Help...where do I put ESPP money?


Hi there! I don’t feel comfortable leaving $12K in ESPP but not sure where to park it…? I have $10K in savings for emergency and just paid off my credit card debt. Currently, from each paycheck, I am socking away 15% in ESPP (Employer match is 33.33% per quarter, and we are able to transfer as soon as it clears as purchased shares) and 10% to 401K (2% match, up to 6% contribution). In addition, I have $3K in HSA and $600 in limited FSA. Any/all suggestions are welcome! Thanks in advance!



Are you looking to move the $12k somewhere else? Or looking for suggestions on where to save future money?

First step/question would be how much are your monthly expenses? $10k should be good, but you could up that to cover anywhere from 3-6 months of expenses. Also… make sure you’re using a high yield saving account.

From there, it looks like you are not using a Roth IRA. That could be a good place to save future money (or transfer part of the $12k). The limit in 2019 is $6k.

Next I would up your 401k contribution as you see fit, up to the $19k limit.

And last, you could simply invest in low cost index funds in a brokerage account.

It’s tough because the 33.33% match on an ESPP is great… but if you don’t feel comfortable with, go with index funds in any of the accounts above instead (Roth, 401K, Brokerage).


@Juststartinvesting thank you so much for your suggestions!

ESPP match is given by just purchasing stock shares, it doesn’t take into consideration shares sold which is nice. Since I invest the max for this each paycheck (15%) to get the 33% match, I am left with only 10% to invest in 401K (match is 3% up to 6%).

$10K emergency fund should cover 5 months of expenses. Looking for a good high yield savings account, as you suggested :slight_smile:

I also have $3K in HSA and $600 Limited FSA.

Based on your recommendations, I am going to invest $6K into Roth IRA and the remaining $6K in low cost index funds.

I really appreciate you taking the time to offer such great advice!



No problem, couple other quick comments.

On the 401k, not sure what you mean by “left with only 10%”. If your company limits you based on this and the ESPP, that could be and then thats fine. If you think you just don’t have any more to put in, you might want to take another look. If you have the money to put into other low cost index funds, might be best to up your 401k if possible!

Great on the emergency fund! Discover bank is great for a HYSA, and I’ve good things about Marcus and Ally as well. If you’re looking for some places to start.

On the Roth IRA and brokerage account, I think Schwab and Vanguard are both great options there!

Good luck! It’s great you’re thinking about all this!



Since 15% of my bi-weekly income goes to purchasing ESPP shares, in order to bring home enough in my net pay, I can only put 10% of my bi-weekly income towards 401K. But since we’ve been chatting, I started to think about the fact that I am able use my ESPP money as soon as it purchases stock (which is only a few days). That way, I can invest 25% into 401K, my net pay will be a lot less, but then I can withdraw from the ESPP to make up for the shortage in net pay.

I really appreciate your thoughts on this.


Hi Laur,

You have many options to use your ESPP money. It will be better to invest it in something that you are interested in.
In market you will find numbers of option to use it.

Like you can invest it in:
1- Fixed Deposit
2- Mutual Fund
3- Real Estate (buy a property and put it down on rent)
4- Provident Fund
5- Pension Scheme
6- Government security bonds

Apart from the above you have more opportunities to start your own business. Even if you are a salaried individual what you can start your home based or online business also. For such businesses the required cost will be low. Later on, when you find that all is going smooth, you can complete move to entrepreneur’s world.

While thinking to start your own venture, at starting level you will not require much cost to start. A ration can be invested in any of the suggested scheme while while remain amount can be used according to the working capital needs of your business.