Welcome to Ask Clark, a column designed to answer your financial questions, by money expert Clark Howard.
To Pay Off Debt, We Sold Our Home and Moved Into a Camper. How Can We Make the $2,300 We Now Have in Savings Grow?
Jennifer from Mississippi asks: “Four months ago my husband and I sold our house. We moved into a camper. Our goal in doing this was to use the money earned from the sale to pay off our debts. We have all but one debt now paid in full, all that’s remaining is a $14,000 doctor bill. I’ll be doubling up on this to have it paid off ASAP.
“Also for the first time ever, we’re in a position to really focus on saving more money. We have $2,300 in savings now, which for us is a lot. My question is this: What can we do to grow this money? I want to have a nice nest egg when we decide to purchase another home.”
Clark’s Take on Growing Your Savings vs. Investing
While people can typically increase their wealth by investing their money, Clark says in this case, saving that cash makes the most financial sense.
Clark says: “For what you’re trying to do next — build that reserve so that you can have the down payment for your next house — you cannot invest that money, it can only be saved. Because when you invest, you may find that the money is at risk. The market may take a bad turn and you’ll lose a lot of that money that you’ve worked so hard to build up. … so slow and steady and dull wins this race.”
“A simple savings account with an online bank is the right thing for you to do,” he adds. “You won’t earn a lot of interest, but your money will be fully safe.”
To find a high-interest savings account, check out Clark.com’s choices for the best online banks.
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