What to do with my money: Actionable advice by life stage


Executive summary

"Dear Ami" is Steward’s money advice column. Submit questions here.

Dear Ami, 
I'm good at earning and good at saving, but not as sure on what to do with my money. What are the top 3 things I should be doing on personal finance every 2-3 years?
- What to Do

In this week's advice column, we give "What To Do" a triaged “top 3” to-do list by decade of life. We’re using age as (very!) rough proxy for where you are on the wealth-building journey. If you’ve already knocked off the items on your decade’s list, feel free to “skip a grade”. 

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Table of contents

Written by
Ami Shah

Ami Shah is the CEO of Steward, unlocking the 1%'s wealth strategies for mid-career professionals to take care of their families and live the life they choose.

Steward helps mid-career working professionals or executives in their 30s -40s work through asset allocation and financial decisions exactly like this one. None of this article is financial advice, but if you are looking for modeling tools or human advisors to help you through this decision, we can help. Get started here!

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Ami Shah
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Dear “What To Do",
First off, great question. Earning is hard and time-consuming enough. Going the "last mile" of putting your money to work for you, can be overwhelming. So I'll share a triaged “top 3” to-do list by decade of life. I'm using age as (very!) rough proxy for where you are on the wealth-building journey. If you’ve already knocked off the items on your decade’s list, feel free to “skip a grade”. 

Grain (or make that barrel?) of salt. Personal finance is always more personal than finance. We’d love to help you with “beyond the basics” input, hyper-specific to your personal situation. If you’re interested in an actionable “to-do list” specific to you, give Steward a try here


1) Know your spending numbers:

Sign up for a budgeting app like YNAB or Copilot. 
- Seeing the totals of how much you spend each month, helps a lot of people cut down their expenses. 
- Why not Mint? Pros: It’s Free. Cons: It’s a little too ad-filled for our tastes, which makes budgeting like trying to diet at an open-buffet!  

Example output from YNAB

Add on a free "subscription-trimming" app like Truebill.
Truebill helps you identify any unwanted subscriptions you're still paying for.

Do a “bad debt” cleanse (interest rate > 5%). 
- Not all debt is evil. Many highly successful companies and families use debt as a tool, to help them make the most of their money.

- Hone in on “bad debt” = any debt where your interest rate is > 5%. Why 5%?  Your opportunity cost for paying down debt, is not having the chance to grow your wealth in the stock market. And the conservative rate of return economists’ are predicting for the stock market in the next ~20 years is ~5%. Historically this has actually been much higher (8-10%), but Steward using the more somber forward looking projections to be conservative. The key culprit here will likely be credit cards (they often charge 14% or more per year = 4-5x what banks charge for a mortgage!)

- Step-by-step cleanse guide: 
(1) Figure out how much debt you still have outstanding
(2) Figure out your annual interest rate on each debt 
(3) Check if you're paying any avoidable extra fees (think: late payment fees)
(4) Check if there are any opportunities to refinance (Sofi and Earnest are popular providers).

- Tools: 
(1) Try out online tools like unbury.me that allow you to compare different strategies to pay down debt.

Example of the unbury.me free debt scenario calculator

(2) Find more details on the two more popular strategies, the “avalanche” approach and “snowball” strategy in this great youtube guide (below)

2) Take advantage of your employer's retirement match:

Contributing up to your employer's "match" (if available) on your company's 401(k)/457/403(b) plan is a no-brainer. It's "free money" that's auto-invested into your future and tax-deferred! HR departments consider this part of your compensation package. Not getting the match is like tearing up a paycheck.

3)  Set up an emergency fund:

How much should have in your emergency fund?

  • This gives you a buffer and options in case you lose your job or get sick. That’s typically 3-6 months worth
  • of your household's expenses. 
  • Or whatever # of months will help you sleep at night.
  • Steward can help you run the numbers based on your specific situation on how much to set aside in cash here.

Where should you save your emergency fund? 

  • Put your emergency fund in an online high yield savings account (e.g., Ally, Marcus). Why a separate account?
  • The separation from your day-to-day checking, prevents you from accidentally dipping into your emergency savings. We use Ally (app pictured here) since it allows you to "bucket" your savings, with a separate “bucket” for your emergency fund.
  • These accounts offer ~50x the interest rate that a typical bank account earns you.
Ally's Saving Buckets


1) Pay you future self first:

Budgeting is as "fun" a habit as dieting. It’s easy to get started with great intentions, but then fall off the wagon. For a habit you can stick with, Steward suggests "reverse budgeting", or paying you future self first and then enjoying “guilt-free” spending with whatever’s left.
- Set up an automatic amount to go from your bank account to a personal investing account
- Automatically invest that amount for long-term wealth building (see more on how to choose a broker here), using low cost index funds and ETFs. 
- Need guidance on how much to invest vs. keep in cash or what to invest in? Steward can help you run the numbers based on your specific situation here.

2) Start contributing to a Roth IRA:

What’s a Roth IRA:
- The government rewards you with saving for your older age, by making your earnings tax free. 
- Try to contribute up to the maximum each year. This is one financial planners favorite tools.
- You can set up this account in addition to a 401(k) or employer-sponsored plan. More fancy tax savings!

What if I’m above the income limit?: 
- Good news. You can consider a Backdoor Roth - a sophisticated tax strategy that allows you to still contribute even above the typical income limits. 
Steward can help you figure out if you qualify and how to do this strategy here.

Roth IRAs
Breaking down a Roth IRA. Source: Napkin Finance

 3) Start on college savings for kids:

- Figure out how much to save: Check that you're saving enough towards your kids' (or future kids’?) education using Steward or this standalone tool from Vanguard.

- Save in the most tax-efficient way: Set up a 529 College Savings Plan for these savings. The government wants you to save for your kids' college, and gives you tax advantages for doing so! It’s like a retirement account, but for college savings.

- How does a 529 work save on taxes?: You put money in, and any growth is tax-free at both the federal or state level if you use it towards college or up to $10K each year for K-12 school. The tax benefit you’ll get varies on what state you live in, but you can use the 529 towards any school (not state specific).

- Where to learn more: My favorite “reference guide” for all things college education savings related is savingsforcollege.com. But if you're looking for a more personalized recommendation, Steward can help. Steward will recommend:  how much you should save, what state's plan you should choose and why, how specifically to invest, based on your individual preferences and life situation.


1) Max out your contributions to your employer's retirement plan (beyond the match)

- For 2021 that's $19,500 for 401(k) plans for folks under 50
- You can check the latest numbers here.
- Think of this as an auto-investment into your future, not to mention a "rain check" on taxes since contributions grow tax-free while in the plan and are taxable only when withdrawn from the plan. 
- The contributions will be deducted from your paycheck, but think of this as paying your "future self" first.

2) Nip lifestyle creep in the bud:

I know, I know - easier said than done! Here’s a once-a-year exercise to make it easier.
(1) Rather than worrying about each latte (anxiety-provoking!), make a list of any stores or items you spent on that cost over $500 last year.
(2) Rate each as high/medium/low satisfaction/ can’t even remember what this was.
(3) Any ideas on what to adjust your budget after that?

This image from Financial Samurai - "How to make $500,000 a year and still feel average", which some Steward clients call the "Where the @#$!'s the money chart" shows what lifestyle creep can look like in action.

Scraping By On $500K A Year: Why It's So Hard To Escape The Race
How to Make $500,000 a year and still feel average. Source: Financial Samurai

3) Keep track of your numbers: 

Use the free version of a tool like PersonalCapital or try the low cost Copilot. Personal Capital's free version works well for (a) account aggregation -It takes about 10 minutes to get a picture of your collective checking accounts, IRA, 401(k) accounts, and brokerage accounts in one place (b) analysis of your investing portfolio including 401(k) fees to see if you’re overpaying and (c) a net worth and cash flow calculator with good visualizations.

PRE-RETIREMENT (50s and 60s)

1) Gut-check your retirement plans:

 Check if you're saving enough towards work becoming optional and when's a realistic time to retire. You can get a personalized recommendation from Steward that’s integrated with the rest of your financial plan, or use this basic standalone calculator from Vanguard.  

 2) Do your annual “tax physical”.

Pay a CPA to review your last tax return for an hour of time and see what they can find, e.g. opportunities to pay less or any errors. Some people might even do this for free!

3) Revisit your estate plan:

Estate planning is not just for the ultra-rich! Think of this as a "god forbid" plan just in case you pass away. 

Step 1:
Set up the 5 foundational estate documents every adult should have with an attorney: (1) will (2) trust (s)  (3) advanced medical directive (4) healthcare power of attorney, and (5) financial power of attorney.

The 5 Essential Estate Planning Documents

Step 2: Ensure that each of your assets, including retirement plans, and insurance policies have a designated beneficiary aligned with your preferences, so that if you pass away unexpectedly they're going to someone you love and care about, rather than getting stuck in court!

Why now?
Steward recommends doing initial estate planning as soon as you have kids...but your 50s and 60s are a great time to revisit your plans. You'll know better by then, who might need support and who you'd trust to make decisions on your behalf.

Curious to learn more?

  • Personal finance is more personal than finance. Steward can help you customize and triage this further, based on the specifics of your unique life. 
  •  Steward is a personalized to-do list for how, where and when to invest and save on taxes in plain-English. Make the most out of your money, with minimal time and effort. Give it a try here.

Tools and Websites mentioned above:

Written by

Ami Shah

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