Reddit reviews Get a Financial Life: Personal Finance in Your Twenties and Thirties

A checking account is for paying your bills, that is it. You are correct 20K is way too much. IMHO the best place to put it is into a mutual fund of an IRA. Now that you no longer have an active 401K you want to talk to a retirement specialist about setting up such an account. You can roll your old 401K over into it as well.


You don't want your emergency fund in a vanilla savings account either. Put it in a money market account ( not the mutual fund kind ). You will only get a few shekels in interest, but the money will be liquid.

Read a copy of Get A Financial Life. It is written for people who aren't interested in reading about money, but it teaches you the basics of personal finance.

A very good reddit for advice on personal finance:

/r/personalfinance

Since you are going to own a small business you might want to read up on money management for that too.

You really need to read the personal finance wiki.

First, get some tax advantaged savings going. You have a lot of options, but picking any option is better than picking no options. While you are educating yourself, here are some alright choices you can make for this year:

Open a ROTH IRA

1. Go to Vanguard.com and follow the instructions to open an individual ROTH IRA
   
2. Contribute you max for the year (probably $5500 for you)
   
3. Vanguard will ask you to put that money into an account of some kind. That account will hold your money's worth of stocks or bonds. I would get VFINX with is an S&P500 fund. This is a single fund that disperses your risk over the top 500 funds as measured by Standard and Poors. It is a very safe investment with a yield of around %5-%7 over long time horizons.
   
4. Forget about that money until you retire.
   
   Does your company have a 401K? You need to get money into it.
   
   
5. Talk to your employer about increasing your contribution to whatever it will take to reach $18500 by the end of the year
   
6. Make a plan to live on the $24.5K you have remaining in your bank account after the above ROTH IRA contribution
   
   At the end of the year, you will have reduced your pre-tax income by $18500 and you will have $5500 in an account you can withdraw from tax free after you turn 59.5 years old. The ROTH IRA will grow tax free from now until when you retire.
   
   NEXT STEP: GET EDUCATED
   
   
7. Read the entire personal finance wiki. Its pretty good and gets to the point.
   
8. Read Get a financial life. The book is cheap and a nice intro for young people doing personal finance. It isn't comprehensive, and its not the last book you'll read. This book will tell you how to handle debt, save for retirement, buy a car, and it will help you save to buy a house. Once you have read it and have a solid understanding, you should keep seeking out personal finance knowledge.
   
9. If you plan on buying a home, go to a home-buying class. Your city will probably put some on in the local library.
   
10. Keep finding and reading books about personal finance.

Get A Financial LIfe. A personal finance book for people who don't like reading about money and who are just starting out in the world.

In general you should establish an emergency fund before you move onto other financial projects. Ideally, you should be able to live off of your emergency fund for 3 months should you lose your job or otherwise be unable to work.

Get a Financial Life is my favorite personal finance for young adults.

Bogleheads is the place to go for investing. Very beginner friendly. The videos are super cheesy but very accurate and unbiased.

Read this book. It is written for people who do not like reading about finance and it is actually entertaining. It will teach you the basics of personal finance.

It is on the reading list but I highly recommend I Will Teach You To Be Rich.

It is geared for someone in their 20s although it can be applied at any age. It's broken down into six weeks where he goes over your credit and banking accounts and then guides you into starting an investment account and setting up a budget. An updated edition of this book is coming out in May but the advice in the book is still sound and relevant.

Edit: Found one more book on that list that seems perfect. Get a Financial Life: Personal Finance in Your Twenties and Thirties.

I also really liked Suze Orman's The Money Book for the Young, Fabulous & Broke but it came out in 2005 so some of the content is outdated. This is one of the few books I have seen that really targets the issues young people face with money.

Check out Get a Financial Life by Beth Kobliner if you are willing to read a detailed financial schema. Check out the You Need A Budget (YNAB) app for habit building, info, and convenience.

See if there are any community colleges near your offering personal finance courses! And my mom (a former accountant/insurance agency employee) recommends this book which she actually just ordered for me too!