By Karen Doyle · July 1, 2019
You may be doing all the right things when it comes to your savings — putting money aside from every paycheck, contributing to your employer's retirement plan and diversifying your investments. But, if you are concerned that these things might not be enough or your goals are bigger than that, here are some money moves you may not have thought of that could turbocharge your finances and set you up with financial security for life.
There are two ways to increase your nest egg: Save more, and make those savings work harder for you. These ideas will help you do both, and get you thinking about how to save and then how to invest what you've saved.
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One of the keys to growing your savings is to keep the money in an interest bearing account, and don't touch it. Open a separate savings account at a bank you don't typically use. An internet bank can be good for this purpose since you won't be able to walk into a branch and take out the money.
Don't get a debit card, and, if possible, don't link it to your other accounts. When you want to deposit money, you can use mobile upload if available, mail in a check or go to a branch if it's not an internet only bank.
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Make sure you put your savings in a place where you can earn interest. Some savings accounts pay interest, but it may be a very small amount.
Certificates of deposit are another way to save and earn a higher rate of interest, but that may require you to keep your money locked up for years.
If you do remove money before the CD term is up, because of an emergency or some other reason, you will face a penalty fee.
If that penalty sounds like something you want to avoid, a good way to earn a solid return on your money and still have access to it is to invest in a no-penalty CD. For example, a 13-month no-penalty CD can pay at least 2.35% APY through some institutions. You don't get penalized if you withdraw the money early, so long as you wait seven days after funding the account.
This is an FDIC insured, guaranteed safe investment with no fees that pays a very attractive rate and allows you access to your money should there be an emergency.
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Stocks, bonds and mutual funds are just the tip of the investing iceberg. You can invest in just about anything, and some unusual ways to invest money have paid off big in the past.
Keep in mind that some of these investment ideas are very risky and may be unregulated, so be sure that you can afford to lose the money you're investing if things go south.
You can invest in commodities like gold, oil, orange juice or live cattle. You can also invest in shares of boats or buy loans, such as car title loans or commission advance loans. The possibilities are nearly endless.
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Here's a savings trick that works if you use cash frequently. Every time you get a $5 bill, tuck it into a spot in your wallet and don't spend it. That's right, every $5 bill you come across — just stash it away. Every so often deposit them into your savings account.
This works because $5 bills are less common than other denominations. As of Dec. 31, 2018, there were 3.1 billion $5 bills in circulation, according to the Federal Reserve. For comparison, there were 9.4 billion $20 bills and 12.4 billion $1 bills in circulation at that time. So tucking away your fives can be pretty painless.
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If you're frugal, you probably buy a lot of items when they're on sale, like clothes. But what do you do with the money you're saving when you buy at a discount? You probably use it to buy more stuff.
Here's a good way to save those savings. When you go to buy an item that's on sale, ask yourself if you would still buy the item if it were not on sale. The answer should always be yes or don't buy it.
If you buy it, take the amount you saved, and deposit it into your savings account. So, when you pay $25 for that shirt that was originally $40, put the $15 difference into savings.
And as that savings grows, you can move it into an account that will help it grow more on its own. By using an easy to open no-penalty CD, your money will keep working for you and be available for emergencies or anything else without the fear of a fee. It's a great option to save while getting a higher rate as opposed to most savings accounts that typically offer low interest rates.
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You may have stuff in your house that's worth a lot of money, but it's been stored away for so long you've forgotten you even have it. Go through your attic, basement and closets to see if anything that you've been keeping but not using has appreciated in value.
If you happen to come across an Action Comics book from December 1938 in mint condition, you could be sitting on a gold mine. One of these sold for $40,000 on a comic book site.
While your grandfather's baseball card collection may not include a Honus Wagner card worth $3 million or more, he could have a 1962 Roger Maris card that could fetch $2,200 or so if it's in mint condition.
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Every state has a program to notify people of property that is unclaimed. This could be a tax refund or the proceeds of an insurance policy.
There's a listing of each state's unclaimed property websites through the National Association of Unclaimed Property Administrators. Check the unclaimed property website for any state you've ever lived in, and for the names of deceased relatives who might have left you an inheritance.
A note of caution: Each state makes their listings of unclaimed property available to the public for free. If your name is listed as having property, there is no charge to apply to the state and submit the required documentation to get your property.
Don't get scammed by someone who says they'll claim your property for a fee. The process isn't that daunting, so there's no reason to pay someone to do it for you.
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This may seem like odd advice. For many financial advisors it might be very controversial. After all, credit card debt is the biggest threat to financial security, right? Well, it can be.
Credit card debt is different from credit card use. If you use your credit card for regular purchases and pay the balance off at the end of the month, it can actually help you save more.
First, you'll need a credit card that pays you cash back. Then, you'll need to use your card for groceries, gas and even monthly utility bills. And then — this is the most important step — you need to pay off your entire credit card balance before the due date. This way, you'll get cash back for what you've spent, but you won't pay any interest on your purchases.
Now, the next most important step is to put the money you earned through cash back into your savings account. Don't let it sit there just to add up or to use it for next month's balance. Put it into savings.
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If you think you've squeezed every last dime from your budget, maybe the only thing you have to do is wait. When you get a raise at your current job, or start a new job that pays a higher salary, bank at least half of your raise. Increase the amount that goes into your savings account by the after-tax amount of your increase if you can.
If your expenses also go up, maybe due to a longer commute at a new job, for example, factor those into your budget and bank the rest.
And to make the most of that raise, keep that extra change growing by investing it wisely. Because it can be hard to lock up your funds for a certain amount of time by using a CD, try a no penalty CD that can offer high interest rates and the freedom to remove your money before the end date without a fee.
You can then use that no-penalty CD to save and grow your money for big moments like vacations, major purchases, a wedding and more. You won't even have to know the exact date you need the money, but you will still be taking advantage of guaranteed high interest rates.
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If you're self employed, you may use a traditional IRA account to save for retirement. But even if you put away the maximum amount, which is $6,000 in 2019 and $7,000 if you're 50 or older, you may find your retirement account isn't growing as fast as you might like or need.
Self-employed people have other options, however. One of them is a Simplified Employee Pension (SEP). With this type of IRA, you can contribute up to 25% of your net self employment earnings, up to $56,000 in 2019.
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If you own your home, you're already a real estate investor. But there are many other ways to make money from real estate.
You can buy, fix and sell properties as they do on different fixer upper shows on television. You could buy a multifamily property and earn rental income. Or you could invest in a real estate investment trust, or REIT, which sells shares of a portfolio of properties like shopping malls, apartment buildings and other properties.
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Where you live has a significant impact on your expenses. If you can move to a location where housing and other costs are lower, you will be able to put more money into savings every month.
While this is a somewhat drastic change for many people, it's certainly one to consider if you're serious about setting yourself up for a solid financial future.
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Whenever you make a purchase, round up the amount to an even dollar value and save the change. There are some credit and debit cards that will do this for you, or you can do it yourself. At the end of the day or the end of the month when you get your statement, look at all your transactions and round up each one. Put that money into your savings account.
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This is a variation on the "round up" move. You may have a change jar in your house into which you dump your pocket change when it gets too heavy to carry around. This is a great idea, but you can make it even better.
First, don't use change when you're paying for something. Only use bills — this will give you the maximum change for your jar. Most importantly, deposit the change into your savings account periodically. Leaving it in the jar means you don't earn any interest on it, and when you finally do cash it in, you may be tempted to spend your windfall.
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Even if you earn a good rate of interest on your savings, it won't do you any good if you lose some of that money to fees. If you put your money in a savings account or CD, make sure there is no transaction fee or other potential fees.
Some savings accounts will charge you if you make too many — or too few — transactions during each statement period. And with CDs, you can face early withdrawal penalty fees which is one reason a no-penalty CD is worth considering if you're worried about unexpected expenses that you might need that money for.
You want to enjoy the high interest rates that CDs can earn you, but you don't want to lose more in penalty fees if you need to access that money before the CD term is up.
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If your goal is financial security, debt has no place in your plan. A mortgage, car payment and student loans may be somewhat unavoidable parts of life, but controlling the amount you pay for those loans can help you on your way to financial security.
Keep an eye on interest rates so you'll know when it makes sense to refinance your mortgage or student loans. When your car loan is paid off, keep that car for another few years. Take the amount you were paying on your loan and deposit it into your savings account every month.
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As with your other financial decisions, you'll want to do your research before deciding to implement any of these money moves. Be sure to create a budget for your expenses and see how much you can save and invest each month. And if you decide to commit to setting yourself up for life financially, these tips can help you get on your way.
