Hi! I’m about to turn 25 and have only $5000 in my bank account. I really want to invest $1000 every month, and not just invest $10 so that my money can grow more in the long run. But right now my income is not high at all…I make only about 700-800 a month. How should I invest or how much should I invest if this is my situation?
I also won’t be getting any income for the next couple years because I am going back to school. I appreciate any advice/suggestions!!
Welcome @Mwang95!
Well… remember to think long term. As they say, you can’t squeeze water from a rock. $700-$800/month, depending on where you live, is like poverty level money. There’s no amount of wagging my finger and telling you to be frugal that will make that amount of money work.
So what to do? Think about where you want to be in 5 years. It sounds like you’re in school and already doing that! What are you studying? Are you going towards a degree that will dramatically increase your income? If so, basically I wouldn’t worry much about investing right now. In fact, I’d focus on just getting by and staying out of debt. If you can get through two years, debt free, and come out with a degree and a much higher income, THAT is the best investment you can make right now. Putting some of your small income away won’t make a big enough difference down the road.
So let me ask: What do you expect your salary to be when you graduate? Do you have debt? Are you acquiring more? Are you a full time student?
Hi Jeremy!
Thanks for your response. Once I graduate school my income will dramatically increase. As a new grad, I will be making close to 6 figures and as I have more experience my income will be more than 100,000. Right now I don’t have any debt. Once I come out of grad school (3 years), I may have 1 year worth of debt. I will be a full-time student which means I will not be working while I am in school.
From what it sounds like, since my income is not high at all right now, I will focus on investing in my education first and then I can invest much more once I’m out of school and make better income.
Aw, yeah, I would absolutely not invest until you’re out of school (maybe with like $100 just to learn how). But it sounds like you’re setting yourself up to be in great shape. Just live frugally, avoid debt as much as possible. Any cash you have, just pile up in a savings account. You may need it to cover housing, relocation, other expenses as you transition into your next career. Once you get that job, keep living frugally, pay off any debt FAST, then convert those debt payments to investing and you’ll be rich! 
Is it necessary to have a high yield savings account? Right now I’m with Wells Fargo so my money is just sitting there in the bank. Is it a wise choice to move to a high yield savings account where the company may not have a physical branch?
Hi Michelle! I’m in grad school as well! I think that regular bank account vs HYSA is more a convenience issue. Personally, the 3 years and small amount of difference in interest is minimal enough to no be worth it. Best of luck!! Hope CoVID-19 hasn’t derailed your research!