Invest, Save, or Spend?

I started working my sophomore year of college. After receiving my first few paychecks, I was met with several options on managing my finances. I researched CDs, savings accounts, and brokerage accounts and decided on a combination of financial instruments to manage my money. Here are some of the financial decisions I made to ensure the best results. 

CD or Savings Account?

CDs and savings accounts are two ways to grow your money risk-free, and each method has its regulations. Most CDs require a minimum amount of money to open, and do not allow withdrawals for a specific amount of time, without payment of a fee. Even though CDs have the highest interest rates, this option was not the most ideal for me without a traditional savings account on the side to make withdrawals freely. Savings accounts tend to have lower interest rates than CDs, and allow withdrawals whenever, so I decided to choose this option. 

Brokerage Accounts

Brokerage accounts allow individuals to multiply their money faster and at higher rates depending on experience and strategy, but are met with general stock market risk that is highly variable. I invested some of my money into the stock market as a learning opportunity and maintained a diversified portfolio of index funds and individual stocks as well to reduce risk.  

Debit or Credit Cards?

After setting up my savings accounts, I was deciding between a sole debit card or the combination of a debit and credit card. I was particular about building credit, and realized that a credit card would also allow me to budget based on my credit limit and earn cashback. In order to make every payment on time, I set up automated payments at the earliest date, and also made sure to have sufficient funds in my savings account that was always more than my credit limit so I could pay it off fully every single time. 

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