Hey @Griffin McKisson, thanks for putting yourself out there! I'm 25, and remember going through a lot of those first questions, especially about what my first steps should be. It's awesome to see you going through steps now, because it shows you're thinking about the long game. Not a lot of people consider this stuff in early adulthood, so keep pressing to be ahead of the curve! :D
The first step I took was getting a credit card. The ONLY mentality you should have towards credit cards for the first 3 or 4 years is that they're a useful tool for building up a credit score. After my first two years, I had three credit cards - two that I swapped back and forth between using regularly to pay for basics like gas and food, and a third that I held on to for big expenses (car repairs, plane tickets, etc.). One of the biggest factors in your credit score is the average length of accounts, so having three accounts from early on will pay dividends in the future when you add accounts (think the average age of 4 accounts, vs the average age of 2 accounts). Another purpose for that was to build up credit with multiple lenders over time, because having a higher credit limit made my credit utilization lower. This is because if I have 2 cards at $500 limits, and spend $300 over the month on food and gas, you're utilizing 60% of your available credit. That looks risky to lenders, and negatively impacts your credit score. Conversely, if you have 2 cards with $1,000 limits and spend that same $300, you're only utilizing 15% of your available credit, which helps your score. As a rule of thumb, you don't want your credit utilization to be above 30%, but it's best below 10%.
That's an easy first step to take - look for and get a couple of credit cards, which can help you establish credit responsibly. My first was the Discover It card, and my second was through my bank - both of which I still have. Most people will caution you to only get one, and to have a tiny credit limit on it to make sure you don't go bananas on unnecessary spending, but if you're already in the mindset to use your credit cards as a tool for building credit, I don't think you'll have any issues with it. I'll say it's okay to do, because I was okay doing it. Having taken those steps in the beginning were foundational in getting my score above 800 before turning 25. I guess you have to know yourself as to whether or not it's right for you, but know that most advice you receive will be VERY conservative, since nobody wants to give advice that could have even a hint of sending someone down a bad path. If you're comfortable being a little more aggressive and proactive about growing your credit score, I'd recommend the path I took.
The next step will be dependent on your inflow of cash. $400 a month won't be enough to get started for a while. I think it's actually important for you to recognize that it would be very difficult to start a real estate investing journey for at least a few years. I didn't get onto the train until last December, and I'm still learning and saving and getting myself to a proper financial position to make those investments. Even if you're not financially set to start doing this for 3 years, though, you'll be 23 and still be WAY ahead of the curve. So keep the long game in mind, remember you're ahead of the curve, and set long term financial goals to aim at.
All that said, what are your expenses? What does that $400/month go to paying off? Additionally, are there other side hustles you can do to bring in more income? Great job, by the way, on gunning for your license!
