Here are 4 steps I would take to balance saving and investing for financial growth:
1) Auto-save for emergencies
Auto-save for emergencies in an online-only, bank account like Ally Bank. Your emergency fund should be slightly out of reach. Online only accounts take 2-5 business days to transfer money back to your regular account. This will eliminate impulse buying.
2) Decide how much emergency money you need.
How much emergency money do you need? 3-months to 2-years depending on the industry you’re in and how long you think it would take you to replace your income should you lose your job.
3) Divert your funds
Once your emergency account is fully funded. Divert the money you were auto saving to that account to an investment account.
4) Continue to pay down all debts.
Remember, as long as the interest you earn while investing is greater than the interest rates on your debts, you’re making money.
I hope these tips help you successfully save and invest in your financial future!
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