To be honest, I’m not surprised.
With all the Jim Cramers, Suze Ormans, and CNBCs out there, I totally understand why people are unsure about where they should put their money. The mass media will try hard to confuse you in hopes that you’ll go after the next “best thing.”
That’s the worst thing you could do.
I mean, after all, you did work hard to budget and save this money, so you should be smart about where you invest it, right?
I have compiled a 10 item list in the order of where you should put your money first:
Top 10 Places to Put Your Money
1. Pay off all high interest debt before doing anything else.
This is in reference to high interest credit cards. Destroy your debt! Remove it from your vocabulary!
2. Fully invest in your employer’s 401(k) program.
You can’t beat free money if they match you to a certain percentage.
3. Create an emergency fund for at least 4 months.
This is to cover your butt in times of crisis such as periods of unemployment, car repairs, and unexpected travel expenses.
4. Fully fund your ROTH-IRA.
I recommend Vanguard for this.
5. Open a taxable discount-brokerage account and purchase ETFs
6. Ensure that you have above average coverage for health/dental/disability/life insurance.
7. Pay down low-interest loans such as cars and school loans.
The sooner you can stop paying interest on a loan, the better!
8. Start a separate savings account for a down payment on a house.
Read more about why your should own instead of renting your home.
9. Pay down your mortgage.
10. Save for future children.
Kids are (really) expensive, so start planning now!
Tell Me If You Agree!
If you disagree with my order, please comment below and put this list in a different order. I’d love to hear another person’s opinion on this!