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I’m 26 & Save $3,500 A Month But Still Feel Like An Investing Newbie

Welcome to Taking Stock, a space where we can take a deep breath and try to figure out what the COVID-19 economy really means for our finances. Every month, personal finance expert Paco de Leon will answer your most difficult, emotionally charged questions about money. This last two years have forced many of us to reprioritize our finances, and there’s no clear road map for getting through the pandemic yet — but Taking Stock is here to help us figure it out together.
Last time, we talked about how to ethically invest so your hard-earned money goes to companies you believe in. This week, we heard from Refinery29 readers on their experiences regarding investing and saving.
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Bridget, 22 — New York
When Bridget was young, her parents set up a Roth IRA account for her. Now, she tries to contribute at least $2,000 to $3,000 to it each year. "I also contribute the max to my 401(k), which comes directly out of my paychecks," she tells Refinery29.
Although she has her Roth IRA set up, Bridget says that she doesn’t exactly seek out ways to get more into investing. "I feel that it’s daunting to start because of the possibility of losing money [in the market], especially right after college when disposable income is extremely limited," she says.
Bridget says having more education at a younger age on the subject may have made her more confident. "I wish that I had the opportunity to take a personal-finance class on budgeting in high school or college and that I learned more about investing in the stock market," she adds. "Maintaining a budget in college is something that would’ve been really helpful to me to prepare me to save and invest."
As far as ethical investing goes, Bridget said this isn't something that has particularly crossed her mind, but she says, "as I look more into investing in stocks, I likely wouldn’t invest in a company that is unethical in my eyes."
Morgan, 28 — New York
Morgan says she invests around $500 a month — it mostly goes into her 401(k) — but she's still apprehensive about it. "It feels like locking up money," she says. "I'm extremely well-paid, but it makes me nervous that if something catastrophic happens and I need the money it could be a down year for the market and I end up with less than I saved."
The root of Morgan's worry is the possibility of low likelihood, but high impact, market shocks. "As a corporate executive at a publicly traded company, it's not unlikely that any massive shock to the market could impact my employment or compensation," she says. "For the first six months of COVID, my salary was cut very substantially. I'm very privileged to have the income that I do, but that was unnerving and is only more so now that I have a mortgage."
Although she's a little iffy on investing, Morgan still thinks that ethically investing her money is very important. "I'm fastidious about tracking both my monthly budget and any investments that I do make. On the latter: primarily two high-yield savings accounts, and a handful of index/mutual funds," she says. "I know where my money is going for everything but my 401(k), where I use my company's suggested allocation."
Megan, 25 — Washington
Megan says she saves around $500 a month, $200 of which goes straight into her 401(k). "I want to start investing in other places, I just don’t know how to even begin or what to look for that would make it a good option for me," she says. "It does feel like a luxury attainable for those who are well-versed in the financial world, which I’m not!"
"I haven’t learned anything about investing except that I need to put money in my 401(k)," she continues. "I wish someone would’ve taught me the basics: how to find what’s right for me, how much to invest depending on what I make, and what happens with that money. Is it just magically out there somewhere?! How do I monitor it?"
When Megan does start to invest, she says ethical investing is important to her. "I want to invest in companies that have a positive impact on our world, whether environmentally or socially."
Emel, 26 — Texas
Emel tells Refinery29 that she currently saves around $3,500 a month, all of which goes into investments. "I live at home so that helps me cut down on my expenses tremendously," she tells Refinery29. "Once I finally graduated college, got a big-girl job, and started making consistent money, I decided to dive in head first into investing. Truthfully, I'm two years into my investment journey, and I still very much feel like a newbie. I've barely scratched the surface on investing, and every day I'm learning something new or unlearning something old."
Investing ethically is extremely important to Emel. "I'm very particular about my investments and try my best to stick to my personal ethical code, which is rooted in my faith of Islam," she says. "I don't want to invest in anything that harms or takes advantage of underserved communities. I also do my best to avoid dealing with interest, which is called Riba in Islam. This is because interest is believed to make the rich richer and the poor poorer. While I love making and having money, I don't want it at the expense of others."
"When deciding what will be an ethical investment for me, I look for investments that don't harm the environment, has a positive social impact, or at the very least, do not harm a specific community in any way. I also personally avoid investing in anything that has to do with alcohol, drugs, or gambling," she says. "That's simply because as a Muslim I try to avoid these things in general." Emel specifically uses Zoya to find ethical ways to invest.
Dayana, 29 — Spain
"I was broke literally all my life until 2020 when I took an online course, learned copywriting from this coach, and then started selling my copywriting services online," Dayana says. Once she had around $3,500 in her bank account, she started investing. "I felt like if I didn't invest I'd be dumb, according to all the articles about how your money is devalued if you don't."
Dayana says that growing up, she saw investing as a luxury. "I was born and raised in Bulgaria, where investing is just for rich people and is seen as extremely risky," she says. "We tend to hoard our money. My grandparents would hide the little money that they had under their mattress or in glass jars buried in the backyard. My family doesn't trust banks so I was hesitant to tell my parents that I invested!"
Dayana says investing ethically is important to her. "I actually invested in Disney after they said that they wouldn't abide by Florida's ridiculous Don't Say Gay bill."

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