Six Smart Ways to Think about Making Your Money Work for You
Smart money management isn’t just a question of watching expenses and paying your bills on time. It requires learning, research, and determining what works best for your needs. Although these tasks aren’t difficult, many people don’t take the time to understand how to grow their money and make it work harder for them. Here are a few tips from financial experts to help you find ways to make your money more useful to you.
Change Your Bank Account
Almost no bank offers a good return on your savings, but you can put your money into a free account, or into an account that offers interest if you keep a certain balance. This type of account can help you to make money instead of giving it to the bank in fees. Check to see if you can apply to get one of these accounts. Banks are usually more than happy to help set up these kinds of accounts and it’s an easy way to make your money work better for you.
Refinance Your Mortgage
Many banks are offering good rates to their customers to refinance their homes, which in some cases can lower your monthly payments, and allow you to pay more toward the principal each month. It’s a good way to start paying off your mortgage faster and can help you with your debt. Talk to your bank and other services who can make sure you’re qualified before starting. Banks and lenders will want to make it seem easier to get approved, but be thorough with your mortgage application.
Set Up Contributions to A Mutual Fund
You can set up monthly contributions to a mutual fund to invest in different areas of the economy. The monthly share purchases allow you to buy both when the stocks are high and low, and will help increase your investment holding over time. You might need to talk to a financial expert before you find a fund that is right for you. Trading stocks can also be a good option, if a little risky. Talk to your advisor and make sure you know when to sell if you decide to go this route.
Purchase Investment Property
Rental property can provide regular income to supplement your retirement funds. A multiple-unit building can provide one unit for your own use, and allow you to rent out other units for profit. A significant amount of your expenses can be deducted, and certain tax benefits apply to rental properties which can lessen financial strain later. If you have a second home or cabin, use these as renting opportunities as well. You might be surprised how much you can earn with just a summer rental. Be sure you have the means and time to clean up and prepare for each new renter though.
Maximize Your 401K
If your employer offers a 401K and matches your contributions, take advantage of this opportunity for free money for your retirement. Put in the maximum amount you can, and your employer’s matching contribution will help your savings grow more quickly.
Use Your Credit Wisely
Credit is a great way to expand your opportunities for investment in business or real estate, though a heavy credit load can quickly become a burden that drags you down financially and can lead to bankruptcy. Always calculate carefully when using credit for any type of purchase. Avoid high interest credit cards and other loans. If you do decide to use credit, pay it off as quickly as possible, so that you can be free to use your money for more immediate needs.
Managing your future finances doesn’t have to be an intense training in the stock market. Simply find where you aren’t utilizing your own money wisely. A financial advisor can help you find these opportunities, and in no time you’ll have a sizable nest egg ready for retirement.