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So you saved a little money over the past year. What now?

Unequal economic recovery in the United States is a severe result of epidemic and systemic inequality. Millions of Americans remain unemployed, the systems we have to help many of them fail. But if you look, for some there is a silver coating. More Americans have been able to save money and pay off debt because nationwide blockades mean less travel, less entertainment, and less food.

For those who are happy to be in such a position, it is possible for the first time, the next question is the following. What should I do with it, especially when life returns to “normal”?

“Money is like math, because there’s a good way to keep getting the answer right with your personal finances in the long run,” said Brian Preston, certified accountant on the YouTube channel The Money Guy Show.

“This is the best time in history for a man who is only lying down for a few thousand dollars.”

The great secret to being good at money is that there are only a handful of things you really need to know.

“Learn the basics,” said Tiffany Aliche, author of The Budgetnista and Լավ Be Good with Money. “In a world obsessed with bitcoin, shorting and trading options, the financial foundations often change.”

He added. “The basics ensure that you have a soft spot to land in difficult times and a solid place to build in times of need.”

Here are some ideas for starting that financial education if you were lucky enough to steal a little more money in a way that works for the average American. (Meaning. If you’re reading this article, you probably do.)

STEP 1:: Create an emergency fund

First, strengthen your finances to make sure you are prepared for disaster. Even before paying off a high-interest credit card debt or repaying a student loan, if you have been able to raise some cash over the past year, your outflow fund is, in your opinion, your top priority, according to experts.

“You have to have enough to keep your financial life out of the trenches,” Preston said, advising people to raise enough money to live for a few months to cover health care costs.

The founder of his first $ 100K financial advisory blog, Tori Dunlap, agrees.

“I get one of the most common questions: ‘Should I save first or pay off the debt first?’ If this year has taught us anything, we need to save the emergency fund. So even if you owe a good chunk of your debt, prioritize saving for three months’ living first, ”Dunlap said, adding that this year he used the surplus to increase his one-year emergency fund to one year.

And where should you put that money? A high-yield savings account like the one offered by many online banks, including Ally or Marcus. (A high-yield savings account is one that offers higher interest rates than regular banks. But don’t expect to make a lot of money.)

STEP 2:: Solve high interest rate debt

This is not the most magical way, but it is the way to provide the highest possible returns. After putting your emergency fund at a comfortable level, spend about six months, give or take, and consider any extra money you can save on debt at an interest rate of about% 6%, experts say.

Borrowing at a high interest rate makes the magic of complicated interest rates work against you. The more you save in a savings account, the more interest you earn, but in the case of high interest rate debt, the more money you owe, the more interest you owe.

“You have to be very aggressive about high-interest debt, because the problem with high-interest debt is that you have to turn a complex interest rate into a force to be reckoned with,” Preston said. It is not uncommon for credit card companies to charge 16% to 18%.

STEP 3:: What to do if there is still some time left?

If a little cash stays that way at this point, a lot of options open up.

The best explanation for how to deal with money that I have ever encountered is the section on “Personal Finance”. In a simple, unambiguous way, it shows you what to do with your money, depending on where your finances are, and how to plan your next steps. It generally reflects what a good book on the subject will tell you – what most advisers recommend.

You may be wondering, considering all the recent coverage of ‘meme stocks’, such as GameStop և AMC, whether you should invest in individual stocks. From time to time, all the data show that investing in low-cost index funds is the safest way to become financially independent. It is not the most exciting way to invest, but it is the most reliable in the long run. (Said: If you want to gamble a few dollars, you will lose well, do it. Just never gamble more than you normally lose).

If you do, you may want to consider donating to people affected by the epidemic.

STEP 4:: Maybe just have fun with your excess

Erin Lowry, author of The Broken Millennium Talks Money, said she and her husband have been able to save a fortune over the past year as social events such as weddings and international travel have been canceled. They used that extra money to buy big cars.

“It was really an emotional decision based on the feeling that we were at the height of the New York epidemic, that when it all opened up, it didn’t seem like we had a safe way to visit relatives,” he said. “It was a wise decision in several ways, but a decision we knew we could recall by selling the car.”

Preston said that if you can achieve the promising goal of saving 20% ​​of your gross income in the future, “go have fun.”

“There is a balance between being very good with your money and having a lot of fun with your money,” he said.

Winnie the Pooh, CEO of Sun Group Wealth Partners and host of “Level Up with Winnie Sun”, suggested remembering another wisdom. Last year was difficult for all of us, so you’s fine, though.

“One piece of advice I would give to someone who manages their personal finances in 2021 is to be kind to yourself,” Sun said. “Do not beat yourself up if you can not invest so much, save so much in your emergency fund or solve those financial goals, because circumstances may be out of your control.”

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