Is Your Money Working for You?
Money. We all wish we had more of it, right? Some people dream of hitting the lottery, quitting their jobs, and moving to a remote island where they can live out their days in paradise. Yet for most people, this fantasy never comes true. But what would you do if you earned a substantial raise at work, were given a large bonus, or inherited a large sum of money? Even a small windfall can go a long way with the right savings plan in place. Here are some tips to help make your money work for you:
Know what you can spend
It’s only natural to want to celebrate when you’ve come into money. But it’s important to take a breath and not to get too ahead of yourself. One of the smartest moves you can make is to hire an experienced financial planner. This trusted advisor can help you assess your current financial situation and long-term goals to determine what you can comfortably spend, now and in the future. You’ll want to think about what you want to allocate toward spending and savings in terms of percentages, rather than dollar amounts. Keeping the big picture in perspective is critical to making your money work to your advantage.
Depending on the source of your income boost, it’s also important to know how this money will be taxed since not all income sources are taxed the same. This will help you determine exactly how much money you can spend or invest.
Adjust your financial plan
Now may be the perfect time to either create a financial plan or make changes to the one you already have. Before you do, there are a couple things you should keep in mind: Is this a one-time financial boost or a new financial reality? Should you pay down debt on student loans, or are you now much closer to your retirement goal? It’s important to assess your full financial picture, and determine what changes need to be made (if any). Your financial goals may have also changed since hitting your income boost. Make a list of your goals, and share them with your financial planner. They’ll help you create or update your financial plan.
Determine the best savings plan for you
Having money in the bank is critical to your overall financial security. But given your unique situation and goals, what’s the best way for you to save? There are many creative savings solutions to consider depending on how much liquidity you’d like, your level of flexibility, and the minimum amount you can deposit. A CD, or certificate of deposit, is a popular savings options that has a fixed rate and term. CDs tend to have higher interest rates, but also offer less flexibility and lock your money away for a certain period of time. If you want to lock into a specific rate or possibly set aside a fixed amount of money for a big purchase down the road, a CD might be best for you. Talking to your financial planner about short- and long-term goals can help you determine what type of account or investment option is best for you and your family.
Your financial journey isn’t linear. It ebbs and flows over time as your life progresses and situations change. At Sandy Spring Bank, we’re here to be your advocate and help you along the way. Give us a call at 800.399.5919, stop by one of our branches, or visit The $tation, your destination for all things financial education and empowerment.
Wealth products are not FDIC insured, not guaranteed, and may lose value.
This material is provided solely for educational purposes and is not intended to constitute tax, legal or accounting advice, or a recommendation for any particular strategy or transaction. You should consult with your own legal, accounting, tax advisors, and/or portfolio manager regarding your specific situation and needs.