So, you are looking at some serious cash in your savings account. No matter how you got it or where it came from, you now have some serious decisions to make. Should you spend it, save it, or invest it?
The possibilities are endless, but there are a few things you can do to continue to improve your current situation. Here are three options for taking the money and making it work for you.
The easiest option is to spend it. There are probably all types of things that you would love to spend your savings on. From a visit to an exotic location to new furniture, there are always things that you will want to buy.
Before making that purchase, remember that once the money is spent, you won’t be getting it back. It can no longer benefit you. While you will have new merchandise, it is drastically dropping in value. While you did have a great time away, all you have are some photos and souvenirs to show for it.
There is one instance in which spending could be a good idea. If you have a balance on a high interest credit card, it could be to your benefit to take the money out of savings and pay it off. While your money, or a portion of it, is still gone, you have also taken away a monthly bill that was continuing to cost you in interest each month.
You could keep the money in a savings account. Here, it is earning interest and remains nice and secure. Be sure to check out different types of savings accounts to be sure that you are getting the highest interest rate available. Many times, the higher your savings account balance, the higher the interest rate offered.
Aside from traditional savings, look into other no risk opportunities. You can put your money into something like a CD. While you will not have instant access to it, the money will grow at a higher interest rate and you are not taking on any unnecessary risk. Expand your idea of what a savings account really is.
If you want to take that money and grow it, consider investing it. For some, the thought of investing is a little scary. However, this is one of the best ways to increase your money. There are many different opportunities and you can choose the one that works best for you.
Some options are high risk but have the potential for higher rates of return. Others may be lower risk and will have a reduced rate of return. In either case, you have the chance to use your money to make more money than you could if it just sat in a savings account.
No matter what you choose to do with the money, be sure to set some aside as an emergency fund. You want to keep it easily accessible for those times when unexpected bills come in or something doesn’t go as planned.
You don’t want to spend it all and come up short. You also don’t want to invest everything and not have enough to pay your bills one month. Leave some of it in a savings account that will give you instant access should the need arise.