Background: I’m a college student, and I’ve saved up $10k in a high-yield savings account from internships and jobs. Next year, after I graduate, my friends and I are planning a big trip to Asia, which we estimate will cost around $5-6k.
I’m thinking of moving $8k into a Roth IRA and contributing to it monthly (even though I don’t have a job right now, I’ll have other income sources). I’d keep $2k in the savings account and build it up to $5k for the trip. I’m also hoping to cover the remaining $3k from tax refunds and university refunds and save on flights by opening a new credit card (Chase Sapphire Preferred) for the sign-on bonus.
Does this sound like a solid plan? Should I invest in something other than a Roth IRA? My main goal is financial freedom—I don’t want money to be a source of stress. I just want to enjoy life.
$5-6k sounds like a lot. I think you might be overestimating the cost. A roundtrip flight shouldn’t be more than $2k, and you can find good hotels for around $50/night. Plus, you’ll probably spend most of your time exploring rather than in your hotel. Unless you’re staying for over a month or plan to spend thousands on food or shopping, your estimate might be higher than needed.
Since it’s a 3-week trip, it makes sense to over-budget in case of any unexpected expenses. Better to have extra funds for any surprises that might come up along the way!
Do you have an emergency fund or any plans for when you return from the trip? It might be worth keeping some savings aside to help with finding a job, housing, or anything else you might need after the trip.
The $10k I’ve saved is my emergency fund. After I return, I plan to get my licensing and start working in 2026. I already have a full-time job offer with a company.
I’d suggest keeping everything in your HYSA for now and enjoying your trip. Once you’re back, you can focus on maxing out your Roth contributions. You’ll still have time to contribute for 2024 during the first quarter of 2025.
Go to Japan, the experience will create opportunities and memories that money can’t buy. Well done on saving up that amount! Look for good deals on flights and accommodation, and remember, you don’t need to splurge on expensive tours or meals. Even 7-11 food in Japan is incredible. It’s truly a unique place!
