Extra monies, what do I do with them?

Andorien

So for awhile now I've had a bit of excess cash in my savings account of slightly over 7k (in addition to ~5k in the checking account). However, I feel like that account really isn't doing much of anything for me at the moment, as I only earn about ~$2 interest a month.

I would like to invest it in some fashion, or at least do something better than it is now, but I don't really know shit about how to go about doing that. The only investing I've ever done is put away 10% a month into my retirement account (and I must say it's fun watching the numbers slowly go up).

Help me get my monocle on!

illig

You need to specify your time horizon, and any need to be liquid, as well as your level of acceptable risk.

I.e. if you would be in trouble financially if you should lose this money, and you are looking to replace your car or put a downpayment on a house in a few months, then keep it where it is.

If you dont need it right away, and would like to bolster your retirement savings, a Roth IRA may be a good choice.

If its somewhere between the two, playing the stock market may be a good choice. Just be aware that stocks go down as well as up...

OnTheLastCastle

If you want a quick, no risk low return investment you can do CDs at your bank. They have variable time periods so you know exactly how long the money will be unavailable.

WildEEP

IRA's are a good deal right now.

New tax code says you can get one on last years tax season up until the file date Apr 18. Thats a 2K tax deduction. Just head to the bank and tell them you want an IRA for 2010.
Then say thankyou, turn around, hand them another 2K and say you want to make a deposit on your IRA for 2011.

Double rebate.

Spawnbroker

Correct me if I'm wrong here, but one of the things I've heard about saving is first, if you have any kind of outstanding debt, like credit cards or student loans, it's better to put that money towards paying those off than investing it. The interest on loans, etc. is much higher than any sort of savings you can put that money in, so it's better to start paying them off as soon as you can.

If you don't have anything like that, then go for it!

Bowen

Yeah knowing the liquidity is important here. If you wanted to buy a house in a few years, it's better to keep it where it is.

RadicalTurnip

Spawnbroker wrote: »

Correct me if I'm wrong here, but one of the things I've heard about saving is first, if you have any kind of outstanding debt, like credit cards or student loans, it's better to put that money towards paying those off than investing it. The interest on loans, etc. is much higher than any sort of savings you can put that money in, so it's better to start paying them off as soon as you can.

If you don't have anything like that, then go for it!

Definitely this. If you have debt, pay it off.

Heir

Does the ~7k in savings include 6 months worth of living expenses? You should always make sure you have up to 6 months of living expenses saved up in case you lose your job or something else catastrophic happens.

spool32

RadicalTurnip wrote: »

Spawnbroker wrote: »

Correct me if I'm wrong here, but one of the things I've heard about saving is first, if you have any kind of outstanding debt, like credit cards or student loans, it's better to put that money towards paying those off than investing it. The interest on loans, etc. is much higher than any sort of savings you can put that money in, so it's better to start paying them off as soon as you can.

If you don't have anything like that, then go for it!

Definitely this. If you have debt, pay it off.

Yes. Debt free first!