Some lucky people were able to save cash during the pandemic. Guess they were actually working and not shopping online like the rest of us. Capital Budget Strategies, LLC, Austin’s best Financial Coach, has some ideas what do with your cash right now.
First, pay off your credit cards and other debts. While you could earn 1.5% in an online savings account, your Visa is costing you 18%.
Second, set up an Emergency Fund. If single, set aside $1,000 and if a family save $1,500.
Once those very important accounts are funded, our Money Coach recommends creating a CD Ladder. This allows you to earn high interest, have cash available every 3 months and convert to a higher-paying CD if rates continue to rise. Here’s how it works:
Divide your total cash by 4. On the same day, take ¼ and open a 3-month CD, take ¼ and open a 6-month CD, open a 9-month CD and finally a 12-month CD. Now, every 3 months you will have a CD come due, allowing you to withdraw the cash, if needed, or reinvest it into a CD paying higher interest. When the CDs comes due, consider converting each to a 1-year CD, which pays even more interest.
After a year, you will have 4, high interest-paying CDs, with one coming due every 3 months.
If you don’t have the cash, but would like to, the Financial Coach at Capital Budget Strategies, LLC, can help you organize your finances.
For only $149, we will conduct a one-on-one Zoom Conference Call with you, and your significant other if you have one, and help you set up an Emergency Fund, determine your Net Worth, build a monthly Budget, organize your debt payments with a Snowball Payment Plan (if needed) and introduce you to the joys of online-only banks. Our sessions are intense so be ready!
Contact our Financial Coach if you have any questions about a CD Ladder, budgeting, an emergency fund or any financial matter.
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