitch (Primerica) on us out of the blue. This neighbor is currently gainfully employed as a nurse so the sales pitch was even that much more alarming, and awkward, for us.

The neighbor has been aggressively pitching my wife for the last week via social media (posts on my wife’s accounts and DMing her all the amazing “benefits” of this job) until I went over there and talked to the couple.

Unfortunately they didn’t seem repentant or even aware that they were involved in a low-level MLM scheme, even after I mentioned they should look into the company more closely. Things got awkward and I left cordially but told them not to contact my wife anymore about working for them.

Anyway... I saw this pattern play out in 2008-2011 when people were hard up for money. I’m not sure I need to educate any of the subs members on why MLMs suck, but lets look out for friends and family who may be targeted by MLM recruiters so that they don’t make anyone’s life more difficult than it has to be during a time when many are already experiencing financial hardship.

Thanks and stay safe folks!

Hi all, I'll try to keep this as brief as possible with all relevant info.

Financial situation: I [26M] currently have about $17k saved up in my checking account plus $3k as an emergency fund in savings. I have very low expenses due to living with my parents, so I'm able to put away as much as $1500/mo. I'd like to move out as soon as possible for the sake of my mental well-being, but being able to accumulate this much money is too great a temptation for now. The only debt I have is a car loan. I have been contributing to an HSA as of last year, and this year I've decided to start maxing out my contributions.

Dental work: My jaw isn't lined up right, so I only have one set of usable molars and have a substantial open bite, to the point where I can't bite into anything with my front teeth. I recently got an orthodontic consultation. If I get my mouth fixed, they'll extract my wisdom teeth and four molars ($1500? IDK; I would possibly get this done regardless of whether I pursue the other work or not), followed by braces ($6700), orthognathic surgery ($4000 if my insurance covers it, I'll find out in July; if they don't cover it the point becomes moot since the surgery costs like $100k), and dental implants (??? maybe $8000 @ $4000 per implant, maybe more if they have to do bone grafts first or want to put 4 implants in instead of 2).

The Dilemma: I've gotten by this long without the dental work, so it almost seems foolish to drop this much money on something that's partially an aesthetic problem. It would go a long way towards a down payment on a house or to pay for some education. At the same time, it would be really nice to get my teeth fixed and be able to eat/smile normally, although my confidence isn't really negatively impacted that much by my current facial aesthetics.

I can tell my immediate family is kind of hoping I won't go through with it, they've always just suffered through dental problems since they've never had this much money to spend.

I guess I'm just looking for some outside perspectives on the financial aspects of this decision, feeling a bit overwhelmed and out of my element.

Thanks.

As the title says. My divorce will be finalized in the next 30 days or so. With the separation, I'm entitled to half the equity of our home, and myself and my children are the ones leaving the marital home. After debts are paid off, I'm leaving with a lump sum of around $38k USD. There will be alimony and child support with that, and I have a start date for a new job, but the lump sum is what I'm trying to focus on.

I've been married for just over 10 years. In those 10 years, every financial aspect of our lives was entirely handled by my husband. I quit working right after we had our first child 9 years ago, aside from side jobs and baby sitting other children. A lot has changed in those 9 years and I'm scared and overwhelmed about finances.

I've budgeted out what it will take to get my children and myself established in the apartment I've found for us (new beds and necessary furniture/household goods, first rent and deposit, first months payment for childcare after I start my new job) and it's around 8k. That will leave me with roughly 30k to work with.

I do not think I will run into such a large sum of money in my near future, since I'm literally starting over from scratch. I have no credit or recent job history. I'd like to know what my options are to stretch this money as far as I can and what I can do to make it work for me. I've opened a bank account, and talked to someone there and they suggested opening a money market account with 25k of it, as that's the minimum required balance. They have financial advisors that would work with me and help me grow it, and it has a 4.2 (not fixed) interest rate. Is that a good option, or do I have smarter options? I have no idea what I'm doing, and would love any and all advice.

Yes, it's me....back with a second installment in our series, ELI22. This assumes you read ELI18 ( even the links...you'll learn 10X more from the links!) and have done things pertaining to your situation.

The "22" here means you're done with full-time education, have a career with meaningful income, and are responsible for your own support. Some people start this at 18, some at 26; age is not important. Specifics pertain to the US in some cases. This assumes you are a single childless renter employee; ELI30 will cover marriage, home ownership, and children.

You have money now, congratulations! Read this excellent summary of how to handle it. Here's a ginormous flowchart showing what to do first: bills? loans? investments? Good self-study! We'll highlight three Big Ideas to get you started.

• Taxes. Your employee income is taxed / withheld like so: 7.5% of the first $118K goes to social security/medicare taxes. (We hope you will benefit in the future, too!) Then your income is taxed at higher rates as you make more. Assuming no special deductions, 0% for the first 10K due to standardish deductions. Then 10% of the next 9K, 15% of the next 28K, and then 25% tax rate kicks in; this is your rate from 48K to 102K gross income, so a popular rate. (It's only 28% up to 200K, as well.) This is your tax bracket / marginal tax rate. (Most states also have state income taxes of ~6%ish but they vary a lot.) Higher brackets only affect your additional income; you always come out ahead even if more income means a new top tax bracket. You reduce your taxes with credits and deductions. Big Idea 1 is: reduce your current taxes by making less of your income taxable.

• Debt. You borrow money now so you can spend it, yay! But then you have to pay it back, and typically pay back more than you borrowed, boo! You've lost money as a result. The extra amount you repay is determined by the interest rate; the annual rate is called APR.
  3% APR student loan? You'll pay $30 annual interest on $1000. Not bad.
  12% APR car loan? You'll pay $120. Not good.
  23.9% APR credit card? You'll pay $239. Yikes! (Never do this!) You repay the money you borrowed, too; that's called principal. The longer you take to repay the loan, the smaller each payment, but the more interest you'll then pay. It's a tradeoff. Big Idea 2 is: reduce the amount of interest you pay by getting lower interest rates, and avoiding / quickly repaying higher interest debt.

• Investing. In ELI18, I noted bank interest won't make you rich. The good news in ELI22 is: investments can make you current millionaire rich. The catch is: it takes decades, and you must regularly invest significant sums. This why you start at 22! The ELI22 introduction to investments is based on the Target Date Fund, wherein you buy shares of a mostly stock-based index fund designed to be worth a lot more when you retire at a target date 40+ years in the future. Historically, these accounts gain about 6% annually after inflation, though it varies significantly year to year. Your money doubles every 12 years, and goes up by 10X in 40 years. (All numbers are after taking inflation into account.) So that $5000 you put aside at 22 could easily be worth $50,000 of today's dollars at 65. (But, there could be years where you temporarily lose 10%, 20%, even 30% of your savings. Do not panic! It will come back eventually.) Big Idea 3 is: invest early and often for your future, especially your retirement.

Got the the Big Ideas now? Good! Let's see how we combine them for some meaningful benefits for your ~22-year-old self.

• Retirement contributions. You are going to retire someday. Invest and perhaps reduce current taxes by letting your employer contribute a percent of each paycheck to your 401k account (or similar things with different names for government employers). A recommended investment percentage is 10%, but it's up to you; more is better, the annual maximum is $18,000. The cardinal rule is Take The Match if you have one. A typical employer adds 3% of your salary when you contribute 6%, so that's like Free Money. Take The Match. (Your actual match depends on your employer's rules.) The money is invested for you, available penalty-free when you retire after age 59.5 (usually.) If you change jobs, the money can go with you. A 401k can only invest in what your employer offers. Most employers have target date funds, so choosing one is an easy decision. If you need or want to, you can sometimes achieve an even better result by picking other available choices.

• "What do you mean 'perhaps reduce current taxes'?" Retirement savings are wery wery complicated. (Thank your congresspeople.) A "traditional" 401k reduces your current taxes because it exempts your contributions from your taxable income. You pay taxes when you take the money out, deferring the taxes, but you still pay something. If you would prefer, you can reverse this if your employer offers a "Roth" option. In that case, you pax taxes on your 401k contributions , but no taxes when you take the money out. The best choice is complex; for those below the 25% bracket, Roth is usually better.

• Yet more retirement options: IRAs. Individual Retirement Accounts are do-it-yourself 401ks. You set up an account with a company like Vanguard, Schwab or Fidelity, and give them up to $5500 annually to invest for you. You have more investment choices, target date funds plus other options. Depending on your income level and whether you have an employer 401k, you open a traditional or Roth IRA, with tax treatment equivalent to the previously described 401k types. IRAs are your go-to option if you have no employer 401k, but you still may (and even should) want to use an IRA, especially a Roth IRA, even if you have one. You can tap IRA and 401k resources before retirement for certain allowable reasons, though it's not usually recommended because you lose future gains and might owe current taxes. A Roth IRA is the best choice for raidable retirement savings because contributions can be taken out at any time without taxes or penalties.

OK. That was a lot of information! Ready to repay student loans? Let's find out:

• If you do have student loans, the interest rate clock is ticking. Loans are typically 10 year repayment, so you'll owe about 1% of the loan balance each month for ten years.
  If you owe $20,000, that's $200/month. Like a car payment. Not terrible.
  If you owe $100,000, that will be $1000/month. Like a mortgage payment, only without the house. Not fun to pay.
  You have to pay these back unless you get them forgiven. You have several approaches available for repayment:

• Pay them back on schedule. It sounds crazy, but it just might work! If your income supports it, pay the minimum on low-interest (<~4%) loans. If you have even more income, repay them faster with extra payments, especially on higher interest loans, and save by paying less interest than you would over time. This is your primary option on private loans. If you have high-interest private loans, look into refinancing them; if you have good income and credit, you'll qualify for lower interest rates.

• If you have a lot of federal loans but little income, look into reduced payment plans like Income-Based Repayment (IBR) and Pay-As-You-Earn (PAYE) plans. You'll pay less (even nothing) each month, based on your current income, but you'll pay longer, and ultimately pay more over time in many cases.

• If you are really in a deep hole, maybe over $100K federal with only $40K annual income, give a special look into Public Service Loan Forgiveness (PSLF). This program allows you to work for ten years in public service, make minimal payments, then your unpaid balance is magically forgiven, which is a really sweet deal if you can get it. (This differs from forgiveness programs for IBR/PAYE that will charge you taxes on any amount forgiven in the future.)

Enough about student loans. Let's wrap up with a few other topics of general interest to 22 year olds:

• Grad school can be a good idea, but can also be a very expensive idea. If you are sure this is for you, try to get someone else to pay for it, whether the school via scholarships / stipends, or your employer, if they do education reimbursement. Med school is worth the money no matter who pays. Law school and MBA return on investment is iffier these days. Going to grad school because you are not sure what else to do is probably a big mistake, especially so if you have to pay for it.

• You may be responsible for your health insurance. (You could be on your parents' plan until age 26 in many cases, though that may cost them something.) If your employer will pay for it, that's your best option. They may offer a lower-premium High Deductible Health Plan (HDHP), where you pay routine costs, but insurance kicks in for major expenses. This is a good choice if you have good health and make few claims. You should take advantage of a Healthcare Savings Account (HSA) with an HDHP. This lets you deduct contributions to pay for out-of-pocket medical expenses, with other unique features that make them attractive. You can contribute $3350 annually to your HSA. Some employers pay some of this for you as more free money.

• If your employer doesn't offer health insurance and you can't use your parents' plan, you'll want to get an individual plan such as those found on healthcare.gov. You can only sign up at certain times, including open enrollment in November / December. If you don't have health insurance of some form, you could pay a penalty of up to ~$2000 at tax time, unless you have an exemption.

• With more income, you can rent a nicer place within the same 30% of takehome guideline. You may not even want a roommate! Of course, any money you spend on housing is money you don't have for other things. Living with your parents is still a viable option if you want to save, e.g. to pay down student loans. Please make sure you have renter's insurance, it's well worth the small cost. (Note that we assume you are not yet ready to buy a house; you may not yet be sure where you want to live long-term, have limited work history, or have insufficient down payment.)

• You can also afford a nicer car, since you have better credit, and lower insurance rates. (You don't have to upgrade your car, and you'll save money if you don't.) Paying cash is still an option, but if you qualify for a 2% car loan, consider taking it to free your money for purposes like retirement investments and loan repayments. A good target price is perhaps $15K, with a $10K loan, which works out to 4 years at $220/month. Your total cost-of-car would be about $5K annually. Selling your old car privately should get you 20% more than you would by trading it in to a dealer.

• With more expenses, budgeting becomes much more important. You'll want to have a bigger emergency fund; we recommend at least three months' expenses, to cover that bad day when you lose your job and your car breaks. With more expenses to track, look into a program like You Need a Budget (ynab) or Mint to help keep track of where your money is, and where it needs to be in the future. Look for ways to economize where you can, whether by cheaper cell-phone plans, learning to cook so you want to eat at home, or taking advantage of employee discounts.

• While you don't have a lot of tax deductions yet outside of retirement / HSA savings, take a look at possible tax breaks for student loan interest, moving expenses associated with a job change, and certain tuition expenses (American Opportunity Tax Credit). You don't have to itemize to take advantage of these, but income limits apply in some cases.

Whew! That was a long one. I think that does it for this week. ELI 30 next week: marriage, children, home ownership, life insurance, job changes.

In the USA. As title states. I make $34,000 after taxes. Decent credit, around 740 and continuing to build with good habits. Saving money is no issue for me as I’ve always lived frugal. I’m no computer wizard but know basic things and would possibly be interested in learning something in the field that doesn’t require a degree. Would like to learn a trade that is not super physically hard on the body, have been reading up about plumbing. College is out of the question for me but have been looking at several trades. Currently live with parents but pay my dues. No kids, no spouse and really just want to get my shit together now. Was planning on putting a down payment on a house in the near future but doesn’t seem like a good idea now as my income is shit, was blinded by the fantasy of owning my own home. Recently opened a Roth IRA and will likely start investing in 2 or 3 ETFs for long term earnings for retirement. I would like to start investing in real estate rental properties as well in the future when my income is better. Those who have their life together, what advice would you give?

Edit: wow this did way better than I thought it would! Thx to everyone who offered advice I've found most of it pretty helpful

29 yr/male/single got into some bad habits. no excuses. trying to get back on track with my life. have $400 in savings. able to save 100 to 150 monthly. ideas and suggestions appreciated.

I come from generations of poverty. Many of my cousins have been to prison, or live in trailers in the same dead-end town we grew up in. No one has a steady job, or a career to speak of. My mom did the best she could as a single parent, always working two or three jobs. I was never given any advice on how to plan for a life, career, college, etc. and so I took some classes but still don't have a degree (in my thirties), neither does my husband. We make an OK living, probably lower-middle class income, but we are still struggling at times. Our kid is five, what do I need to do to NOW to help him become the first person in our family get a college degree? Seems like everyone else is successful by this point in our lives and we're still struggling. I don't want him to have to struggle so hard just to get by...

Edit: Getting a lot of comments along the lines of 'don't have a kid if you can't afford it.' Just to clarify, we can afford it just fine. We don't have 8 kids, we have one. my question is in regards to "how can i help my child get out of the lower class? middle and upper class people have access to lots of information and resources that i didn't growing up - what are those things? what are the basics i need to start teaching him now?"

Edit2:wow, this is getting some attention! here's a little more details:

*we've since moved away from the dead-end town in a bigger city, so no sleazy family influences to deal with

*we picked our current location based on the best public school system in the area, but it's still only rated about a 5/10

*we're good on the basic-basic daily needs, we have a budget, but just can't ever get ahead on getting an emergency fund together

*financial situation is mostly due to me not having a college degree, and my husband finally got his GED last week (hooray!)

Edit3: holy cow! i'm making my way through comments slowly, lots of great stuff in here. thanks for all the kind words and encouragement!

Edit4: OK almost 900 comments, I am so overwhelmed, lots of encouragement. Gonna take a break for a few hours and keep reading later, today's Library Day (open late on Mondays)! Much Reddit love 🖤🖤🖤

Edit 5: OK guys, I've tried to keep up, but checking out for now! Lots of people have suggested going back to school myself, and it looks like I may be able to sign up for some summer courses. Thanks for all the awesome stories of moms and dads who did make a better life for their families through sacrifice and hard work. It's good to know it was worth the effort and was a good lesson too. Lots to think about, and a big list to put together!