Pay down credit card debt
With student debt crossed off the list, the next logical step would be to prioritize paying off any other high-interest loans you’re carrying.
With inflation driving up the cost of everyday items, many Americans have been relying more on their credit cards to get by. Total household debt hit $16.51 trillion in the third quarter of 2022, according to the New York Fed — and credit card balances are increasing at their fastest pace in more than 20 years.
But so are interest rates. Credit card rates are now at their highest level on record, as lenders respond to recent Fed rate hikes.
Which means the interest you accrue from carrying a balance on your card is getting even more expensive. Clearing that debt sooner will help you avoid adding even more interest to your pile, and free up room for fun spending down the line.
Personal loans to get you one step ahead
Beef up your emergency fund
Once you’re back in the black, it’s time to make sure you’re ready the next time a surprise expense comes your way. Putting your spare cash toward some rainy day savings — especially in a volatile economy — can help protect you next time an emergency strikes, like a job loss or unexpected home repair.
Consider opening a high-yield savings account or a money market account. Just make sure it’s easy and convenient to withdraw money in a hurry.
That said, you’ll also want to practice some self-discipline, since this isn’t an account that you should dip into on a whim.
The general rule of thumb is to keep three to six months’ worth of expenses tucked away in your emergency fund — although personal finance personality Suze Orman recently revised her advice to 12 months in order to prepare for a potential recession.
Invest in the stock market
If all your pressing needs are taken care of, you might consider growing your money by investing it. That’s what 43% of respondents in the Intelligent.com survey plan to do.
Starting to invest early — even with small dollar amounts at a time — means you’ll get the benefit of compound interest, which will maximizing your growth over the long term.
Some investors may be scared off by the shaky stock market or fears of an upcoming recession, but many experts say now’s a good time as any to buy. When you’re investing for the future, this allows you to pick up stocks with long-term value while shares are cheap.
Look to diversify your portfolio with sectors that traditionally perform well throughout economic cycles, like health care, utilities and consumer staples.
What's best way to use a personal loan?
A personal loan can be used to consolidate debt, take a much-needed vacation or complete that home improvement project.
With Credible, get a personal loan quote from vetted lenders in minutes - for free. There are no hidden fees and you can get prequalified in just three minutes.
Don’t let a lack of cash hold you back.