$50/monthly~ what is best option?

Question

Where or what should I do with $50/month

I know it's small change to most, but I want

to start somewhere?

Answer 1

this is a good question.  i am glad that you are starting somewhere and no $50 is not small change.  everything helps and even more important is your attitude about needing to start somewhere.  not sure if you are young or old or if this money is coming out of a monthly salary.  but a good tsa investment through work which will be tax deferred is a nice start. if it is something simple that you want and are not looking for any type of interest return just go for the safe savings account. interesting on savings is so low so don't expect anything but the money that you saved.  This is good for what its name is.....savings..nothing more and nothing less.  when you get started and get to about $1000 you can open up a 12 month cd.  you might be able to get one at 3.5%.   good luck

  

Answer 2

Do you have any debts? Credit cards, etc.? If so, by applying that $50 to those and paying them off you can then increase the amount you can save. As far as where to go with the money, retirement savings differs greatly from emergency/rainy-day savings. It's recommended that you have 3-6 months of expenses saved as sort of 'Murphy insurance', and that's separate from retirement. IRAs and the like can't be withdrawn from without steep penalties, so they're not a good place to put your emergency fund. For that you'd be best off going with something like what many banks offer, which is a high-yield money market account (MMA), which often feature an APY not nearly so far below the annual rate of inflation as a standard savings account, so you're losing less value on your savings each year, while still maintaining access to it should anything come up.

Answer 3

You say it is to be used as a savings account.  It would depend if it is a savings for your emergency stash, a short term goal, or a long term goal such as retirement.

Prioritize what you need to save for:

1st- 6 month emergency stash (use a high interest online savings account)

2nd- tax advantaged savings such as 401k or IRA (find out what your employer does for  401k, look at Fidelity or another low cost online investment house for an IRA)

3rd-non-tax advantaged savings for long term goals (retirement, house)

use a high interest online savings account or an investment account, depending on how much risk you are willing to take

4th-non-tax advantaged savings for short term goals (vacation, wedding, car) use a high interest online savings account or Money Market

Answer 4

if you can do it put it into some type of 401k or roth ira.....thats $2400 a year...10 years thats 24,000 plus interest or gains from your stocks...you will have a good retirement which you will proabably need with soc security always an issue