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If you keep your savings in a savings account, you can earn extra money through interest. Not sure what to do with your earnings? Here are some ideas.
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Saving is an excellent financial strategy. Having extra money in the bank can allow you to pay an unexpected bill with less stress or cover upcoming purchases without going into debt. To earn interest, many savers keep their extra cash in a high-yield savings account. If you’ve been earning interest on your savings and aren’t sure what to do with it, this article is for you. You can use additional money earned from interest to help you reach other life goals.
1. Boost your emergency fund
An emergency fund is a great financial tool. If you experience a financial emergency, like job loss, you can use these funds to continue paying your everyday expenses. You can quickly be put into a difficult and stressful financial situation without a solid emergency fund.
One option for using the money earned from interest is to stash the earnings in your emergency fund. Doing this will increase your emergency fund balance, making you even more financially prepared for the unexpected. Every extra dollar earned adds up and makes a difference.
2. Take a vacation
Another option is to use your earnings to take a vacation. While hard work is important, it’s also essential to prioritize your emotional and physical well-being. A vacation is a great way to give yourself much-needed time away from everyday life and work stresses.
Many people want to prioritize using their vacation days, but they don’t think ahead about the costs associated with taking a trip. If you want to take a vacation without racking up credit card debt, you can use the interest you earn from your savings account to fund your yearly trips.
3. Increase your retirement contributions
If you’re contributing money to a retirement account, like an IRA, you may want to consider your earnings to boost your annual contributions. Your IRA account can increase value through compound growth, so it’s beneficial to contribute more money early on in life to give your account balance more time to grow before your retirement years.
Review the annual contribution limits for your retirement accounts and decide if using your extra cash to increase your contributions would be beneficial. This may be a good option if you’re nowhere near the maximum yearly contribution limits and are prioritizing this financial goal.
4. Use it to improve your quality of life
Another way to use the money is to improve your quality of life. There are many ways to do this, but consider how you could make your life easier, less overwhelming, or reduce your workload. By improving your life, you may also be able to improve your overall happiness and feel less stressed. Here are a few ways to invest in yourself by improving your quality of life:
Pay for a task that you dread (like house cleaning)Treat yourself to quarterly massagesSubscribe to a grocery delivery subscription serviceSubscribe to a virtual fitness subscription or a gym membershipInvest in a high-quality mattressBuy a quality desk chair
Earn extra cash as you save
If you’re working hard on your savings goals, keep your money in an interest-earning bank account, like a high-yield savings account. You can earn money as your money sits in the bank. Review our best high-yield savings accounts list to explore your options. For additional financial tips, check out our personal finance resources.
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