HOW TO INVEST EXTRA MONEY WISELY -HOW TO SAVE MONEY !

HOW TO SAVE MONEY !

How to invest extra money wisely



HOW TO INVEST EXTRA MONEY WISELY -HOW TO SAVE MONEY !
HOW TO INVEST EXTRA MONEY WISELY -HOW TO SAVE MONEY !

PREPARING FOR THE WORST


More important than reserve funds You need to be prepared for something unexpected. Life is full of surprises. Not everything is happy.

What if you are unemployed, have a medical emergency, or have expensive car repairs?
Preparing for the worst can help you overcome those incidents. Although it does not hurt, at least it can be financially safe.

Therefore, experts advise that a savings account that is easily accessible in case of an emergency requires a minimum of three months and, preferably, six to nine months.

For example, if your monthly core cost of living is $ 3,000 a month, such as housing, grocery, car payment, and payable debt, you should put at least $ 9,000 in your savings account.

If you have a small sum of money, you must first make a savings account to reach a minimum of three months' expenses.

However, I strongly encourage you to help you navigate the toughest waters of your life with 6 to 9 months of cash.


PAYING HIGH INTEREST RATES


If you have saved an emergency deposit, the next thing you have to do with the extra cash is to repay all of your accumulated high interest debt.

High interest debt is assumed to be interest rate of 5.50% or more and is repaid as soon as possible.


PAYING CREDIT CARD LIGHT


Credit card debt is probably the worst thing about high interest debt.

Did you know that average Americans owe more than $ 6,000 in credit cards and that households with credit card debts pay an average of $ 1,292 per year ?

Considering that the average APR of the card in 2018 reached a record high of 16.71%, high interest payment is not surprising. It is most advantageous to repay as soon as possible.

For example, suppose you have a credit card debt of $ 6,000 at an interest rate of 16.71%.
Assuming that you pay back $ 100 a month and that you no longer owe it, it will take about 10 years to pay off the debt.

And worse, it will eventually pay $ 6,415 at interest.

On the other hand, suppose you make $ 1,000 more.

If you invest the extra cash in debt, you can reduce the repayment period to 39 months (if it is three years or more, you can repay it) and you can save $ 2,979 in interest.

It is money in the bank that you can use to reach other financial goals.

PAYMENT OF STUDENT LOAN

Next, the most common form of high interest debt is student loans. This will sound especially true for thousands of years, when you have an average student loan of $ 37,000 at graduation.


While the student loan rate is significantly lower than most credit cards, many have crossed the threshold of 5.50%, and this high loan balance can add interest.



Federal student loans are usually the least expensive for lenders, from 5.05% to 7.6% in 2018.


Assuming you have an average of $ 37,000 in student loans at a 10% annual repayment rate of 6.0%, you will eventually pay $ 12,293 at interest if you pay back the student loan with a minimum monthly payment for 10 years.


If you have a debt that qualifies for high interest rates, pay it back quickly.


Investing extra money on the debt can save you money in the long run and allow you to pursue other financial goals like retirement or a new home.


HOW TO INVEST IN FREE FUNDS: PLAN FOR THE FUTURE


Suppose you have an emergency deposit and you have no debt.

What do you want to do now? It is a good idea to start planning for the future.

Before you decide to put your spare funds into the stock market, it's a good idea to maximise future savings by taking advantage of available retirement accounts.

Depending on your employment status, there are several retirement accounts that you can use.
As a good rule of thumb, it is recommended that you first contribute to an employer-sponsored retirement pension plan.


Yes. Many companies will set a certain percentage of the amount you put in your retirement pension.

This is essentially free money in addition to the extra money you just put in your account.
Once you have contributed to the employer game, we suggest putting additional cash into your existing retirement pension or retirement pension, up to a maximum limit of $ 6,000 in 2019.

This is because they tend to offer lower fees and more diverse services, including more ETFs than mutual funds in retirement plans.

If you have extra cash left, put the rest in your employer sponsored plan. In an ideal environment, it's a good idea to make the most of your employer-sponsored accounts every year.

In 2019, the maximum amount you can donate through your tax-deductible account is $ 19,000, and for individuals over 50, $ 6,000 is available.


HOW TO SAVE MONEY FOR YOUR SAVINGS: SAVE FOR OTHER GOALS


If you feel that you are dealing with old age savings, you may want to invest your savings in other financial goals.

This may include a major trip, a down payment, a new car, or a child's education.
Of course, these goals will be unique to your personal living environment.

 If you know that you will not need this money for more than five years, you should put your extra funds in a long-term, balanced investment. Look for low-cost index funds. Funds with a management fee of less than 0.5% are best.

On the other hand, if you know you will want the money in the next five years, you should choose a low-risk investment such as a high interest savings fund, a deposit certificate or a financial market account.

HOW TO INVEST IN FREE FUNDS: INVESTING TO MAKE MONEY


But what if you are really rocking?

You are saving for an emergency, paying high interest debts, maximizing retirement savings accounts, and saving for future financial goals. Now what?
First of all, it is a good job. You can praise yourself as one of the few Americans who have arranged a financial house.

You are now really starting to work on your money. The next step is to invest in taxable intermediary accounts.

As with most personal financial decisions, the investment you choose depends on your own unique goals.

If you are saving to buy a new house, you may want to put any windfall into a financial market fund, a deposit certificate or even a corporate bond.

They have higher interest rates than average deposits or checking deposits, but they can receive money in the short term.

On the other hand, perhaps you are a relatively young and long-term investor.
You may want to save for a college education after five years, if you are saving to buy a home, want to retire early, or have more than five years left.

If you do that, you can risk a little more by investing more cash in a trading account that does not have the maximum amount you can invest each year.

With Robo Advisor, you can easily enter the market with low initial investment costs, and you can expand your money efficiently and painlessly.

Either way, it's a good idea to focus on building a balanced portfolio of low-cost index funds with lower management costs and a higher level of portfolio diversification than investing in individual stocks.

DONATE


And finally, if your finances are in order, you may want to consider giving back to your community by donating to charity.

Of course, there are potential tax benefits that you can get by donating to a charity, but there is also a warm feeling that you can get by knowing that you did a little good.

Of course, not all charities are made equal. So do your research to make sure you donate to something of value.

But once you find an organisation that matches your mission and values, donating can promote your moral and financial happiness.


And, if you're serious about what you're really giving back, there's a charitable fund that will help you effectively and efficiently allocate money to your chosen charity.





thanks for the time 

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