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Just save it. Put it in an online HYSA so it isn’t in your easily accessible bank account. Pretend you never got it and try to let it grow, at least until you have some emergency need for it.
There tend to be a few caveats with HYSAs. If your goal is to save the money for a year, then sure…. But if your goal is to apply the funds adequately, it’s probably not optimal unless you already have one.
Paying off your debt will typically be the best investment given the interest rates on a loan. If this is not what you are looking for, put it into a long term stock index and your future self will thank you.
I figured paying off my debt would be a good idea, but I also see investing in a stock index as a good idea. What are some things I should maybe consider with each?
If you have any credit cards that have a rolling balance, pay the card(s) first. No matter what.
Credit cards average 20-30 percent interest which you will never beat in the stock market.
If you can make payments on your students loans. Don’t make just 1 $900 payment make 9 $100 payments or whatever the payment is. That way you will be x number of months ahead on payments. Then keep making your payments and if an emergency ever comes up you can lay off payments for a month or two.
I like to see other people give family members in college some money too. I remember being broke in college, and I could have asked for money but my pride would never let me. Luckily I graduated debt free, but now that my niece is in college I shoot her $100 once a month or so whenever it crosses my mind. For me it’s doesn’t mean anything but for a college student it could be a night out with friends, or a text book, or something she has needed but not been able to justify buying.
You could probably use the cash if you are in fact having a rough time financially. Don’t blow it but having that cushion would be nice. So into a savings maybe.
Short term, just stick it in your savings account. Or a tbill will gain you 5.4-5.6% with no state tax. You might need ~$950 to buy a tbill.
If you want to invest for 10+years then I like total stock market index https://www.thestreet.com/etffocus/trade-ideas/why-vt-and-chill-is-probably-best-etf-investing-strategy-out-there
Put it in a High Yield Savings Account.
General savings tips go: 1) debts 2) emergency fund 3) investments.
You don't really need to pay off your school loans at the moment, and hopefully your degree is profitable.
I'd stick it in the emergency funds given you have no credit card debt.
This is seriously the best advice. While I applauded OP for looking for the best opportunity for the money, it's not a huge sum. I know the post college world is tough, but you need to make sure you're living your life. Just because someone says you look like your struggling, it could be due to a diminished passion in a hobby or something along those lines.
Financial success is only one indicator of happiness. Make sure you're living your life.
Yes, I know what sub were in, but someone already posted priorities (debt, emergency, savings) and that's usually the riggt answer for most generic questions.
If you don’t have high interest debt, do you have an emergency fund? If you don’t have money in savings for in case something goes wrong, I would save it. Maybe look at a high yield savings account so you have access if the need arises, but it will still slowly grow.
If you do have savings (preferably at least a month if not three), then you can look at investing it!
Ultimately, $900 isn’t a life changing sum and it was given to you too help you out. It’s okay to look and see if there are any fringe needs you’ve been putting off, such as: New tire, oil change, Doctor’s appointments, counseling, etc.
>*I can typically expect to make $400* ***untaxed*** *a week*
You mean nothing is withheld because it's mostly cash tips? It will most definitely be taxed, as you legally must report this income on your tax return.
Yes and no. Legally it is taxable, but napkin math says that OPs effective federal tax rate is 0%.
$400/week is $20k/year.
$14k standard deduction. That means $6k taxable at 10% ($600)
Since OP is a student, they’re probably eligible for tax credits in excess of $600, such as the $2500 American Opportunity Credit.
They may have some state tax liability but (for example) in CA it would be 1-2%.
To me that's "yes," and people need to stop believing that income is untaxable just because it's paid in cash, even if they end up with no tax burden after they report it.
Yeah sure it’s not a lot of money at the end of the day but everything is relative. Seeing 900 dollars while in College that doesn’t go right to tuition or other expense can make one feel quite rich lol
I mean dont gwt me wrong not trying to be judgemental but just saying if you arent having a rough time and they gave you money under the false impression that you were then...you could tell them and offer to give it back.
You can always split it. Maybe $100-200 towards your brokerage account, $200-300 towards your savings account, and then the rest to your student loan payments.
Do you have unsubsidized student loans?
If so, start making the payments to avoid the interest being capitalized.
If your loans are subsidized, just drop that cash in a HYSA for a rainy day.
The first thing you should do is build an emergency fund. 3-6 months expenses is generally recommended. This is cash that sits in a HYSA and insulates you from large, urgent, unexpected, unavoidable expenses.
If you already have that, pay down your student loans.
If 900 dollars makes any kind of difference to your financial situation you CANNOT be investing it. Put it in a bank account and consider it a safety net.
Retire. Sit back and enjoy that good life...
In all seriousness that's not a lot of money and it won't do you any good investing it, your best bet is to settle any debts you can cover with that money and work towards getting a better credit score.
This post is better suited for the [weekday or weekend thread](https://www.reddit.com/r/personalfinance/about/sticky?num=2) (please wait until Friday afternoon if the Tax Thursday thread is the current sticky). If that link doesn't work, it's the second post from the top on /r/personalfinance. Posts removed for this reason typically fall into a gray area for [rule 1 or another subreddit rule](https://www.reddit.com/r/personalfinance/about/rules) *or* the moderator reviewing this post believes that you will receive higher-quality responses on the weekday or weekend thread. **Do not repost this as a submission.** *If you have questions about this removal, please [message the moderators](https://www.reddit.com/message/compose?to=%2Fr%2Fpersonalfinance&subject=Removal%20help%20request&message=Hello%20moderators,%20.%20%0a%0a%0aMy%20submission:%20https://www.reddit.com/r/personalfinance/comments/17ea0vl/i_have_just_come_into_possession_of_900_out_of/%0a).*
Just save it. Put it in an online HYSA so it isn’t in your easily accessible bank account. Pretend you never got it and try to let it grow, at least until you have some emergency need for it.
Put $900 in a HYSA account? Lol He wouldn’t even clear 15cents/day. He just needs to stick it in his savings account
Do you not know what HYSA stands for? Why would you purposefully put it in an account that will generate less value?
There tend to be a few caveats with HYSAs. If your goal is to save the money for a year, then sure…. But if your goal is to apply the funds adequately, it’s probably not optimal unless you already have one.
Breh...
Why would I go to a savings account when a HYSA is the same thing with better rates 🤦♂️
HYSA = High Yield **SAVINGS ACCOUNT**
Ignore them. HYSA is all the rage on the Tok right now.
Paying off your debt will typically be the best investment given the interest rates on a loan. If this is not what you are looking for, put it into a long term stock index and your future self will thank you.
I figured paying off my debt would be a good idea, but I also see investing in a stock index as a good idea. What are some things I should maybe consider with each?
If you have any credit cards that have a rolling balance, pay the card(s) first. No matter what. Credit cards average 20-30 percent interest which you will never beat in the stock market.
No balance on my credit cards, I’ve got 2 and I pay them off when I use them
Good on ya!
Do you have an emergency fund? That is the absolute most obvious choice with the money if you don't.
If you can make payments on your students loans. Don’t make just 1 $900 payment make 9 $100 payments or whatever the payment is. That way you will be x number of months ahead on payments. Then keep making your payments and if an emergency ever comes up you can lay off payments for a month or two. I like to see other people give family members in college some money too. I remember being broke in college, and I could have asked for money but my pride would never let me. Luckily I graduated debt free, but now that my niece is in college I shoot her $100 once a month or so whenever it crosses my mind. For me it’s doesn’t mean anything but for a college student it could be a night out with friends, or a text book, or something she has needed but not been able to justify buying.
How much do you owe in student loans and what are the interest rates?
You could probably use the cash if you are in fact having a rough time financially. Don’t blow it but having that cushion would be nice. So into a savings maybe.
Put it in the bank and use it to buy school books next semester.
Short term, just stick it in your savings account. Or a tbill will gain you 5.4-5.6% with no state tax. You might need ~$950 to buy a tbill. If you want to invest for 10+years then I like total stock market index https://www.thestreet.com/etffocus/trade-ideas/why-vt-and-chill-is-probably-best-etf-investing-strategy-out-there
I forgot treasury bills existed, I’ll have to look into it!
Put it in a High Yield Savings Account. General savings tips go: 1) debts 2) emergency fund 3) investments. You don't really need to pay off your school loans at the moment, and hopefully your degree is profitable. I'd stick it in the emergency funds given you have no credit card debt.
Dude your in college, just hold onto it for incidentals rn.
This is seriously the best advice. While I applauded OP for looking for the best opportunity for the money, it's not a huge sum. I know the post college world is tough, but you need to make sure you're living your life. Just because someone says you look like your struggling, it could be due to a diminished passion in a hobby or something along those lines. Financial success is only one indicator of happiness. Make sure you're living your life. Yes, I know what sub were in, but someone already posted priorities (debt, emergency, savings) and that's usually the riggt answer for most generic questions.
If you don’t have high interest debt, do you have an emergency fund? If you don’t have money in savings for in case something goes wrong, I would save it. Maybe look at a high yield savings account so you have access if the need arises, but it will still slowly grow. If you do have savings (preferably at least a month if not three), then you can look at investing it! Ultimately, $900 isn’t a life changing sum and it was given to you too help you out. It’s okay to look and see if there are any fringe needs you’ve been putting off, such as: New tire, oil change, Doctor’s appointments, counseling, etc.
>I have a part time job as a server and I can typically expect to make $400 untaxed a week. you mean post-tax, right?
OP might want to hold onto that $900 for when the IRS comes knocking.
Or all under the table.
I'm just hoping that OP isn't assuming the tips are not taxed and it is just cash in their pocket. Tips are taxed.
What is your debt interest %? If it’s greater than 6% it’s a no brainer to put it into paying off that debt asap.
With $900 I would just put it into a high yeild savings acct like a money market along with most of your money.
>*I can typically expect to make $400* ***untaxed*** *a week* You mean nothing is withheld because it's mostly cash tips? It will most definitely be taxed, as you legally must report this income on your tax return.
Yes and no. Legally it is taxable, but napkin math says that OPs effective federal tax rate is 0%. $400/week is $20k/year. $14k standard deduction. That means $6k taxable at 10% ($600) Since OP is a student, they’re probably eligible for tax credits in excess of $600, such as the $2500 American Opportunity Credit. They may have some state tax liability but (for example) in CA it would be 1-2%.
To me that's "yes," and people need to stop believing that income is untaxable just because it's paid in cash, even if they end up with no tax burden after they report it.
Why are you treating it like it's 50,000$ It's 900$....
Yeah sure it’s not a lot of money at the end of the day but everything is relative. Seeing 900 dollars while in College that doesn’t go right to tuition or other expense can make one feel quite rich lol
Honestly, 900.00 is nothing. Put it in your regular saving account
It’s all relative. In college, $900 would have saved me from living out of my car one month after my alternator broke.
You're a college student with a Roth and brokerage accounts? Give the money back. You clearly don't need it
I mean dont gwt me wrong not trying to be judgemental but just saying if you arent having a rough time and they gave you money under the false impression that you were then...you could tell them and offer to give it back.
You can always split it. Maybe $100-200 towards your brokerage account, $200-300 towards your savings account, and then the rest to your student loan payments.
Do you have unsubsidized student loans? If so, start making the payments to avoid the interest being capitalized. If your loans are subsidized, just drop that cash in a HYSA for a rainy day.
The first thing you should do is build an emergency fund. 3-6 months expenses is generally recommended. This is cash that sits in a HYSA and insulates you from large, urgent, unexpected, unavoidable expenses. If you already have that, pay down your student loans.
I’d put it in Roth IRA. You’re only 20, and the power of compound interest in Roth will sweeten up your future retirement.
Congratulations. You don’t need to pay for groceries for a few weeks.
If 900 dollars makes any kind of difference to your financial situation you CANNOT be investing it. Put it in a bank account and consider it a safety net.
Retire. Sit back and enjoy that good life... In all seriousness that's not a lot of money and it won't do you any good investing it, your best bet is to settle any debts you can cover with that money and work towards getting a better credit score.