What is the smartest thing to do with 10 000 dollars?

Key Takeaways. Using $10,000 in savings to invest or pay down debt is a financially savvy decision. A few of the best investment options include increasing your 401(k) contribution and opening an IRA or 529. Using your savings to make additional payments on your mortgage may make financial sense.

investopedia.com - Smartest Things to Do With $10,000 of Savings - Investopedia

What triggers a broom?

10: Trigger's Broom In this classic scene, Trigger claims that he's had his road sweeper's broom for 20 years. But then he adds that the broom has...

Last updated Apr 15, 2018

What was left in the Ark of the Covenant?

The Ark of the Covenant is a gold-plated wooden chest that, in Jewish and Christian tradition, houses the two tablets bearing the Ten Commandments...

Last updated Dec 20, 2021

Awaken your dormant DNA ability to attract wealth effortlessly

Promotion

Saving $10,000 is a wonderful accomplishment but it's critical to put that hard-earned cash to good use. With $10,000 in savings, there are many things you could do, but here are five safe and wise ways to allocate your cash. Key Takeaways Using $10,000 in savings to invest or pay down debt is a financially savvy decision. A few of the best investment options include increasing your 401(k) contribution and opening an IRA or 529. Using your savings to make additional payments on your mortgage may make financial sense. In many cases, paying down high-interest debt should be the highest priority, as the rate charged is usually higher than any return you’ll generate from investing.

Consider opening a 529 with $10,000 for your children or grandchildren.

2:01 What Would You Do With $10,000?

Boost 401(k) Savings

Using $10,000 in savings to increase your 401(k) savings is a great idea, especially if your employer matches contributions. Say your employer matches your contributions up to 5% of your pay, but you're currently only contributing 3%. In that case, you're essentially forfeiting 2% of your monthly salary. Consider increasing your contributions to the company match level. The 2022 contribution limit on 401(k) plans is $20,500—the catch-up contribution those age 50 and over can add is $6,500, for a total of $27,000. In 2023, the limit goes up to $22,500, plus the additional catch-up rises to $7,500, which means if you are age 50 or older, you could put away $30,000. The benefits—returns, tax deductions, or otherwise—you’ll get from investing or paying debt generally outweigh the return offered from savings accounts, although the decision must be balanced with the benefits of financial security.

Open an Individual Retirement Account (IRA)

There are two options for individual retirement accounts (IRAs)—traditional and Roth. The main difference is the tax treatment of contributions and withdrawals. You can write off contributions on your taxes each year with a traditional IRA, but your withdrawals are taxed during retirement. With a Roth IRA, you contribute after-tax dollars but pay no taxes on withdrawals. Make sure you check out the Internal Revenue Service (IRS) website for a complete list of restrictions, penalties, and other terms. For 2023, the contribution limit rises from 2022 for both IRAs—$6,500, or $7,500 for those 50 and older.

Start a College Fund

You may also want to take your nest egg and invest it in your child's college fund. Your best bet is a 529 plan. The cost of college continues to rise, and anything you can do to help pay for these expenses can help your children decrease their reliance on student loans. Notably, 529 contributions are not deductible on federal taxes, but they might be deductible on your state income tax return, depending on where you live. You can use money from your 529 plan to pay for your child's annual tuition up to $10,000 each year at a public, private, or religious school for K to 12 education. 529 plans can also be used to pay for the costs of a beneficiary's apprenticeship program, as well as a lifetime maximum of $10,000 to pay down a qualified education loan.

How much is 1k view Worth on YouTube?

With the average YouTube pay rate hovering between $0.01 and $0.03 for an ad view, a YouTuber can make around $18 per 1,000 ad views, which comes...

Last updated Jun 29, 2021

Can dogs have pineapple?

Many of the nutrients in pineapple can help support your dog's immune system and are good for digestive health, according to the American Kennel...

Last updated Aug 21, 2020

Awaken your dormant DNA ability to attract wealth effortlessly

The simple yet scientifically proven Wealth DNA method laid out in the report allows you to effortlessly start attracting the wealth and abundance you deserve.

Learn More »

Promotion

One of the key benefits of investing more of your money in your 401(k), IRA, or in a 529 is that you're effectively investing in the stock market. While it is riskier than your checking or savings account, you can expect to get a much better return on investment (ROI) over time. From 1926 through 2020 (the most recent figure as of November 2021), the average annual return of the S&P 500 was around 12% (not adjusted for inflation), which easily tops most savings accounts. Gains on money invested in 529 plans are tax-free, as are withdrawals when used for college or educational purposes.

Increase Your Mortgage Payments

Say you're 10 years into a $200,000, 30-year fixed mortgage at 6%. Increasing your monthly payment by just $100 could save nearly $19,000 over the life of the loan, and you'll pay off your mortgage almost three years earlier. In many cases, the rate on your mortgage, with the current average 30-year fixed mortgage rate being around 3%, is higher than savings account rates.

Pay Down Debt

Using some of your $10,000 in savings to pay off high-interest credit card or other loan debt is usually the best first step. That’s because the high-interest rates charged on most credit cards and consumer loans mean you’re effectively losing money. That is, the money you’d make investing that $10,000 in savings into an investment account or savings account would be less than the interest charged on your debt. Putting extra money toward paying down high-interest debt is financially savvy, assuming you have your emergency fund funded.

The Bottom Line

Now that you've worked hard to save $10,000, it's time to get your money working for you. Research all fees and expenses that may come with any investment you choose, as some fees can take a chunk out of your investment over the long-term—you don't want your investment efforts to have an adverse effect on your savings.

investopedia.com - Smartest Things to Do With $10,000 of Savings - Investopedia

What are the top 10 ways to become a millionaire?

Here are the Top 10 keys to your financial success: Decide to be financially successful. This is different than wishing, hoping, wanting or even...

Last updated Mar 28, 2022

Which zodiac is likely to be rich?

Because of their perseverance and great investments, Virgo is most likely to become a millionaire. Mar 3, 2022

Last updated Sep 4, 2019

Promotion

What color represents positivity?

Yellow Yellow. Yellow symbolizes happiness and warmth in almost all cultures. It's the color that grabs users' attention more than any other color....

Last updated Dec 25, 2018

Awaken your dormant DNA ability to attract wealth effortlessly

The simple yet scientifically proven Wealth DNA method laid out in the report allows you to effortlessly start attracting the wealth and abundance you deserve.

Learn More »

Promotion

Can dogs eat yogurt?

Can most dogs eat yogurt? Yes, but that doesn't necessarily mean that they should. While yogurt is not toxic to dogs, many canines might have...

Last updated Aug 27, 2018