Whether it’s a bonus from work, a gift, or even finding a $10 bill on the ground, unexpected money is always a pleasant surprise. So, should that extra cash go towards paying off debt or should you save it? Here are some questions you can ask yourself to help make a decision.
WHAT DO YOU WANT TO ACHIEVE?
Take a look at your own financial goals. Do you want to get those student loans paid off? Or maybe finally take that long needed vacation? You’ve set your goals so you know what your priorities are. If you’ve already decided your loans are more important, that’s what you should focus on.
HOW ARE MY EMERGENCY SAVINGS?
It’s recommended to have at least 3-6 months’ worth of expenses saved up just in case of an unforeseen medical emergency, job loss, or other incident. If you don’t feel comfortable enough with what you have currently saved or you haven’t started, this is a great place to store that extra cash.
HOW MUCH WILL THIS DEBT COST IN THE LONG RUN?
When creating a payment schedule for your debts, you need to take a look at the bigger picture. For example, a $5,000 loan with a 3% interest rate will cost an additional $150 in interest payments. Debts with high interest rates should be your highest priority as you start to tackle paying any debts.
AM I TAKING ADVANTAGE OF MY 401K?
If aren’t taking full advantage of your employer’s match on your 401k, this is great place to stash extra cash. You are guaranteed to receive a return on this money, getting way more out of it in retirement than you would now.
If you need help getting started on your savings, we have several options from which to choose. A money market savings account through Cyprus Credit Union features a higher interest rate than a regular shared savings account. However, there’s no set term so you can withdraw money at any point without penalty. For more information, stop by a branch or call (801) 260-7600.
