With the new year fast approaching, taking an inventory of your financial well-being can shape how you look at future years to come. Analyzing the progress you’ve made, whether it is building up that savings account you opened or hacking away at your student debt, are wins you should take pride in! There are also areas you may have stumbled, maybe you had to take money out of your savings account or you used your high-interest credit card a bit more than you would have liked and those balances are a little too high. These roadblocks happen, life happens, a pandemic even happens; you assess the damage to your progress and go from there.
Looking toward 2021, it’s time to figure out what goals you want to set, how you want to budget, what progress you want to make, and how you can achieve everything you want to achieve. Incorporating more investment opportunities into your life plans can bring about new paths to financial wellness. Here are some goals to strive for next year that can help you on your journey to financial success!
Normal savings accounts have a very low interest rate, sometimes you may have a higher one depending upon your financial institution and its rate systems, but overall, they are relatively low. Upgrading your savings game by taking some of your money and opening a certificate of deposit, or CD, will help you increase your earned interest much faster. The interest rate on a CD is always much higher than a normal savings account.
CDs work like this:
These certificates are a great way for you to invest in yourself with low risk. The money you invest is not going into a stock market or being turned into any form of cryptocurrency. Instead, it is staying right in an account at your financial institution. Planning for the year ahead and picking a term you feel comfortable with can allow you to maximize your money while it sits at the bank. Keep in mind when your CD term ends, you will have the opportunity to renew it, but at that time the rates for the CD may have changed – for better or for worse.
Buying a house is a great investment opportunity. There are many ways you can make a house a profitable experience in the short and long term. In the short term, buying a house at a low price to fix up, then flip and sell it for a higher price once you have completed renovations has the potential to yield great results. Something to keep in mind is this is dependent upon how the housing market is at the current moment, which can make this a potentially risky investment if this is your first go at it. You may also find this to be a profitable experience for you, and could make this a consistent flow of money.
In the long term, you can buy a house and do a few things with it. The first being that you can live in the home and use the equity to your advantage. Home equity can fund things like upgrades to the home, putting in a swimming pool, paying for education, or even starting a business. When you have equity built up in your home, you can use it for virtually whatever you want. You can also use a home as a rental property. Owning a piece of property that you can rent out to couples, families, college students, or young professionals is a great investment. If you choose the right home and the right area you can have great success here.
Things to consider when looking to buy a home as an investment opportunity:
Buying a house can yield many positive and lucrative opportunities for you, should you want to view it as an investment opportunity.
You may already have one or you’re a bit overwhelmed by the idea of starting one, but focusing on building out a retirement plan is a great way to invest in your future. If you work for a company that provides one, speaking to the account representative can help you start the journey and provide you with the right paperwork and understanding of what you may need. It is important to understand what your employer offers and what they don’t.
Understanding the types of retirement accounts available can be overwhelming. Here is a brief rundown of standard accounts and what differentiates them:
Retirement accounts can seem complex at the moment, but talking with your employer or the financial advisor appointed by your company and figuring out which one is best for you and your future will help relieve some of the anxieties you may face. Finding ways to invest your money in the new year can help open up opportunities for you to grow personally, not just your money, but also your knowledge and experience with financial literacy. Understanding how to spend savvily, save consistently, budget often, and invest wisely after this year full of uncertainty, will set you up for a stronger future.