It's no secret that many Americans aren't good savers. In part, that's because spending is a lot more fun. To jumpstart your savings, use your tax refund or bonus for start up money. Here are some ideas about where to put it.
- Create, or add to, your emergency savings fund.
Most people don’t have the 3-6 months’ worth of living expenses set aside that experts recommend so you don’t have to rack up debt during a period of financial uncertainty. Consider opening a separate savings account or opening a short-term savings certificate so that you’re not tempted to “dip” into it for regular expenses.
- Start a vacation or holiday fund.
Start planning and putting money aside now for your next year’s family vacation, holiday trip or gifts. You will be more able to enjoy those special events knowing that you already have the money saved instead of going into debt for those expenses.
- Open, or contribute to, an Individual Retirement Account (IRA).
Give a boost to your retirement savings. Visit Retirement Central to use planning tools to compare Traditional and Roth IRAs, determine your eligibility to make contributions and open an IRA online.
- Make your first personal investment.
There’s no such thing as “too little” money when it comes to investing. It’s just a matter of finding the right investment tool for the amount of money you have to invest, how much risk you feel comfortable taking, and when you need to be able to access that money.
- Open, or add to, your children’s college savings funds.
The money will grow and earn interest to help you achieve a personal goal of sending your child to college.
Need a splurge?
Consider splitting the difference. Instead of spending all of your tax refund or bonus, spend half of it and put the other half toward your savings goal.
As you continue add to these accounts, you'll begin to have real peace of mind. See Savings Strategies to get more ideas about how to keep saving through the year.