When I posted about my so-called "raise," I said that I would get back to contributing to my 401k.
And I will, but not yet.
I've decided to put the "raise" (notice the quotations...) toward my six-months living expenses goal first. Once I save six months, I will turn back to investing. I hate to lose investing time (since it really is all about time, especially when you don't earn a fortune, like I don't!) as I am already 31, but I would feel more comfortable with the cash saved. I also tend to do better blasting away one goal at a time.
Saving the six months, though, should only delay me getting back to investing by four months. Hopefully, the market won't do a mad 180 and then explode off the charts in that time. :-)
On that note, I am curious what you veterans have to say about this AND what you newbies are trying to figure out -- especially if you are still in debt.
If you're still in debt, I say you should get your money together this way, in this order:
1. Save $1,000 emergency fund.
2. Focus like a laser on paying off all your debt.
3. Save 3 months of living expenses.
4. Invest, contribute to your 401k, open your own IRA, whatever.
5. Work on saving 6 months of living expenses (I don't think it's necessary for most people to have any more cash than that liquid) with continuing to invest.
Of course, if your employer offers a match on your 401k, then contribute up to the match while you do all of the above. Don't leave that free money on the table.
(Addendum: These are just guidelines based on what worked for me, but all of this depends on your actual financial situation. For some of you, my little 5 steps may not work at all.)