The U.S. Personal Savings rate is still very high. Many people find they don’t have much to spend their money on, with travel and entertainment curtailed. If you are one of those fortunate people, wondering where to put your excess cash, we have a few ideas.
· First, your priority should always be tax-free or tax-deferred accounts. Retirement accounts and 529 college savings accounts are examples of these.
· Next, pay down your credit cards if you have a balance.
· If you need to top up your rainy-day account (3-6 months’ worth of spending in a savings account), now is a good time.
· Don’t pre-pay your mortgage – you could refinance, though, since rates are still low.
If you find that your income has been variable during the pandemic, that is a good reason to save extra cash to have on hand. We would suggest keeping your rainy day fund topped up in case you encounter further variability during the months ahead.