19 y/o with little experience. Came into some money and looking for advice.

24yo who's recently found a great job. I'll tell you what I'm doing, and why:

To start, knowing you haven't started college yet (even though your pops is covering the tuition), I'll make this college-realistic (going with 4yrs, even though I was in for 4.5yrs).

  • I've got two retirement funds started, a 401k and Roth 401k (pretty similar to IRA/Roth IRA I think). I dedicate 10% of all my earnings to these two accounts, 5% each. With $50,000, I'd take 10k-20k and drop it straight into a Roth IRA, or a mix of the two. Talk to your bank, learn about basic investing, the rule of 7-2, etc. It really opens your eyes to how your money can function.
  • Your big expenses coming up are going to be: Rent, car, car insurance, food, cell bill, misc needs (toilet paper, paper towels, silverware, cleaning supplies, bath towels, deodorant/shaving supplies, etc). Budget these out on an excel spreadsheet, figure out exactly what your monthly bills are going to be. I generally say around $100/mo on misc expenses because sometimes I like to eat out, or buy a new video game, a case of beer, etc.
  • Don't buy a new car, buy a used car for around $2500 that has been owned by a reputable mechanic, and has the necessities (Preferably under 130,000mi, heat/AC, good tires, running engine, basic car stuff). Since your 50k is a 1time deal and you haven't started college, you shouldn't blow through a chunk of it on a $16,000 vehicle (telling you from experience on this one).

That covers most of the big stuff.

So lets say you drop 10k in retirement, that leaves you with 40k. Dole out ~$500/mo for rent (assuming you have a few roommates, very dependent on location) over four years, and you're looking at $24,000.

Anyhow, you're now left with $16k. Say you buy a $2500 car, and spend $1.5k/yr for insurance, that's another $8.5k gone.

$7500 left, now covering food which at $100/mo comes to $4800. Down to $2700. This doesn't cover $100/mo of misc expenses + cell bill, but that's a basic gist.

My rent in college ranged from $160/mo (around 7 people living on the first floor of a house) to $280/mo (4 people in a different house). I budgeted you at $500 because I went to a hick college town far away from the big city, no idea where you'll end up but you ALWAYS budget things to be more expensive than they probably will be. My car insurance is high because I bought a vehicle too nice for my living, and really struggled to keep it.

I wrote most of this assuming (again, worst case scenario) that you don't manage to pick up a part time job throughout college, beforehand, or during the summer. I highly suggest working, it's extremely underrated.

Stay in school, work hard. I'm money motivated, I decided I wanted to live a better than average lifestyle so I decided on a Supply Chain major. Jobs, jobs everywhere. College is an investment in the lifestyle you want to live, so decide where you want to end up, and make the ends meet.

Sorry this is long, and I apologize if this is inaccurate in any ways or if I left things out, I based it off my experiences thusfar.

Lastly, I'm sorry for your loss. Take care.

/r/personalfinance Thread