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Congratulations on having such a problem to deal with! Sounds like you're off to a good start by creating a budget and getting a 401(k) going. A lot of people never get around to those.

My first suggestion is to bump up your 401(k) investing. You can contribute up to $15,500 this year, and you're putting in less than $6,000. This is a GREAT time for someone your age to be aggressively saving and investing for retirement, both because stocks are so beaten up and because time is so heavily on your side. Even if you just dump it into the money market fund for now, stuff that account as full of pretax income as you can stand. Then start putting it to work in funds or the "canned" programs. You'll thank yourself in twenty years.

Also consider opening an IRA. Assuming your income improves over the years, you'll want another vehicle for putting away pre-tax or untaxable money. Both the traditional and Roth versions have advantages and drawbacks. I suggest consulting a financial planner.

Sounds like you're putting something into savings, which is a good idea in case you need emergency cash. I use a Schwab brokerage account, which pays a little better interest than a savings account, and I can write checks on it if I need to (or do an electronic transfer to my bank account). Plus I can buy stocks or mutual funds with excess capital.

I would continue to pay the minimum on the student loans. My guess is the interest rate is pretty low, and if you have an emergency it's easier to defer them than other debt. You didn't say what the rate is on your car loan, but if it's more than 7-8 percent I'd work on paying it down faster, especially if it's for more than 4 years.

I hope you're paying off your credit cards in full each month. Don't fall into the trap of maintaining a balance there. The high interest rates and stupid fees will suck you dry. We have a cash-back credit card that we use for most purchases, even groceries, but we always pay it off each month.

Now, all of this advice is based on just what you laid out. But are you planning to get married soon? Or purchase a house down the road? In that case, you'll need accessible funds, so you may need to limit 401(k) or IRA contributions. Again, a good financial planner can help you get all that sorted out for a reasonable fixed fee.

Finally, I think you'll get more responses if you post to a more active board. This one is pretty sparse. Try the "Learning to Invest" board in the "Investing Beginners" forum.

Best of luck whatever you decide.

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