Investing By Life Stage
Early Career

If you recently started your career, you may be just getting your financial footing. Perhaps you are saving for a down payment on a house or a car or have started saving for retirement. Here are some suggestions to help you move in the right direction:

Set up an emergency fund

Before you start investing for the future, you need to make sure you have "rainy-day" savings. Such an account should be able to cover your household costs for three to six months in case of a job change, major household repair or unreimbursed medical bills.

Start early

This is an ideal time to start investing for the future because the sooner you start, the more your account can grow over time. A tax-deferred account, like a 401(k) or an Individual Retirement Account, provides tax benefits that can help your money to grow.

Get a grip on your spending and debt

You may be enjoying the American Dream but struggling to pay for it. At this stage, it is important to try to keep a tight rein on your spending, so your debt does not overwhelm you. Of course, not all debt is bad. For example, the interest on a home mortgage is tax deductible, which can provide a big tax break.

Put your account on auto-pilot

Homestead Funds’ Automatic Investing Program allows you to start investing right away with no money down. You choose an amount and it's deducted automatically—directly from your paycheck or bank account as often as you like: monthly, quarterly or every payday.

How to choose investments for this stage

At any life stage you will likely have several financial goals. Early on, investors are sometimes striving to build an emergency account to cover unplanned expenses while at the same time starting retirement accounts. You will want to invest appropriately for each goal, meaning that your rainy-day savings should be invested in funds suitable for a short time frame, while your retirement account should be invested in funds suitable for long-term investment, assuming you have 10 or more years until you will retire.

For personal assistance selecting Homestead Funds, call one of our friendly client service associates at 1-800-258-3030. For online information to help you select funds, go to the "Funds and Performance" section of this website.