Smart Moves to Make with $5,000 in Your Checking Account

If you have $5,000 in your checking account, your financial future is looking pretty bright! You have likely worked hard for that cash, and you are ready to use it wisely. Take a look at these tips for investing, saving, and using your money in a smart and savvy way. When you follow these pieces of advice, that money will all be used in a good way. It may even grow into a larger sum! Make some financial moves, and you will be glad you did.

Open a Savings Account

Having your money sitting in a checking account will do you no good. Checking accounts usually do not offer interest, so your balance will never grow organically. A simple savings account will provide basic interest payments on your balance. This will help your money grow slowly and steadily! Even a little bit of interest will accumulate quickly on $5000!

Contribute to a Retirement Account

A retirement savings account will offer higher interest rates and ensure that your money is safe and secure until you are finally ready to retire. Consider contributing to an IRA account or your company’s 401(k) plan. These accounts offer tax benefits and compounding interest. Most retirement accounts do not let you make early withdrawals, which means you will not be tempted to spend your savings.

Start an Emergency Fund

Everyone should have an emergency fund set aside for unexpected expenses. Experts recommend having at least three months of standard living expenses saved so you will be able to comfortably survive any unplanned scenarios. If you already have $5000 in your checking account, consider transferring some or all of it into a savings account to save in case of emergency. You will feel good knowing that the cash is there when unexpected expenses pop up. 

Consider Investments

Now that you have a little bit of extra cash, it may be a good time to consider investing it and making it grow even more. Look into long-term, safe investments like government bonds or try purchasing some stocks that may have faster returns. You can always consult a professional advisor to help you put your money in the right place. Investing can be fun and exciting but always remember that it is not guaranteed. 

Check Your Budget

If you have a good amount of cash in your checking account, you may want to reconsider your budget. Review your budget and make sure your spending and savings are balanced. It is a good idea to save at least a little bit every single month, but don’t be afraid to spend as well! You work hard for your money, and you deserve to spend it every now and then. 

Make a Big Purchase

Have you been wanting to buy a nice new TV? Or maybe you need a new oven to help you cook delicious meals. If you have over $5000 in your checking account, it may be time to make that big purchase you have been waiting for. Spend the money wisely, making sure you don’t go into debt when making your big purchases. Always try to keep a little bit in your account so you don’t struggle with money later on. 

Make a Donation

There are thousands of charities out there that could use a portion of your money to make some big changes in the world. Consider donating some of your money to your favorite charity and help make an impact. Charitable donations can also be tax-deductible, providing potential financial benefits for you as well. Donating your money will feel good and do a lot more good than if it was just sitting in your checking account! 

Home Upgrades

Look around your home and see if it needs any upgrades. When you have spare cash sitting in your checking account, it may be the perfect time to improve your home. Consider making past-due repairs or upgrades that may potentially increase your home’s value. Anything from landscaping to a new couch may be a good idea! 

Invest in Yourself

Now is a fantastic time to put a little money into personal development. Use some of the money in your checking account to take courses, get certain certifications, or just buy books that can improve your skills. Not only is it fun and beneficial to continue your education, but it may also increase your earning potential. Investing in yourself is always a good idea. 

Start A College Fund

If you have young children, you need to start putting money away for their future education right away. College is very expensive, and it can take years to save enough money to pay for higher education. If you have some extra money in your checking account, you should consider putting it into a college savings plan. It is never too early to start preparing for your children’s future! 

Take a Vacation

You worked hard for that money in your checking account, so why not enjoy it? Everyone deserves to go on a vacation every now and then. You need to escape reality and recharge to stay focused and happy in your everyday life. Plan a trip and take a much-needed vacation. Try not to spend all your money, as you will need to check back into reality eventually! 

Start a Health Savings Account

Check if you are eligible to open a Health Savings Account (HSA) to start saving for future medical expenses. The money you put into your HSA is untaxed, which will reduce your taxable income and help you pay less in taxes at the end of the year. This money can be used anytime to cover healthcare costs. An HSA can be a lifesaver when unexpected medical bills pop up! 

Pay Down High-Interest Debt

If you have any high-interest debt, now is the time to pay it off or at least try to lower the principal a little bit. High-interest debt will cost you a lot, especially if you hold on to it for years and years. You don’t want to be paying those lofty interest payments forever! If you have extra cash in your bank account, it is a good idea to put some of that money toward paying off your debt and decreasing your interest payments.

Buy Land

While $5,000 may not seem like much when it comes to purchasing real estate, it may be enough to help you get started toward buying a home or at least some land. You can likely find a small parcel of land in an area you love that you can purchase and hold on to until you are ready to build a dream home. Land will never go bad or expire so you can hold on to that piece of property as long as you need to! $5,000 will at least give you a nice down payment and a plan for the future.