So clueless!

[Ambitious_Andrea]

Hey Guys,
I was wondering if you guys would mind telling me what I should be doing with my extra money every month! I currently live at home with my mom, I work in a clothing store and hoping to purchase a used car in the near future.

My income after taxes is 1100/month
My monthly bills come up to 220 which is the lowest they could be.

Unfortunatly I owe 3,495 in school loans, but I pay 50 dollars a month which is part of my monthly bills.

And in my TFSA I have 1000 dollars saved.

I have around 850 every month to put somewhere.. where should I be putting it?

Thank you!

[FPipitone]

You are at an excellent age and in an excellent situation to start saving money. You have the means to do so and if I were you, I would be contributing as much as possible into some sort of retirement account. Look into a Roth IRA if your employer doesn't offer any employer contribution plans such as a 401K.

You could easily contribute the max allowable into a Roth IRA. If I were you, I would put the rest of your disposable income into an investment account. Look into a reputable brokerage like Vanguard or Fidelity and keep it simple.

Maybe keep a small percentage in a savings to save up for that car.

[Gina23]

Pay off your student loans... with an extra 850 a month, you could do in very quickly. Or you could save half for a car and half goes to extra principal on the loans. Becoming debt free at an early age should be your goal.

[FPipitone]

Pay off your student loans... with an extra 850 a month, you could do in very quickly. Or you could save half for a car and half goes to extra principal on the loans. Becoming debt free at an early age should be your goal.

You should pay off your student loans as quickly as possible. Throwing $850 per month against the $3,495 in student loans should get that paid off in about 4 months.

Once you have done that, put the $900 ($850 + $50 student loan payment) into a saving account to save for a car. In 8 months, you will have $7,200. You can get a pretty decent car for $7,000.

Once you have done that, then start building an EF. In your case it looks like about $5,000 should be adequate. The begin saving for retirement.

Oops. Missed the student loan debt. Certainly try to pay off any interest accruing debt as soon as possible!

[Goldy]

I would hammer out those student loans in the first 4 months as was already recommended but then I would split the 900/mo between a Roth IRA and a car savings account. It is very important to get the roth going when you are as young as possible so you can maximize the growth when you are older.

[Goldy]

If you put 450/mo away in the roth for one year and you dont retire for another 45 years, assuming a 7% return you will have $113,500 to your name

[Ambitious_Andrea]

Wow thank you for the very quick replies! I know this may sound stupid but I am from Canada and I dont think we have Roth IRAS? The Tax-Free-Savings Account I have is tax free (duh) but it has an interest rate of 1.125?? If that helps.

Second of all, I had a 3000 dollar maxed out credit card since I was 17.. and I realised how stupid that was and recently got a second job and was working 7 days a week to pay it off. I just finished paying it off and finally have some time to myself so I wanted to give myself a little break from paying my student loans off right away. Maybe wait like 2 months before I start working a lot again?

[bjl584]

Hey Guys,
I was wondering if you guys would mind telling me what I should be doing with my extra money every month! I currently live at home with my mom, I work in a clothing store and hoping to purchase a used car in the near future.

My income after taxes is 1100/month
My monthly bills come up to 220 which is the lowest they could be.

Unfortunatly I owe 3,495 in school loans, but I pay 50 dollars a month which is part of my monthly bills.

And in my TFSA I have 1000 dollars saved.

I have around 850 every month to put somewhere.. where should I be putting it?

Thank you!

At $850 extra a month you can pay off your SL's in short order. I'd at least bump up the payment to say $300. With the rest, start saving for a car. Ideally, pay cash for the car, but if you have to finance, then follow the rule of thumb that's been stated on the forum before. Which is, finance for no more than 36 months and have the montly payment represent no more than 10% of your monthly take home.