Dear Dr. Don,
I am 18 and will be 19 in June. I have been working at my full-time job making about $40,000 a year for about four months. I have a $12,500 loan for my car. The payments are $380 a month and I contribute an extra $120 a month to that.

What should I be doing with the rest of my money? I am thinking of buying a house next year, so my plan was to save the rest for a down payment. But I have also considered mutual funds and I can also contribute to a 403(b) through my work. What do you think?
— Tyler Trepidation

Dear Tyler,
Company matches isn’t as prevalent in 403(b) plans as they are in 401(k) plans. But if your employer offers such a match, a 403(b) would be a good place to start investing for your future. If there’s no matching program, consider putting funds in a Roth IRA as an alternative.

The first-time homebuyer provision for a Roth IRA account can give you a degree of financial flexibility. You’re saving for retirement, but you can tap the account without penalty for up to $10,000 to buy that first home. IRS Publication 590, Individual Retirement Arrangements, has more about this provision.

Saving for a down payment is a great goal regardless of whether you buy a house next year. I’m quite sure that I wasn’t ready to be a homeowner at age 19, but that doesn’t mean it’s not right for you. Finding financing may be a bit of a problem. Work on building your credit history along with accumulating a down payment. The Bankrate feature,Credit scores made simple” will help explain that process.

Plot out how that extra $120 a month reduces the term of your auto loan. Bankrate’s “Monthly auto loan payment calculator” lets you input the loan balance and interest rate. Input that you’re making an extra $120 monthly payment and the amortization schedule will show you the revised payoff date.

Money you put toward retirement in your teens and 20s has 40 years to grow. Many people just starting out in the work force don’t make retirement savings a priority. But contributing to such a plan early in your career can make it much easier to achieve your financial goals.

To ask a question of Dr. Don, go to the “Ask the Experts” page, and select one of these topics: “Financing a home,” “Saving & investing” or “money.”