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S is for savings

It’s important to have some money saved up for a rainy day so that you’re always prepared in the event of an emergency.

“I'm talking about if the wheel falls off your car, or you end up having a roach infestation in your apartment,” Tu explains. “And as you get older and your expenses get larger and larger, that emergency fund needs to grow with you.”

Tu recommends you set aside three to six months’ worth of savings in a high-yield savings account — which could get you 4%-5% back in interest.

In comparison, a traditional savings account will earn you just 0.43% in interest, according to the FDIC.

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T is for total debt

The next step is to pay off your debts — and Tu recommends the avalanche method, where you start off with the debt with the highest interest rate first.

“Rank your debt from highest to lowest interest rate and pay it down in that order because it'll allow you to pay the least in interest and also pay it down in the fastest time frame,” she says.

If the prospect of tackling your highest-interest debts first seems too daunting, you can opt for the snowball method instead, and get some momentum building by clearing your smallest balance first.

But Tu warns that paying down your debts this way can be less efficient, since you end up paying more in interest over time.

R is for retirement

If you haven’t already got an account on the go, look into retirement savings vehicles — whether that be a 401(k) through your job, or an IRA — so that you can park some savings and grow your wealth for your golden years.

“These are essentially accounts that provide you tax benefits, AKA, you get a pat on the back for doing a good job and a little lollipop for doing the right thing — taking care of future you,” Tu says.

With a 401(k) or traditional IRA, you can contribute some of your pre-tax income and let it grow tax-free until you make withdrawals in retirement.

If you decide on a Roth IRA instead, you’ll pay your taxes upfront and enjoy your withdrawals tax-free later.

If you’re not sure which account is right for you and your retirement goals, you might want to speak with a professional financial adviser to help guide you through the process.

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I is for investing

Tu says it’s important to pick your portfolio carefully while you’re growing your money in your investment accounts.

“Do not try to cherry pick stocks,” she warns. “When I worked on Wall Street, I would see hedge funds blow up all the time. And these are people who have hired some of the most financially literate, super-educated economic experts — who had billions of dollars of resources at their fingertips — and they still couldn't get it right.”

Instead, Tu advises investing in a diversified portfolio of index funds, target-date funds, or even a few ETFs or mutual funds.

She says these baskets of investments can help people weather economic downturns more effectively, as opposed to overexposing themselves to one particular sector.

P is for planning

Lastly, Tu says you need a plan for the future — for retirement or whatever your happily-ever-after looks like.

She tells people to calculate their “F- you” number by determining how much money they’d need to live their perfect life, and divide it by 0.04. She says that’s “essentially what you would need to kick over your desk, tell your boss ‘F- you’ and walk away from [your job].”

With the S&P 500 historically offering an average annual return of 8%-10% and high-yield savings accounts providing around 4% back, Tu says you can figure out how much you need to have invested in order to eventually leave your job and live comfortably.

While Tu doesn’t picture herself ever retiring, she is still planning for her perfect life with her fiancé — with time for travel and dining out, one to two kids and a little English Bulldog. She and her partner already bought a $2.7 million New York City apartment when Tu was just 27, but she wants a vacation home as well.

“In my happily-ever-after … I get to live the life that I've always really dreamed of without having to sacrifice that much.”

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About the Author

Serah Louis

Serah Louis


Serah Louis is a reporter with She enjoys tackling topical personal finance issues for young people and women and covering the latest in financial news.

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