Moolah Blog!

Mayra, good friend of mine brought up a good point when we were talking a few days back about how someone like herself might be able to put her money to good use if she could bring herself to not spending it. In this article I’ll explain a few good ways to Not spend your money but instead earn some good interest while holding it!

So, if you find yourself, as student, having scholarship money or financial aid money that you could potentially use to pay off a full or half a year’s worth of rent, I would suggest not paying everything upfront, even if you have the habit of spending money and not organizing your finances. Instead, why not put that money into a high yielding income earning account? Here is a scenario:

John has 6,000.00 from scholarship and grants left over after paying tuition and fees. What is he to do what that money? Here are a few options:

1. He could use that money to pay down 6,000 dollars in rent that would cover him for…oh lets say 12 months! Whoa! No need to worry about rent while I’m in school right?
2. He could pay rent for six months and save the 3,000.00 by putting it into a 5-6 month CD or just by putting it into a high yielding account altogether (Let consider current highest online savings account yield).

As you might have guessed, I would have to advice option 2 for many reasons. Now, if you saved $3000.00 into the highest savings online yielding account with a balance bellow $10,000.00 you would potentially have $99.00 dollars at 3.54% after 6 months at Washington Mutual Bank!

Now, suppose instead of a savings account you wanted to protect that money from you spending it! What to do? You could put that money away into the highest yielding Certificate of Deposit (CD)! What would the numbers be then? You would put $3000.00 into a 6-month CD and wait! Here is the BIG difference … you would have made $106.20 as oppose to 99 bucks!

You may not see that as much but if you know you will be putting that money straight into someone else’s pocket at some point, why not at least let it earn you some interest safely, right!? Plus, it helps you not to spend it and it pays in then end for doing the right thing!