From a motivational stand point here are my personal thoughts:
- Always invest enough in your 401k or 403b to get your company’s match. This is leaving money on the table, so it’s important to focus first on your match.
- Next, make sure you have $1000 saved in your emergency account. Click here for $1000 rant.
- Now you need to look at your debt. If you are actively working on paying down debt (more than the minimum payment!) then you can consider a small tweak that might make sense to you.
- Open a Roth IRA and put $20 a month into it. I like Fidelity because I have my credit card rewards go directly into my Fidelity investment account. Mr. Miser prefers Vanguard. Either way, opening the account and trickling a small amount in each month might help you feel better psychologically. The math on this does NOT make sense but if you are super motivated right now it might help you organize your big picture.
Now that your 401k/403b is automated to get your match and you have your Roth IRA set up you can put ALL of your focus on paying down debt. Once you obliterate your debt then you simply increase the contributions every month on your 2 accounts until you hit the MAX every year.
Feel free to debate with your calculators in hand!