I like people to think about life goals versus financial goals. You want your money to help you get what you want out of life, so you have to think through what you want.
I'm also big on financial flexibility. If you put money into an individual retirement account, you can tap it for things other than retirement, like $10,000 toward buying your first home or paying for education expenses.
If your firm offers matching contributions to a 401(k) or 403(b) plan and you qualify to contribute to that plan, then I suggest contributing up to the limit of the company match. That typically has you earning 50 percent on your contribution before you even decide where to invest the contributions.
Put together an emergency fund first and keep that money invested in a liquid investment like a high-yield savings account or a money market account. You'll want to have about three to six months' worth of living expenses set aside in your emergency fund. By establishing this fund you can take a longer-term view toward your other investments because you know you have a financial backstop available to you.
I'd suggest a no-fee Roth IRA for you in starting to invest outside of your company's retirement plan. You should at first concentrate your investments in diversified mutual funds or exchange-traded funds, called ETFs, such as a broad-based no-load stock index mutual fund. Bond funds are a little more perilous for the long-term investor in today's interest rate environment, but you should consider when you may want to invest in these too, along with having some foreign market exposure to international debt and equity markets.
I do think you should start building a credit history and that a credit card is one of the best ways to do it. If you're paying off your balance each month, you're less concerned about the interest rate then you are about whether the card has an annual fee. Cash-back and rewards cards may be of interest to you, but they typically have an annual fee. You have to decide what you want to accomplish by using the credit card. If it's just building a credit history, focus on the no annual fee.
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