Have you recently received extra money? This extra money can come in many forms – a bonus at work, an inheritance, a financial gift, or even money you’ve managed to save simply from cutting your expenses. It could even come in the form of money you’ve earned from gig work, such as driving for Uber or DoorDash. Regardless of how you’ve obtained it, the big question is – what do you plan to do with it? It’s important to ensure those funds are used in a meaningful way, or saved for the future, and creating a plan for that money will help you not squander it or spend it carelessly.
If you’re interested in making sure this extra money goes a long way, here are a few ways you can put it to good use:
Create an emergency savings fund.
As this year has proven, we never know when an emergency can strike, whether it be a medical emergency, a loss of a job, a natural disaster affecting your home, or something unimaginable. Preparing for the worst might sound negative, but a healthy emergency savings fund can save you from financial dire straits. Generally, financial experts suggest you build up three months’ worth of savings in the event that you lose your income, but saving up to nine months if possible can really make a difference in that unfortunate scenario.
Pay down high-interest debt.
Interest rates can hit you hard if you aren’t careful, so whenever you find yourself with an extra sum of cash – even if it’s just $100 – it’s a great idea to use it to pay down any high-interest debt you’ve accrued. Because student loans are known to have high interest rates, it’s good to start there if you have that kind of debt. If you have questions or concerns regarding interest rates, our financial team is always here to offer answers and assistance.
Create a new goal – and use your extra money to save for it.
Perhaps you’re interested in a second car for your family, or you’d like to take a weeklong vacation somewhere special. You can use this money and build upon it in order to reach that goal. Set a timeline for yourself and how much you want to have saved, and calculate your initial “deposit” into that equation. Polam offers a number of savings tools, including our savings accounts, IRAs, and CDs that come with a variety of flexible terms and guaranteed dividends.