Advice welcome! I need help!!

[Mr. Motivated]

I am 21, I don't make a whole lot of money. I have general expenses, 60/week gas, house payment $200/mth, $50/random fees, and $550/car and insurance. Rough figures of course. I make roughly 400 a week. What should I do with my money??? I have school loans that I'm sure I could start paying off, I could pay ahead on my car, I could pay ahead on my house. But it seems, to me, that I make such an insignificant amount that I might as well just make the normal payments on it and put my money into some start of a savings account. I opened a ROTH IRA investing in mutual funds through a financial advisor and EdwardJones in the area. I try to put back around 10% of what I make into a savings account. Just looking for some beneficial advice being as I am very new to this topic and not very educated on it. I would like to plan on a early retirement and not having to worry about money.

Also the house I invested in has the potential to almost double in value, depending on the housing market at the time.

I have about 2,000 in my savings account and nothing in my IRA yet because I just started it two days ago! I am concerned with keeping an emergency fund but I also would like to get started with my IRA because my money is making fractions of a cent in my savings account. I am literally clueless about what I should do

Any and all advise would be extremely helpful! Thanks in advance!

[bjl584]

The first thing that I would do is look into selling the car. It represents 34% of your income. WAY too much. It shouldn't cost you over 10% of your monthly income. What kind of car is it? How much do you owe? How much longer till it is paid off?

[Petunia 100]

What about groceries? Utilities?

Agree that your car expenses are much too high for your income.

Why don't you start by tracking where your money is going? That will give a better picture than just estimating.

I'm glad to hear you haven't actually funded that Edward Jones account yet. I suggest you don't. Instead, choose a low-cost custodian. Vanguard, Fidelity, or T. Rowe Price. Your money will grow far better when you aren't constantly being dinged by sales loads, custodial fees, and high expense ratios.

[ar_campbell]

I think we might need more information here but right off the bat, I'm on the ditch the car bandwagon. That's way too much of your income. How upside-down are you in your auto loan? If you're not- then get out now! I would also advise continuing to build your savings. $2,000 will only get you about 2-2.5 months if you lost your job. Try to build up a couple thousand more to get that number up to 6 months.

Once savings are built, I would take advantage of the tax status to invest in a no load, low fee mutual fund. Even if turnover in the fund is high (as opposed to an index ETF) it's a tax sheltered account and that wont hurt you. Leave the ETFs for your taxable account down the road.

Given that you don't have a ton of disposable income you can dollar cost average with any decent brokerage. Have a couple hundred a month direct deposited to purchase additional shares. As long as you're buying in to a fund that doesn't charge a sales fee through your brokerage this could be a great strategy that will also protect you from market fluctuations in the long run. With current contribution limits you can put in about $415 each month during the calendar year.

[Mr. Motivated]

I still owe quite a bit on the car, over 17k. Its a 2006 300c. Last time I looked into getting rid of it it was impossible without going completely upside down so I figured I might as well keep it and have a reliable car for now until I can trade it in for something cheaper and better on gas. (Young and dumb decision to get the car in the first place)

I don't know anything about what kind of accounts to put my money into thats why I went to EdwardJones. The only thing I have ever had is a savings account and checking account. I know very little about other accounts to the extent of what a ROTH IRA/IRA is and a tid-bit about mutual funds and stocks. Other than that I don't know a thing about what to do with my money.

I am working on saving around 6 months in an emergency fund but once I get that then what should I start doing with extra income that I want to put away. I would prefer an account where I can predict interest rates and outcomes fairly close, none of the "you could go -4% or up to 22% on this" stuff. Thats why I figured EdwardJones would be a good place to go because I basically need someone to tell me what to do with my money or it will just sit in my savings account making fractions of a cent every year.

Thanks alot guys, sorry for the in-experience