Do you have extra cash and are wondering whether you should save it, pay off debt, or invest it? Maximizing the use of excess cash is a balancing act, where the answer is different in every situation. This article breaks down how to prioritize debt paydown, and how holding too much cash may be hurting you more than it’s helping you.
When deciding how to invest, you must always consider whether the money needs to be accessible at any point in the near future. This will tell you the type of investment vehicle the money should be contributed to, as well as the current and future tax effects of that contribution. As far as whether to invest in general, putting your money to work for you will always be beneficial. Time in the market always trumps timing the market.