Your personal finances are a big deal. When you have enough in the bank, you feel like you’re in a much better position in life. And as a result, you’re healthier and happier, both in your home and in yourself. But how do you get there? Earning enough, budgeting enough, and saving enough.
However, once you’re happy with your income, being able to budget is one thing, but saving is an entirely different matter. Putting the two together is key to achieving financial (and mental) stability, but what happens once you do? When you manage to budget effectively, and put away a bit of money every month, what should you do with it?
If you have a savings account already, making your money go further is a great way to make use of it. After all, there are plenty of pension or retirement or investment accounts out there, and all you have to do is compare the providers to find the best outcome for you.
Most of all, make sure you’re working with a high interest savings account, to make sure your money makes you as much money as possible, even when it’s not being actively invested. Not to mention there are many ways to invest in this manner!
Maintenance is a very good thing to spend your savings on, and indeed, is one of the main reasons for having a savings account in the first place. Knowing you have a little nest egg that ensures your house will never break down around you is key for living healthy and happy later on down the line – but how much do you need for maintenance in all?
Usually, this means keeping about 1% of your home’s value around at all times. And this is a good amount for paying for jobs such as HVAC Repair or a water heater repair; to accomplish this, make sure you put away at least a fifth of your regular paycheck for looking after your home.
You’re going to want to use your savings to pay off various types of high interest debt. Making sure this kind of debt isn’t rapidly ticking over and creating more and more problems for you one day; credit card debt is one of the main things you’ll want to pay off right now.
Once you’ve paid off a credit card debt, you’re going to want to take out any further credit cards in a mostly risk free manner. This could be a great boost to your current savings account – a 0% APR card is a good example of this. Even for someone with a low credit score, as it gives you plenty of time to pay off any balance without incurring further fees.
All in all, your savings account is there to support you, so make sure you’re using it in the right kind of ways, to both supplement your current income and to keep that roof over your head from leaking.