Here are some cliff notes about me:
- 30 years old immigrant (came to the US late 2009), so no established credit (got a $900 credit card with my bank finally last year)
- No spouse, no children. Just me, myself and I.
- I opened a 401k in January 2014 (yeah, I kinda wasted 4 years. I was scared since it's not FDIC insured and I came in the middle of the big crash)
- 12% of my salary goes into that 401k, split 6% into Roth and Employee 401k
- I'm not sure what the balance should be. On one hand, I believe that taxes will always be higher later on (so Roth is what I want since I pay the taxes on it now?), on the other hand, I do not know if there is a drought coming (so the deferred taxes of the Employee 401k might come in handy later)
- Of the remaining salary (the money that actually hits my pay check), about 42% go out for my rent - yeah, I live in a really expensive area :(
- The other running costs (Utilities, Groceries etc.) make up another ~10-15%
- I have no debt whatsoever, not even an ongoing car payment (in fact, I don't even own or need a car)
- Since my tax situation is very simple, Income tax isn't a huge factor as well, my yearly tax return is more or less a zero sum game
So I have about 40% of my monthly salary that is simply there, usually I waste it on nonsense and now I actually want to do something better with it - but I'm not sure what.
Basically, what is the best use of "spare" money to build up a bigger pool of money that I can use later, be it through actual savings or through a credit score that allows me to make big purchases, for example a home but without putting in to much risk (so no "get rich quick" schemes or stock picking)
- Max out my 401k - from what I understand, I can put 17500$ aside each year, and that money includes my employers part
- Open a savings account with a bank that doesn't have completely abysmal savings rates (e.g., Ally)
- Get a second credit card from an issuer that's not my bank (I have a Visa card - does it make sense to get a Master Card or Amex?)
- Something obvious that I'm missing? (Lowering rent costs isn't really an option sadly)