If you’re lucky enough to have a little extra money sitting around, you may be wondering what to do with it. Here are some suggestions on how to best make your money work for you in the short term.
Have an emergency fund. This one is critical. You will probably need more than the standard 3-6 months coverage, especially if you living in an area with high unemployment and/or you have children. Put that money in a high yield savings account (which means not local) or a CD that gives you access without penalties. ING Direct and FNBO both have high yield savings accounts you can access online and link direct to your checking account. Ally has high yield savings and CDs that are low on penalties and let you withdraw when you need to.
As for your checking account, find one that charges no monthly fee. Where is the logic in that fee? You pay the bank for the privilege of letting them make good coin off your money? Why? Better that you find a no fee checking account with low or no monthly minimum balance. If you can find one that pays you interest, even better. Does that checking account offer perks? Find one that gives you points for your debit card usage and consider ripping up most of your credit cards.
If you have credit cards, keep at least one or two of them. Keep the ones that offer the best rewards. Don’t cancel your other cards unless you have impulse spending problems because shutting down old accounts can actually hurt your credit score. Use the ones you like for essentials that you know you can pay for each month. Pay off your outstanding balance and vow to always pay in full each month. Don’t let those companies make money off you again. Pay online to ensure your payment gets there within two business days and always pay before the due date.
Use more than just one bank. Not every bank has everything you need so shop around to find where you can get the best checking, savings, CD rates, mortgage and other loans. Don’t use one bank just because it’s easy, that’s how they get you. Use multiple banks, spread your money around and maximize it’s potential to grow.
Use your local banks when you need customer service the most, but expect that they will have the worst interest rates both for savings and loans. Use them for free services like your checking account and small emergency savings.
The author enjoys writing about a variety of topics including cleaning fiberglass shower stalls and tension shower rod.
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