Question: I am a 26-year-old pharmacist earning approximately $100,000 a year — take home pay is about $5600 a month — living in St. Louis. I contribute 4% to my employer 401l(k), which is the maximum match. I currently have about $25,000 in my savings account for emergency funds. My rent is $850/month that I split with my girlfriend, and I do not have a car payment or credit card debt. But I graduated with $148,000 in total student loans with an average interest rate of about 5-6% (though still in the interest-free period). I have been paying $4,000 per month since graduating to get the total down to $113,000 currently. I want to start saving for a down payment on a house, so I have recently decreased my student loan payment down to $2,000/month and have been putting $1,000/month in a taxable investment account and $500/month into a Roth IRA since mid March 2022. But with the recent troubles of the stock market, I have already lost some money. 

I feel like the economy is declining and the housing market is in trouble, so I’m wondering if I’m doing things right? Should I keep renting instead of worrying about saving for a home at this point and just keep putting $4,000 month in loans until they’re gone? Most of my friends and family say I’m “rich” because I make six figures, but I do not feel that way given all the debt and no money saved for a home.  (Looking to hire a financial adviser? You can use this tool to get matched with an adviser who might meet your needs.)

Answer: It sounds like you’re feeling stressed about money and questioning your decisions, so we asked financial advisers and money pros what you’re doing right and what you might want to change. And then we dive into whether it’s a good idea for you to consider a financial adviser to help you out.

First things first though: The reason things might feel tight is because you’re a strong saver, and for that, you deserve to be commended. However, it is important to prioritize, particularly around your personal goals. 

“I would base your savings rate towards a home, and how much you can temporarily divert from the student loan debt towards a home, on how much you think the home will cost,” says Joe Favorito, certified financial planner at Landmark Wealth Management. So that might mean that if you believe it will cost $500,000 to buy the home you want, you might want to want to put down at least 20% to avoid mortgage insurance, which means you’d need to save about $100,000 over and above your emergency fund. That’s about $2,777 per month for three years with no earnings. “Then, you want at least an additional six months of emergency funds based on what your cost of living will be when you own a home, factoring in taxes, insurance, utilities and food,” says Favorito. Ultimately, it may pay to redirect some of the student loan money temporarily, but as your income grows, you can always pay additional principal, says Favorito. “Once you’ve secured a down payment, target at least 10% of your gross income to retirement accounts on a consistent basis,” says Favorito. (Of course, once student loan payments resume, always pay the minimum amount due.)

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But should you even be saving for a house? Well, that depends. It may feel hard to prioritize securing a long-term residence, and a home isn’t always the best investment, due in part to the carrying costs over time. It also may not be the right move for someone who might want to move soon, or a person who doesn’t want to deal with maintaining a home. But there are plenty of reasons to buy too: “While renting is something that might allow you to live with a positive cash flow, if your goal is to be married and raise a family, a home is a much more practical solution,” says Favorito. “Once you’ve got a fixed mortgage in place and your income grows over time, you’ll be able to catch up to some of the other savings and debt reduction goals.” That said, any money saved towards a home should be invested in cash-like investments like money markets, CDs or ultra-short term bond funds, not in anything that would introduce volatility, unless your home purchase is a number of years down the road. 

And you may want to look at paying down your student loan like this: It’s basically equivalent to buying an investment with a guaranteed return equal to the interest rate, because they would each have about the same impact on your cash flows, says certified financial planner Eric Figueroa of Hesperian Wealth. “I can’t predict the future, but high and rising inflation, high stock market valuation, negative stock market momentum, rising recession risk and rising interest rates together seem to confirm your suspicions that the outlook for stock and bond returns is poor,” says Figueroa. Some pros say this could mean it may be a better idea to focus on paying down student loan debt rather than bolstering retirement savings beyond what you already do (the match is worth getting after all). That said, that’s not a universally held opinion. What’s more, with such a positive cash flow, it might be worth considering a refinance of your student loans. 

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Furthermore, while interest rates are still frozen on student loans, this may be the perfect time to maintain your regular payment because all of it will come out of the principal, some experts say. “If you can afford it, this is the only time you can eat into principal [soley] by just making your regular payment which will accelerate your savings,” says Figueroa. 

It’s also important to understand that when you’re invested in the market, you will sustain losses at some point, and at your age, your retirement accounts should have a growth orientation. “This means a broadly diversified allocation of at least 70% in the stock market. Don’t let market volatility scare you as it pertains to long-term investing in things like your 401(k) and Roth IRAs, markets are very unpredictable in the short-term, but statistically pretty consistent in the longer-term,” says Favorito. And while it’s hard to do, Figueroa says try your best to ignore your Roth IRAs performance until you need it many decades from now. “Just keep investing in long-term assets regularly over time. You don’t need the money anytime soon, so put the money to work,” says Figueroa.

Should you hire a financial adviser to help you?

Maybe. Pros say, in your case, a flat-fee adviser (some advisers charge a flat annual retainer fee that is generally in the range of $2,000 to $7,500) or an hourly fee adviser (hourly rates are roughly $200-$400 an hour often) could be a good bet. These types of advisers could walk you through volatility, present your spending and saving priorities in a cohesive manner and develop a financial plan you could follow. (Looking to hire a financial adviser? You can use this tool to get matched with an adviser who might meet your needs.)

“An hourly or retainer-based adviser can help you set up your savings plan and put your strategy in place on more of a project basis. A retainer-fee adviser can help you set up your plan and assist with ongoing monitoring and management,” says Zack Hubbard of Greenspring Advisors. Here’s what an hourly financial adviser might cost, and here are the question you should ask any adviser you might want to hire.

Ultimately, it’s up to you. Some investors love the help of a professional, especially during times of market volatility or when they have a lot of competing financial demands, though it will cost you. And some find that they can do it alone. Here’s what to ask an adviser you might want to hire.

• Questions edited for brevity and clarity

Have a question about your financial adviser or looking to hire a new one? Email your questions to [email protected].