A newborn baby, a new car, and a vacation are all amazing things in life but none come close to the joy you feel when you are given a tax refund. The payment feels like you have been handed free money by the government as they whisper in your ear “go have some fun”. Your mind instantly starts to wander of the possibilities you could spend it on; 1,000 burritos, a slide for your bedroom, an ice cream truck, the options are limitless (actually limited to how much you receive but don’t be a spoilsport). However, if you are being sensible and thinking about your future then you know that buying 1,000 burritos is a bad idea and that you should invest that money.
Long term savings account
If you are going to be sensible at least be smart. Don’t put that money in your current savings account and watch it grow at a measly interest rate that is lower than the current rate of inflation. Put your savings in a long term savings account and you will be rewarded for keeping your money in the account for a long period with a higher interest rate.
You can go one step further and commit to leaving your money with a bank for a certain amount of years and they will reward you with even higher interest rates.
If you have a retirement fund and it is not looking so healthy it may be a good idea to give it a quick injection to help it along. Doing this could see your compound interest rates take a nice jump.
If your retirement fund is on track and you already own an ice cream truck then consider investing your money. Do your homework before investing because there are always more losers than winners in the money markets. Don’t be a loser. If you don’t know what you are doing then the ice cream truck is less of a risk.