Are you keeping your money in the wrong place? Your money is important, and so is where you’re keeping it. So, let’s talk tactical tips you can implement today to be sure you’re keeping your money in the right place.
- If you’re holding cash in a savings and also have a ton of debt, you’re making a mistake. For example, the average interest rate for a basic bank savings account is .06%. Let’s say you have $15k in that account just chillin there. But at the same time, you’re credit card balance of $7k has an interest rate of 18.61% (current average) — you’re losing a hell of a lot of money. Instead, use the money in your savings to pay off your debt, and you’ll still have money left over to save.
- If you’re holding money in a typical savings account, you’re missing out on money you could be making in a high-yield savings account. If the money in your account is not intended for use right away, put it into a high-yield account so that your money can make more money.
- If you’re putting all your money into investing (stocks, bonds, etc.) with no liquidity (money you can get to quickly, like a bank savings), you need to change this balance. Investing is fantastic, but if you don’t have any money on hand (or can get to easily without paying any penalties) you are more likely to put an unexpected expense on a credit card.
- Are you are putting all of your money toward debt with no liquidity or emergency fund? It’s great that you want to get rid of that debt, but if you’re putting no money toward cash-on-hand or an emergency fund you’re going to go back into debt if something unexpected happens. You want to have some money chillin in a savings account just in case something comes up.
- If you’re keeping all your money in your checking and it’s easily spent, you’ll just keep dipping into it. If you have the mindset that you’ll save the left-over money, you probably will end up spending it. You need to get another account (preferably a high-yield savings account). Be sure that when you get paid you allocate some money right off the top for your savings account. Make sure you are putting in your checking account only what you are allocating toward spending.
It matters where you are keeping your money, not just that you’re keeping some of it. Do an audit on what you have in savings, checking, investing – be sure you are allocating things correctly so that you have a good balance for your needs and goals.