So you've created a budget and seen how long it will take to pay off your debt and build up your emergency fund. You created long-term purchase goals to keep yourself motivated, and made some decisions about retirement. But you've changed so many little habits and routines, now you can't stop saving money!
The whole point of creating an emergency fund is to have that money available immediately. You pay for that access, because it means earning less interest. But there's a world of financial products that are safer and less time consuming than trading stocks, and that still make your money work for you.
Certificates of Deposit (CDs) are a good way to start. You define the terms -- how long it will take to mature -- and that money goes away. When it comes back, it brings more money with it! You then have the option of reinvesting, changing the terms or just taking the cash. The longer the terms, the better the interest rate, because you agree to leave it alone for longer and pay stiffer fines for opening it up early.
A fun way to balance accessibility and higher yields is by setting up several CDs at once, with different maturity terms. That way, you get the option to reinvest or take the cash more often, which means you're never that far from having cash available if you need it.
Read on for links to more tips on saving and investing.
- Business.gov. "Energy Saving Calculators from ENERGY STAR." 2010. (Oct. 15, 2010)http://www.business.gov/manage/green-business/energy-efficiency/calculate-savings/energy-saving-calculator.html
- Fuller, John. "What is car depreciation?" Howstuffworks.com. (Oct. 15, 2010) https://www.howstuffworks.com/under-the-hood/cost-of-car-ownership/car-depreciation.htm
- Money. "Lesson Two: Making a Budget." CNN. 2010. (Oct. 15, 2010)http://money.cnn.com/magazines/moneymag/money101/lesson2/
- Parkhurst, Terry and David Zatz. "Saving Gas Without Pain."http://www.acarplace.com/cars/saving-gas.html
- Rampell, Catherine. "How Much Americans Actually Pay in Taxes." New York Times: Economix. April 8, 2009. (Oct. 15, 2010)http://economix.blogs.nytimes.com/2009/04/08/how-much-americans-actually-pay-in-taxes/
- Roth, J.D. "How to Improve Your Fuel Economy." Get Rich Slowly. May 30, 2007. (Oct. 15, 2010) http://www.getrichslowly.org/blog/2007/05/30/how-to-improve-your-gas-mileage-23-top-tips-for-better-fuel-economy/
- Roth, J.D. "The Spending Habits of the Average American." Get Rich Slowly. July 14, 2009. (Oct. 15, 2010) http://www.getrichslowly.org/blog/2009/07/14/the-spending-habits-of-the-average-american
- U.S. Bureau of Labor Statistics. "Consumer Expenditures in 2008: Report 1023." U.S. Department of Labor. March 2010. (Oct. 15, 2010) http://www.bls.gov/cex/csxann08.pdf
- U.S. Bureau of Labor Statistics. "Consumer Price Indexes." U.S. Department of Labor. 2009, 2010. (Oct. 15, 2010) http://www.bls.gov/cpi/
- U.S. Bureau of Labor Statistics Office of Publications & Special Studies. "Focus on Prices and Spending, Consumer Expenditures, Volume 1, Number 4." U.S. Department of Labor. 2010. (Oct. 15, 2010) http://www.bls.gov/opub/focus/volume1_number4/cex_1_4.htm
- U.S. Newswire. "Jeaneology." June 12, 2010. (Oct. 15, 2010)
- Wang, Jim. "2009 Federal Income Tax Brackets (Official IRS Tax Rates)." Bargaineering. Sept 16, 2009. (Oct. 15, 2010) http://www.bargaineering.com/articles/2009-federal-income-tax-brackets-projected.html
HowStuffWorks talks to financial experts to find out the best ways to save money every day. And none of their advice includes giving up Starbucks.