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Yup, I've always done it this way. They've also given me increases without me even asking. I have a total limit of around $30k or $35k with 2 cards.

They don't penalize you for spending a lot. They penalize for carrying debt for a long period of time. For example, if you purchase and pay off, then no impact on your credit score, but if you purchase and keep that debt, then it'll impact your credit score until you pay it off.

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Buy something on your credit card and then sell it.

For the tax year 2023, you can contribute up to $6500 of earned income (meaning, income that results from a job) into your Roth IRA. Once you reach that limit, you are done contributing to this year's Roth IRA. Fortunately, the contribution counter starts fresh each year. If you have additional money you want to invest, you could do it in a non-tax-advantaged account like a brokerage account.

Given your current living situation, it's probably not imperative that you set aside a 3-6 month emergency fund, but it also wouldn't be a bad idea to have 2-3 months set aside, just in case something really unexpected comes up.

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You can request a credit limit for your card. Also, having more cards will increase your overall limit.

$700 is a very low limit.

I have 5 cards with a total credit limit of 85k.

Do I use 85k a month? No lol. I spend $700-$900 a month on my cards (paid in full every 4 weeks).

Another strategy is to ask for a higher credit limit. This can typically be done online and only takes a few seconds. Over a few years you can increase credit limits 5-10K. For more immediate relief get another card.

People need to stop worrying about the numerator in credit utilization. Use your cards responsibly and pay them off in full every month. The key to lower utilization is in the denominator, which is easy to increase by just asking for it. Do this every 6-12 months.

OP if I were you, I would ask for a credit increase to $3,000. Even if you don’t get the full amount you will still get an increase. This will cause your CC utilization to go from 50% with the plane ticket to like 15%.

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May I ask why you want to do this?

Thanks for providing background and the explanation! So what you are saying is that the Merrill coding actually doesn't matter to the IRS? If Merrill calls the deposit a "contribution" and this puts me over the annual contribution limit, the IRS can do the math and see that a lump some of money came out and then went back in within 60 days so they automaticaly know it is an indirect rollover?

Thanks for encouraging me to call back! They told me I had to either write Merrill a check or do a wire transfer from the Bank of America side. Did the wire transfer... hopefully it works out. I will call Merrill again tomorrow to make sure that the transfer is coded correctly as an indirect 60 day rollover. This has definitely been a learning experience, I feel like I know more than most associates at Merrill about indirect 60 day rollovers now haha.

I just put $8,000 into one on Monday. If I need any of that money do I have to sell the whole thing?

Don't rush. Bit seems like you are off to a good start.

A Roth IRA right now would be a great idea.

>FZROX can only be bought/and or owned at Fidelty. Is this really that big of a problem

Not a problem. If you decide to move it later you can sell inside the IRA without tax consequences.

Save up a good pile of money for car-related stuff and for misc expenses and travel during college.

Follow the faq on here.

Here's what I was saying about the emergency fund:

In a few years, you're going to find yourself with a lot more expenses than you have now. A typical household expense is around $5k per month. The recommendation is to have an emergency fund with somewhere between 3 and 6 months of expenses. So that would be $15k to $30K. Plus, you'll be ahead if you start saving for your replacement car now.

The point of financial independence is that you never have to worry about whether you have cash on hand to pay for life's unexpected events, such as job loss, broken cars, new roofs on houses, and so on.

A worthwhile goal is to never take a loan out ever again except for the home you're living in.

All of that money should be in a high yield savings account, not the stock market.

But, it's stil important to contribute to your retirement fund, but make sure you're both contributing enough to meet your retirement goals but also not so much that you aren't able to live your life today. A good mindset is that every dollar you put in your roth is locked away until you're 67. Now that dollar is likely to have grown to be around $30 by retirement, so it's important to put it away (waiting 10 years cuts the growth in half). If you can afford to max the Roth every year do that. But when starting out be mindful of over investing.

You shouldn't worry about a brokerage account until you've got enough emergency fund and savings built up. Money you put in a brokerage should be thought of as money you're not necessarily going to be able to take out without losing money, depending on what the market situation is at the moment. For instance, many people have less value in the stock market today than they did 6 months ago due to the market taking a nose dive. So it's best for things you might want to do someday but you don't know when but it is likely to be a few years down the road and you can delay if necessary depending on the market.

Wow, thank you so much for the detailed response! I have actually been looking into Three Fund Portfolio , and that is where I got FZROX, FSKAX, and the rest from! I will follow the 60/40 split you are referencing (Total Market and International) but was wanting to ask how much you believe I should invest into my Roth IRA. I have 6k total in savings and no real expenses besides food, gas, and my shopping expenses (which are all quite negligible). I only ask this as I assume you are using the 1k total as a reference rather than an actual example of what I should be doing (unless that is what you are recommending, and in that case that it sounds fine to me!)

Finally, would you recommend me only opening and investing into a Roth IRA, or also opening a brokerage account? I only ask this as I never hear anyone talk about brokerage account, and I am assuming not everyone is JUST investing into a IRA. I would also assume you would follow the same approach, as in investing into index funds, specifically the ones I have listed. Again, I truly thank you for your response!

Forgot to mention that I've actually been reading JL Colin's Simple Path to Wealh. I just started yesterday and I'm around 60 pages in! I'll give the other books a shot as well, thank you very much!

I suggest reading some books. The Simple Path to Wealth by JL Collins. The Ultimate Dividend Playbook by Josh Peters. A Random Walk Down Wall Street by Burton Malkiel

You should start by looking at the section of the faq here which describes what order to spend money. Hopefully the helpful blog will post a link since I'm mobile.

That faq will tell you that the first stage is to build up a largish savings account. I'd recommend looking at what your expenses are going to be once you get put off college and start building that up.

Normally I'd tell people not to worry about a Roth until you have that built up, but you're in a unique case.

I'd suggest visiting bogleheads.org and click on the getting started link. That is a community site 100% about index investing. A companion sub is r/bogleheads

As far as what to invest in, you should have a total us market fund, a Total International market fund, and a bond fund.

Your investmentswill be divided up in this way:

First start with the percentage of bonds. 0% is fine at your age. When you get to be 30ish you should start adding some. Let's just say it's 10% so I have a number for the example.

You buy a good low cost bond fund in the amount you want. So if you invested 1000 and wanted 10% you'd buy $100 worth of your chosen bond fund.

The remaining 90% or 900 you'd split between the us and international funds. 60/40 is a fairly commonly recommended split. So you'd buy whatever 60% of $900 is of your US fund and the rest you'd buy the international fund.

As far as what funds, if you're at fidelity, you'd want to buy fzrox or fskax for the us fund, fnilx or fziax for the international fund, and probably something like fxnax for the bond portion.

Doesn't matter which of these you pick, as long as they're in a fidelity roth. The performance between them is so close that it doesn't matter, and because it's a Roth if you need to sell them to move to somewhere else later it doesn't matter.

There is an easier way though. If you bit a fidelity freedom INDEX fund, with a year close to when you'll turn 67, fidelity will automatically buy the equivalent of the funds above and will automatically adjust the ratios to match the most common recommendations of financial advisors for someone your age. You basically buy the fund and keep buying until you retire. Note they have index and non index versions of the funds, you want the index one as they have fewer fees and should perform just as well.

Edit: one final note. There are both minimum and maximum income limits for the Roth. Please double check you're within them.

Why?

Best advice I can give is do what I do… pay it off every 2 weeks…. Also don’t think you can get out of the high usage amount with a 700 limit. Need to get the limit increased

Nope only pre pandemic offers. "It's a trap" lol. They will offer you what seems to be a great offer on your used Honda just to get you into a more way over priced post pandemic honda... with an outrageous interest rate. Drive that sucker til the wheels fall off!... jk keep up on maintenance and don't let your wheels literally fall off

Just stay with the 30 year fixed rate loan. It will be less stressful in the long run.