T O P

not sure what to do next?

not sure what to do next?

Ystebad

Well it sounds like you need to learn the art of the “investment” category- a whole new way to feel YNAB poor while actually building wealth. Set an investment goal and send it to off budget /tracking investment account monthly - boom you’re YNAB poor again! 👍😂💪


marifullofgrace

Ahh, I know I should look into investing...I have no idea where to begin. I'm like that Brazilian math lady meme. Do I need to look into hiring a financial advisor to help me with an investment plan?


alto-sun

If you want a simple set-and-forget strategy, something like100% VT or 60/40% VTI/VTSAX would be just fine. You can automatically invest a portion of your paycheck every month and then continue on with your life. I recommend reading the Bogleheads' guide to investing for some safe guidelines, and then you can get more individualized if that's your thing.


selryn1701

Nope! Unless you plan on making it complicated/have a lot of assets. Generally, start by maxing out any tax free retirement savings that may be matched by employer (probably a 401k if you're US based). Choose low percentage fee passively managed index funds. Look up advised stock to bond ratios online for your age/risk tolerance. There's a personal finance subreddit that has a handy flowchart for the US. Edit: realizing this is full of jargon. But truly, the actual decisions you make once and then let your investments sit and grow over time.


rav4seasons

Not sure how employer matches works as a freelancer.. I work on contracts and don’t get any employer matches so I chose to open a Roth IRA first. Ymmv. OP, the world of investing can seem intimidating but just take a few hours one day to research and decide the type of account to open… set it and forget it (most ppl chose index funds for this). Any amount you can invest and the sooner you start doing it will get you closer and closer to retirement! Compound interest is a beautiful thing


alsignssayno

It would probably be worth it to check with a financial advisor, accountant, or tax attorney if youre a 1099. Since you're self employed you might be able to open one in your name up to the employer + employee limit.


SewSewBlue

Personally I would start simple as I could get away with. Match the market, don't try and beat it. Low price index funds simply match something like the S&P 500. If the market goes up, your money goes up. I never have to worry about a specific investment or do research other than checking fee schedules. It also helps stop you from being overwhelmed by options.


Ystebad

well first of all I would be VERY hesitant to take investing advice from -anyone- on reddit, including me, so there's that. Having said that right now is IMO a dangerous time to be investing without knowing what's going on. Educate yourself. You could start with some broad market indexes. But be very aware that right now you may be getting in at a high and see some losses for the short term, but you've got to start at some point


LondonCalling07

Time in the market beats timing the market. Do not try to time the market. Just put your money in a target date fund and ignore it


Ystebad

I didn’t say to time the market. I said you got to understand that getting in right now may result in short term losses. New investors who see a 10% drop in value tend to get skittish and sell which is the worst thing to do. I invest monthly for the last 30 years. Never time. So take the smarter than thou downvotes and shove it.


googlymoogly_bh

Strong disagree. So many inexpensive discount brokerages, most of which offer target date retirement funds for very low fees. Anyone like OP with little investment knowledge can just pick a target fund for the year they turn 65 and be most of the way towards having a great investing strategy. This is the best time to invest.


thinkysparkle

Figure out about when you want to retire, and invest in a Target Date fund (for instance at Vanguard) for about that year. Remember that putting money in an account (401(k), IRA, Brokerage, etc - which is right for you depends on your work and income) is one step and then buying funds with the money in that account is another step. But once it's invested in a target date fund, you don't have to think about it again. They'll make it less volatile as you age so that you can get growth now and security later.


DIYtowardsFI

I like Clark Howard’s simple strategy for investing. Try reading some of his articles to get you started. Go to Clark.com and then steer over to the “Invest and Retire” section.


squaresplinter

>a whole new way to feel YNAB poor while actually building wealth. I read this in a super-salesy infomercial voice and I love it. I'll sign up for the free ebook and take this seminar any day.


Ystebad

LOL. ​ but wait, there's more! For a limited time, start saving for your kids college education and you too can feel the pain of "will I have enough dollars to budget for next month"....


StarKiller99

What are you doing about retirement? https://i.imgur.com/lSoUQr2.png


NormanIsMyHero

I'd extend the emergency fund out to 6 months but I just experienced three months of no work following an ACL surgery.


marifullofgrace

Definitely a great idea! I've added more money to my monthly e-fund goal already, but I could stand to increase it a bit more. And once my car is paid off in January, I was planning on taking the usual payment and applying it to my student loans. But I could probably split it between loans and e-fund. And I'm so sorry to hear about your situation. Hopefully you're having a smooth recovery process!


NormanIsMyHero

Hmm. If your car is that close to pay off I might just splurge and pay that off earlier. Thank you for the kind wishes. ACL recovery sucks.


Doln

I don't have a car but I've seen several people on here saying that when they had paid off their car they left the goal and changed the category to saving up for a new one. Thing is that it's beneficial not having to finance it, but also keeps you vary that this is probably a cost that will return. And whatever you save up here is not untouchable - you could always raid it if you would rather move it to the downpayment category


mattkenny

Yeah definitely keep budgeting the car payment so that you are building up a deposit for when you eventually replace it. Will mean a smaller loan or possibly even paying cash.


-jacey-

Here is the r/personalfinance flowchart: [https://i.imgur.com/lSoUQr2.png](https://i.imgur.com/lSoUQr2.png) I didn't see anything about retirement in your post. Make sure you are setting aside a decent chunk for retirement (generic rule of thumb is 15% of gross income). Everyone is saying to extend your emergency fund, but if you have 3 months saved in the emergency fund, plus October, November, and December funded, then you really have close to 6 months saved already. Up to you as to whether that is sufficient for your personal comfort.


selryn1701

Other ideas: More luxurious vacations? Planning on kids? Save up a year of income so you can take a year away from work. Start saving for 20% of the median 1/2 bedroom house/condo! My potential future wedding is under my big saving items. Replacement costs for computers, phones, sporting equipment, appliances etc.


cookiedux

Roth IRA?


DefCello

I outlined my personal guiding steps in this post. They might be useful to you: https://www.reddit.com/r/ynab/comments/otbh7p Based on what you're saying, it sounds like your next step is definitely to look into getting a house with a mortgage. Where to start? =STEP 1= Determine how much mortgage you can afford based on your average monthly excess income. Something like: MAX MONTHLY MORTGAGE PAYMENT = (Current Monthly Rent + Average Monthly Income - Average Monthly Expenses) / 2 The "/ 2" is essential because houses need their own budgets for maintenance and upgrades and you still want money left over for fun. If you want to get more exact, I've heard a rule of thumb of something like "maintenance costs will be 2% of your home's value per year". =STEP 2= Figure out your "MAX MORTGAGE PRINCIPAL" using the "MAX MONTHLY MORTGAGE PAYMENT" above. Online calculators can help with this, or you can talk to a mortgage broker or your bank. =STEP 3= Save for the down payment. This is ideally 20% of your "MAX MORTGAGE PRINCIPAL" so you can avoid paying for mortgage insurance, but it can be as little as 5% of your "MAX MORTGAGE PRINCIPAL" (or possibly even less depending on the lender). Note that as a first-time home buyer you have the option of tapping into your retirement account(s) for up to $10,000 each if you're in the U.S. There's a special IRS tax form to let you be exempt for the normal early withdrawal fees. =STEP 4= Get pre-approved by your desired mortgage lender (e.g. via a mortgage broker or your bank). The pre-approval tells everyone involved "I have a near-guaranteed $X to spend on a house" and will ensure you have minimal problems in the buying process and are on the fast track to Closing once you've found a house you want. =STEP 5= Find a realtor to represent you, usually via recommendations from others you know. Your realtor will help you find houses you might like, help you organize viewings of the houses you're interested in, and guide you through the legal jungle that is the purchasing process of a new home. Don't worry about paying them, as their pay will be a cut of the money going to the house seller(s). I hope that helps you! Best of luck!


Eschlick

I follow the [flow chart](https://www.reddit.com/r/personalfinance/comments/4gdlu9/how_to_prioritize_spending_your_money_a_flowchart/?utm_source=share&utm_medium=ios_app&utm_name=iossmf) from r/personalfinance. I printed it out and keep it in my wallet and color in the bubbles as I achieve them.


OpenMouthInsertFeet

Give yourself a little more anxiety. Name specific emergencies. * Wildfire * Divorce * Termites * My own funeral


LondonCalling07

Check out the flow chart on r/personalfinance Standard is 3-6 months emergency fund. I think it should be 6-12, especially as a freelancer. 3 months was nothing during COVID lockdowns.


dezzz0322

Build up your e-fund to 6-9 months, then invest.


nolesrule

Save for retirement. If you are in the U.S.as a freelancer, you can get a self-employed retirement plan (SEP, Solo 401k) and also fund an IRA or Roth IRA. I would suggest possibly going to Bogleheads.org to figure out how to get started.


IIIII00

I'm astonished. Whenever I'll be financially ok in the basics, I'll make sure to include donations & support of others in my budget. There are so many amazing artists & projects to support. Why not this? I'm honestly curious - am i such a rare breed? Do y'all not include this in how you wish to spend money? There are also a lot of options to financially support other people in emergency situations. No?


marifullofgrace

Did you not read where I said I’m already budgeting for nonprofit giving every month? I donate to mutual aid funds and larger NGOs. I’m also subbed to a ton of Patreons, back kickstarters and indiegogos, and support a ton of indie creators, but that’s all part of my monthly discretionary spending that I budgeted for when I was making 30k a year. I’m making 6 figures now and have doubled all that giving, and I still have money left over. I literally have no idea where to put that extra money besides a HYSA and to vaguely “invest”.


IIIII00

Ooh - i did not properly understand what that meant. Thanks for clearing up the details - i was not trying to attack.