I’ve promoted online savings accounts here many times and I will continue to do so. Last month I asked you guys what you thought was the best online banking account for 20-somethings? However, due to the recession, the rates are low across the board. Translation: online savings accounts rates suck. There’s no way to sugarcoat this. Some of us are stressing over this. Others just see it as a part of life that we can’t really control.
What can you do if you’re not happy with crappy interest rates at online banking accounts? You can complain. You can call your friends to moan about savings rates. When you’re done you can do something proactive. A few money moves that are better than a online savings account right now:
1. Pay down debt.
Perhaps the interest rate on your debt is higher than what your money can earn sitting in a savings account. This is a good reason to focus on paying down your debt. Plus paying down debt can be a major psychological boost to get you motivated to take your finances seriously. Being in debt can be miserable at times. There’s no better way to alleviate this misery than to start hacking away at your debt. Working towards becoming debt-free is a better option than low savings rates.
2. Invest in your retirement.
Saving for retirement in your 20s isn’t the juiciest topic. However, you don’t want to be struggling to get by when you’re 70 years old. Instead of putting your savings towards an account that pays you very little interest, you can get your money into a registered retirement account and have compound interest working on your side. Do you know where your retirement income will come from? If you don’t then this is the best time to get started.
3. Take some risks.
I’m not going to suggest that you become a drug dealer or take part in a pyramid scheme, but there are many chances that you can take with your money in your 20s. I personally have taken many chances with the stock market. I’m not going to start promoting certain stocks here on Studenomics. I just want you guys to consider thinking a little outside-the-box when it comes to your money in your 20s. With a steady income, strong work ethic and a solid skill set, you can always make your money back.
4. Invest in your side business.
I’m a monster fan of investing in yourself. You can take your savings and use them to invest in your side hustle. Last year I invested a few hundred dollars into the Earn1K program offered through IWTYTBR. I had always been skeptical of any online courses/eBooks/offers. On the other hand I really wanted to increase my side income. I figured that instead of having my money sit around in a savings account earning a few bucks, I could leverage a piece of this money to increase my income. This ended up turning into an exceptional decision. How can you invest money into your side hustle?
What have you done to combat low savings rates?