So recently I came into a very slight inheritance (nothing that lets me not work or anything) but a nice change from my previous level of "I would need a payment plan to buy anything more than $1000" as my access to liquid cash is quite small. In general I've saved 20% of my take home pay, maxing out a Roth IRA each month and saving the remaining in my checking account, and keeping a general budget/tracking everything. In the past, when I first moved out of my parent's house and was living alone, I had figured out I basically couldn't buy anything that wasn't an absolute essential if I didn't want to be reaching into my alloted savings and that led to an eventual "I have $30 in cash in my account until next pay period" kind of shit. I have always been sure to fully pay credit cards/treat them more as debit and had a great credit score, and even now am in the 800s so I figured having almost non existent liquid cash available was more the norm in today's society.
Anyways, I've honestly only kept this inheritance in my checkings account in a virtual money under the mattress kinda thing, as I just have a natural aversion/ick towards the stock market and every other aspect of finance in capitalism, and have ignored my bank wanting to schedule financial advisor meetings and such. But I do recognize the kinda tightrope walking necessity of living in a capitalist society, and without things like investments you are 100% doomed to work til you die (which may be the case regardless of financial decisions but work with me here).
So I ask, is there any kind of hexbear/marxist approved financial strategies out there? Like I should take x% and put it in y kind of thing? Or is the money under the mattress equivalent the way to go? Again, I'm avoiding just googling "how to divide your money" kinda stuff because it's coming from total capitalism is eternal kind of places.
Thanks!
Oh, another note: you aren't avoiding the stock market even now. A Roth IRA is just a collection of investments, just ones that someone else is managing for you (usually). Whether or not this changes anything about what else to put money into, idk.
Personally I am not tight with money. I contribute whatever my employer will match to an IRA (definitely not 20% of my take home), sock a designated amount into savings from each paycheck, and then allow myself to spend more or less freely otherwise. I still don't spend a lot on random goo-gahs because they don't really interest me and I have enough clutter, but I am somewhat quick to spend on a nice meal, or on helping my friends, mutual aid, hobbies, etc.
I may be less well off later in life this way, idk, but my philosophy is I'm not going to live like a puritan in the prime of my life just so I can maybe have more money later. I'll sock money away for sure, but not so much so that I'm living poorly. If a real catastrophe hits (major medical problems, etc) it'll probably wipe me out regardless, so I am just trying to live a good life
If capitalism isn't eternal, your money will be worthless anyway. Save it under the assumption that it lasts forever.
As a young person, you should have most of your savings in stocks, since the average growth is higher over a long period. Something like an sp500 index fund would be best
There have been other posts like this, I don't recall any consensus on what to do with it (though during the high inflation period there was some interest in buying treasury bonds)
I am also getting something like this, and for now I just opened a high interest rate savings account (money market I think they call it) with my credit union, so at least I might keep up with inflation, and to keep it separate from my day-to-day spending money. but I haven't decided what to do long term. If my personal saving and the interest can compound into enough money for a house or condo downpayment maybe I'll do that, but I'm not there yet
If there's any chance of using that money in the next 2-3 years for a down payment or something, stick it in a high interest savings account. [Here is a list to pick from] (https://www.nerdwallet.com/best/banking/savings-accounts). If it's under $50k I would just go with that and not make it complicated. If you wanted to buy a CD you could get a lower, but guaranteed interest rate for 1-5 years, but that would depend on what you think is going to happen with interest rates in the future.
High interest money market account is probably the right play here.
Buy a house you can comfortably afford. Pay off all debts. Put rest in Vanguard VTSAX account
Down payment? I don't have the scoop on interest rate trends, so maybe you'd want to wait. There's a bi(tri?)section of what are the interest rate trends, what are the housing price trends in your area, how much of a down payment can you afford, how much of a mortgage payment you can afford.
The higher your down-payment, the less the interest rates matter. Not like 15% or 20%, but like 40%+ of the sale price. They still matter ofc, but there's always the chance of refinancing, which is easier when you have a lower debt/equity ratio.
If there's someone in your life you trust, you could also consider buying a house together. Some states have different laws on that.
Otherwise a HYSA or CD like the others have said. You're already saving 20% of your take home, that's a pretty good chunk.
To go a different direction, maybe take the opportunity to spend some of the money on yourself.
Is there a skill you've wanted to learn? Can you go get lessons? Is there an activity you wanted to try but didn't have the budget? Like martial arts, dance classes, rock climbing.
Maybe music lessons or whatever other art?
You can also take a look over on your budget. Is there anything there that would be cheaper if you put up more money upfront?
Are there any monthly payments you won't give up that you can save by paying annually instead? I know I get a better rate on my car insurance if I pay twice a year vs monthly. Maybe go get your car serviced if you haven't in awhile.
Are you renting the router/modem?
If you're still reading by now, I thought it over again. You should figure out how to buy a house or a condo. Even if that means not putting anything to your IRA. Look into fhas.
Nothing will make you work til you die than paying rent your entire life. Feel free to DM if you have any specific Qs or want help with math/numbers.
