Saving vs Investing

One of the most asked financial questions I hear is “should I save my money where I have immediate access to it or invest it for long term?” The answer is you should do both. But you should only keep enough in a savings account for an emergency fund ($1000- appliance or A/C unit needs repair or replacement) and for 3 months of expenses (if you lost your job you’d need a cushion while you find a new one). After you have those accounts funded, you should be investing instead of putting more into savings. Even with it’s ups and downs, the stock market still averages over 6% returns over a 10 year period. Most high yield savings accounts earn less than that and traditional checking accounts earn 1% interest or less. Here’s an example:

 So where should you save your money? I would recommend a high yield savings account so that it can grow at a higher interest rate than a traditional savings account. Go to nerdwallet.com and on the dropdown menu click banking à best high yield savings accounts and you can see which ones have the best rates. I use Sofi and it currently earns 4.6% interest. Their app is very user friendly and customer service has always been great when I’ve had to reach out to them. I will put my link below and if you open an account using this link and deposit at least $50, they will give you $25. You do need a direct deposit going into the account so I linked my paycheck to it and have 5% of my check go into that account each pay period and that helps me with saving! High yield savings accounts are great for saving towards a vacation, a car, Christmas/birthday gifts throughout the year and you can open several accounts to go toward different purchases.

Sofi Link:

Join me to start earning more money with SoFi Checking and Savings. You’ll earn up to 4.60% APY and pay no account fees. Use my link to sign up and you’ll get a $25 bonus and up to $300 when you set up direct deposit. https://www.sofi.com/invite/money?gcp=15cb81dd-4071-4ba1-8127-46d3e668ed0b&isAliasGcp=false