Congratulations! You did it! You got yourself out of the paycheck to paycheck life and are now starting to save. The question now is, what should you do with your new small fortune? This is where we’ve got you covered with our list of the 6 brilliant moves you want to make to turn your positive checking account balance into your future empire.
1. Create An Emergency Fund
Let’s begin by focusing on the future. With something in the bank, it is time to start an emergency fund. By creating a small fund for emergencies we can prepare ourselves for any issues that may arise and can guarantee that a random car repair doesn’t put us back to where we started. Start with something manageable and consider how much you can add to this fund on a monthly basis. Many banks even offer higher interest savings accounts with stipulations of when you can remove the money. If you are an impulsive person this is the perfect solution as your money remains safe from impulse buys but is available for those times you really need it most.
2. Get Health Care Or Improve Your Current Health Care Plan
Medical insurance can be costly but the bills that can occur after an accident add up much faster. Looking into medical insurance for you and your family is vital to ensure that an appointment with the doctor won’t be detrimental to your bank account. By taking out a policy or improving your current policy you and your loved ones are more likely to get check-ups, take preventative measures and avoid future issues.
With the current pandemic, the issues around the current cost of health care have taken center stage. The right health care plan guarantees insulin if you are diabetic, the ability to afford hospital stays if the need ever arises as well as plans for dental, hearing, vision and even prescriptions. Everything but your health can be bought, so why not invest in your future health today!
3. Apply for a Term Life Insurance Policy
When thinking about the future, life insurance is definitely something you should be taking into consideration. There are many myths around life insurance that make people believe it is something you only need at a certain age, that it requires hundreds of dollars monthly or that it entails doctor check-ups and numerous forms. Well contrary to popular belief, nowadays it is much easier to acquire life insurance compared to the past.
Any one of us can kick the bucket at any time, and ensuring those you love aren’t saddled with your debts is a step in the right direction. Nowadays many different life insurance options are available that make taking out a policy affordable and easy. Bestow, for instance, offers easy life insurance within minutes for set terms of 10 or 20 years. With affordable pricing plans that start at $16 a month, you can help give you and your family peace of mind.
An insurance policy allows you to plan for the unimaginable. Whether you are a stay-at-home parent or the main breadwinner in the household – life insurance will save your loved ones from the many expenses that need to be undertaken. From funeral expenses, medical bills, mortgage payments, or the like, death does not mean the end to these expenses, ownership of these debts is merely shifted and that is why life insurance is so important. We all want to leave something to our families upon our demise and debts are not one of those things. The younger you are the less expensive life insurance plans cost so start now and sleep soundly at night – even if you don’t wake up tomorrow.
4. Pay Off or Pay Down Past Debts
The number one issue choking the typical American is an accumulation of debts. Whether this is from credit cards, student loans, medical bills, mortgages or the like debts are what keeps the majority of us below the poverty line – regardless of what we are actually making at our jobs. So how do we break the cycle for good?
Begin by looking into debts with the highest interest rates such as credit cards and pay those off to avoid those gruesome fees. If you are unable to pay them off in their entirety, pay them down to reduce future interest payments. Next, look into medical bills, the majority of which are paid by credit cards and therefore fall into this same high-interest category. After you’ve taken care of those, look into your car payments, student loans, and mortgage to consider refinancing options. You can pay down some of your loans while also reducing your monthly payments by refinancing at a lower interest rate.
5. Open an IRA
Making it to the ripe old age of retirement seems like a dream – if you are prepared that is. IRA stands for an individual retirement account and this account allows you to take advantage of tax-free or tax-deferred growth as well as provide options that some 401k’s don’t fully encompass. It is important to calculate your current expenses and begin determining what you think you will need for retirement.
Experts in the field suggest that you will need approximately 85% of your pre-retirement income for retirement so the sooner you start the better. These accounts offer tax-free incentives and a variety of other benefits that make them appealing as savings accounts – which they basically are. An IRA in combination with your 401k helps to ensure that you will indeed have enough money for retirement as many have come to conclude a 401k is not enough to maintain the lifestyle you are currently living. An IRA is also attractive as they tend to offer a broader range of investment opportunities than a 401k.
To maximize saving options, it is recommended to contribute the maximum amount allowed into your IRA, but it all begins by opening an account. With a little money saved up in your checking account, this is definitely something to consider.
6. Save for a Downpayment
They say the most expensive purchase one will make in a lifetime is purchasing a house and nowadays that dream seems to fall further and further away from the average American’s grasp. Only a few decades ago it was possible to buy a house with one full-time worker per household and nowadays with two full-time workers in a household – this dream still seems out of reach. With rent prices fluctuating and the housing market booming it is more important than ever to start saving for your down payment as soon as possible. Real estate is a tried and true investment opportunity and paying into a mortgage for an appreciating asset is the best way to prepare yourself for the future. Rental payments are costly and in the end, the property is not even yours. By purchasing a home, you are making an investment in your future, and that all begins with saving for a downpayment. If you haven’t started putting money aside – with more than $1000 in your checking account – now is the time to begin.
With more than $1000 in your checking account, you are already doing amazing and by considering these brilliant moves you can guarantee that you’ll be riding this awesome wave for years to come. Cover all your bases. Invest in yourself and your family’s future. Take out an IRA, check out Bestow for that easy life insurance plan, start your side hustle, look into a better health insurance plan and get yourself one step closer to your financial goals. By preparing for the future you can finally get the peace of mind you need and be certain of the future you want. Start today and truly reap the rewards.