How to get started with savings, paying off debt, and retirement?
"The word you are looking for is ""budget"" You can't pay off debt if you are spending more than you earn.  Therefore, start a budget that you both work on at the same time, and both agree 100% with.  Evaluate your progress on that budget on a regular basis. From your question, you understand what your obligations are and you seem to manage money pretty well. Therefore your key to retirement is just the ticket you need. As newlyweds, you both have to be VERY aware that the main reason a marriage fails in the US is money issues.  Starting out with a groundwork where you both agree to your budget and can keep it will help you a lot in your upcoming life. Then, for some details Sprinkle your charitable donations anywhere in the list where you feel it is important." You have a small emergency fund.  Good! Be open about your finances with each other.  No secrets, except around gift-giving holidays. Pay off the debts ASAP.  Don't accumulate more consumer debt after it's paid off. I wouldn't contribute anything more to the 401k beyond what gives you a maximum match.  Free money is free money, but there are lots of strings attached to tax-advantaged accounts. Be sure you understand what you're investing in.  If your only option is an annuity for the 401k, learn what that is. Retire into something.  Don't just retire from something.  (Put another way: Don't retire.)  Don't wait until you're old to figure out what you want to retire into. Save like crazy before you have kids.  It's much harder afterwards. I agree with the other answers here.  You need to pay off your debts first, so that you can take the money you would have been spending on debt payments and make retirement contributions instead.  The longer they hang around, the more you pay in interest and the more they are a risk to you.  Imagine if you or your spouse were laid off, which is better scenario: having to pay for your necessities plus debts or your necessities alone?  Just focus on one goal at a time, and you will do well. And the best way for you and your new spouse is to have the same financial goals and a huge part of that agreeing on a budget each month and being flexible.  Don't use it to control your spouse, you each have a vote.  I have not used Vangaurd, but have heard good things about them.  I would do some research before investing with them or anyone else for that matter. What you want to find when it comes to investing is someone with the heart of a teacher, not a product peddler.  If you have someone who is pushing financial products, without explaining (A) how they work, and (B) how they fit your situation, then RUN AWAY and find someone else who will do those two things. Communicate. I would recommend taking a course together on effective communications, and I would also suggest taking a course on budgeting and family financial planning. You need to be able to effectively communicate your financial plans and goals, your financial actions, and learn to both be honest and open with your partner.  You also need to be certain that you come to an agreement. The first step is to draft a budget that you both agree to follow.  The following is a rough outline that you could use to begin.  There are online budgeting tools, and a spreadsheet where you can track planned versus actuals may better inform your decisions. Depending upon your agreed priorities, you may adjust the following percentages, Essentials (<50% of net income) Financial (>20%) Lifestyle (<30%) - this is your discretionary income, where you spend on the things you want Certain expense categories are large and deserve special advice. Try to limit your housing costs to 25% of your income, unless you live in a high-cost/rent area (where you might budget as high as 35%). Limit your expenses for vehicles below 10% of income. And expensive vehicle might be budgeted (partly) from Lifestyle. Limiting your auto payment to 5% of your income may be a wise choice (when possible). Some families spend $200-300/month on cable TV, and $200-300/month on cellphones. These are Lifestyle decisions, and those on constrained budgets might examine the value from those expenses against the benefit. Dining out can be a budget buster, and those on constrained budgets might consider paying less for convenience, and preparing more meals at home. An average family might spend 8-10% of their income on food. Once you have a budget, you want to handle the following steps, Many of the steps are choices based upon your specific priorities.
You should invest in that with the best possible outcome.  Right now that is in yourself.  Your greatest wealth building tool, at this point, is your future income.  As such anything you can do to increase your earnings potential.  For some that might mean getting an engineering degree, for others it might mean starting a small business.  For some it is both obtaining a college degree and learning about business. A secondary thing to learn about would be personal finance. I would hold off on stocks, at this time, until you get your first real job and you have an emergency fund in place. Penny stocks are worthless, forget about them. Bonds have their place, but not at this point in your life.   Saving up for college and obtaining a quality education, debt free, should be your top priority. Saving up for emergencies is a secondary priority, but only after you have more than enough money to fund your college education. You can start thinking about retirement, but you need a career to help fund your savings plan.  Put that off until you have such a career. Investing in stocks, at this juncture, is a bit foolish.  Start a career first.  Any job you take now should be seen as a step towards a larger goal and should not define who you are. The answer depends entirely on your mortgage terms - is the interest rate low, how many years left? Questions like this are about Cost of Capital. If your mortgage has a low interest for a lot of years, you have a low cost of capital.  By paying it off early, you are dumping that low cost of capital. Use the extra money to start a business, invest in something or even buy another property (rental).  Whenever you have a low cost of capital, don't rush to get rid of it. Of course, if there are no other investment/business opportunities available and the extra money is going into a low return savings account, you might as well pay down your debt.  Or if you lack the self discipline to use the extra money properly - buying flat screens and meals out - then yeah just pay down your debt. But if you're disciplined with the extra money, use it to get access to more capital and make that new capital work for you. "I'm probably going to get a bunch of downvotes for this, but here's my not-very-popular point of view: I think many times we tend to shoot ourselves in the foot by trying to get too clever with our money. In all our cleverness, we forget a few basic rules about how money works: It's better to have 0 debt and a small amount of savings than lots of debt and lots of savings. Debt will bite you. Many times even the ""good"" mortgage debt will bite you. I have several friends who have gotten mortgages only to find out they had to move long before they were able to pay it off. And they weren't able to sell their homes or they sold at a loss. When you have debt, you are restricted. Someone else is always holding something over your head. You're bound to it. Pay it off ASAP (within reason) while putting a decent amount into a high-yield savings account. Only after the debt is gone, go and be clever with your money." "First to actually answer the question ""how long at these rates/payments?""-  These is nothing magic or nefarious about what the bank is doing. They add accrued interest and take your payment off the new total.  I'd make higher payments to the 8.75% debt until it's gone, $100/mo extra and be done. The first debt, if you bump it to $50 will be paid in 147 months, at $75/mo, 92 months. Everything you pay above the minimum goes right to the principal balance and gets you closer to paying it off.  The debt snowball is not the ideal way to pay off your debt. Say I have one 24% credit card the bank was nice enough to give me a $20,000 line of credit on. I also have 20 cards each with $1000 in credit, all at 6%. The snowball dictates that the smallest debt be paid first, so while I pay the minimum on the 24% card, the 6% cards get paid off one by one, but I'm supposed to feel good about the process, as I reduce the number of cards every few months.  The correct way to line up debt is to pay off the (tax adjusted) highest rate first, as an extra $100 to the 24% card saves you $2/mo vs 50 cents/mo for the 6% cards. I wrote an article discussing the Debt Snowball which links to a calculator where you can see the difference in methods. I note that if the difference from lowest to highest rate is small, the Snowball method will only cost you a small amount more. If, by coincidence, the balances are close, the difference will also be small.  The above aside, it's the rest of your situation that will tell you the right path for you. For example, a matched 401(k) deposit should take priority over most debt repayment. The $11,000 might be better conserved for a house downpayment as that $66/mo is student loan and won't count as the housing debt, rather ""other debt"" and part of the higher ratio when qualifying for the mortgage. If you already have taken this into account, by all means, pay off the 8.75% debt asap, then start paying off the 3% faster. Keep in mind, this is likely the lowest rate debt one can have and once paid off, you can't withdraw it again. So it's important to consider the big picture first.  (Are you depositing to a retirement account? Is it a 401(k) and are you getting any matching from the company?)" I'd suggest you start with a budget that includes savings, the minimum payment for those loans, estimates for recurring expenses, entertainment, and lifestyle items. That will let you baseline how much money you need for the lifestyle you want to have. Then apply your income to that model and whatever is left distribute out to your loans starting with the highest risk (not forgivable in bankruptcy/would make you homeless if you don't pay) and highest interest rate. Firstly, make sure annual income exceeds annual expenses. The difference is what you have available for saving.  Secondly, you should have tiers of savings. From most to least liquid (and least to most rewarding): The core of personal finance is managing the flow of money between these tiers to balance maximizing return on savings with budget constraints. For example, insurance effectively allows society to move money from savings to stocks and bonds. And a savings account lets the bank loan out a bit of your money to people buying assets like homes.  Note that the above set of accounts is just a template from which you should customize. You might want to add in an FSA or HSA, extra loan payments, or taxable brokerage accounts, depending on your cash flow, debt, and tax situation. "Congratulations!  It sounds like you're off to a good start.  Establishing credit history and starting a Roth IRA now and getting some investment in at this point is likely to save you a great deal later on.  A good way to diversify investments in a Roth IRA is to use ETFs, especially index funds, which bundle a whole bunch of diverse investments together into one symbol that you can get into with a single transaction fee (""commission"").  As a small piece of advice, if there's inaccurate information on that credit card (e.g. balances due and payments made) showing up on your credit report, don't ask the credit bureaus to correct that data as long as the rest of the information shows generally good standing - they'll just remove the whole thing.   If you have the discipline to pay off your credit card balance in full every month, and view credit card purchases as electronically spending cash, you could consider applying for a credit card of your own to help build that credit history further.   Also, welcome to this site; feel free to check it out as you learn more. Planet Money might also have some interesting ways to learn about these topics.  Finally, don't forget to regularly let your parents know how much you appreciate all they're doing for you. :-)" "The suggestions towards retirement and emergency savings outlined by the other posters are absolute must-dos.  The donations towards charitable causes are also extremely valuable considerations. If you are concerned about your savings, consider making some goals.  If you plan on staying in an area long term (at least five years), consider beginning to save for a down payment to own a home.  A rent-versus-buy calculator can help you figure out how long you'd need to stay in an area to make owning a home cost effective, but five years is usually a minimum to cover closing costs and such compared to rending. Other goals that might be worthwhile are a fully funded new car fund for when you need new wheels, the ability to take a longer or nicer vacation, a future wedding if you'd like to get married some day, and so on.  Think of your savings not as a slush fund of money sitting around doing nothing, but as the seed of something worthwhile. Yes, you will only be young once.  However being young does not mean you have to be Carrie from Sex in the City buying extremely expensive designer shoes or live like a rapper on Cribs.  Dave Ramsey is attributed as saying something like, ""Live like no one else so that you can live like no one else.""  Many people in their 30s and 40s are struggling under mortgages, perhaps long-left-over student loan debt, credit card debt, auto loans, and not enough retirement savings because they had ""fun"" while they were young.  Do you have any remaining debt?  Pay it off early instead of saving so much. Perhaps you'll find that you prefer to hit that age with a fully paid off home and car, savings for your future goals (kids' college tuitions, early retirement, etc.).  Maybe you want to be able to afford some land or a place in a very high cost of living city. In other words - now is the time to set your dreams and allocate your spare cash towards them.  Life's only going to get more expensive if you choose to have a family, so save what you can as early as possible."