The 5 Smartest Places to Put Your Money in 2024

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Here comes a new year! Keep reading to learn the best options to grow your money and keep it safe in 2024. 

You’re likely occupied with a lot right now, such as finishing work projects before the holiday break, buying gifts for your favorite people, and deciding on a New Year’s resolution. Far be it for me to add more to your plate, but have you given any thought to your finances for next year? If you haven’t, you should. Here are five excellent places to put your money in 2024.

1. Debt payoff

If you have high-interest debt (such as that on a credit card), you’re in a bad position these days — but certainly not alone. The Ascent’s research team found that as of the second quarter of 2023, the average American had $6,365 in credit card debt. It’s never a good time to be carrying high-interest debt, but thanks to the higher federal funds rate (hiked to cope with inflation in 2022 and 2023), we’re seeing even higher APRs on credit cards. So the more debt you’ve got, the more expensive it is. While credit card debt may get cheaper in 2024, if the Federal Reserve lowers rates (this will not directly lower credit card APRs, but we could see lower ones as a result), it’s not a guarantee.

It’s best to make paying off your debt a priority in 2024. If you approach it with a plan, you’re likely to find more success. Consider snowballing your debt payoff (start by paying extra toward your smallest balance), as doing so will help motivate you. Another option is a debt consolidation loan, which gives you the perks of a lower interest rate, a set payoff timeline, and just one combined debt bill to pay each month instead of multiple.

2. An emergency fund

One way to give yourself more peace of mind is to save money for unplanned expenses. The typical recommendation for an emergency fund is to save three to six months’ worth of bills, because this amount gives you money to fall back on if you lose your job. It also gives you cash to pay for a home repair or a medical bill that your insurance doesn’t cover in full. If you’re currently lacking emergency savings, hop on it for 2024. The best place to keep your emergency fund is either a high-yield savings account or a money market account. Online savings accounts in particular are paying high APYs right now, thanks to lower bank overhead costs and the aforementioned higher federal funds rate. You’ll get a high APY with one of the best money market accounts, too, as well as easier access to your cash — many of these accounts come with checks or a debit card.

3. A 401(k) or a traditional IRA

If you work for an employer that offers a 401(k) plan, you should take advantage of that in 2024 if you haven’t yet. This is especially true if your employer also matches a portion of your contributions. Let’s say you’re eligible for a 3% match — if you contribute 3% of your salary, and your employer adds another 3%, that’s free money, and definitely worth getting. Every dollar you can save toward retirement now is a dollar that can grow thanks to investment returns and the power of compound interest.

Plus, traditional 401(k)s (and IRAs, too) are funded with pre-tax dollars, so you can shield some of your income from being taxed in the year you earn it. 401(k)s have higher contribution limits than IRAs — $23,000 in 2024. If you’re 50 or over, you can tack an extra $7,500 on top of that.

If you don’t have access to an employer-sponsored retirement plan, it doesn’t mean you’re out of luck. It just means you can open an IRA account on your own. IRAs also offer a great variety of possible investment options, making them an attractive prospect.

4. A Roth IRA

If you’ve already got a traditional IRA or 401(k), you might wonder why you might also want a Roth IRA. You are allowed to have both, and doing so gives you the chance to diversify your retirement savings. Roth IRAs and traditional IRAs are subject to contribution limits that are on the lower side; if you’re under age 50, you can contribute up to $7,000 across all IRAs in 2024 (add $1,000 if you’re 50 or over).

Roth IRAs function differently than traditional retirement accounts. You can withdraw your contributions without penalty before retirement age, and they’re funded with post-tax dollars. This means you’re paying taxes on that money now, rather than in retirement. And Roth IRAs don’t have required minimum distributions (RMDs), which means you won’t be penalized for leaving that money in the account past a certain age.

5. A new checking account

Finally, consider opening a new checking account in 2024 if your current one isn’t quite working for you anymore. With the rise of online banks, it’s now possible to find a great checking account that charges no maintenance fees — and some banks have even done away with overdraft fees, too! Plus, the best checking accounts are offered by banks that prioritize technology. With a mobile banking app, you can move money around from anywhere — imagine moving your banking activities into the 21st century.

The start of a new year means a new chance to get better with money. Use the above strategies and financial accounts to make 2024 your best year yet.

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