4 Smart Money Moves You Can Make Right Now

Like canned goods or toilet paper, Americans are stockpiling their money as a result of the coronavirus pandemic. 

As of April, 2020, Americans are saving 33% of their disposable income, a record percentage. This savings rate surpassed the previous record, which was 17.3% in May, 1975. At the same time, Americans are spending less than they did before the pandemic, likely because of stay-at-home orders in place in many states. Spending decreased by 13.6% in April, another record. 

If you’ve found yourself saving more money than you usually do, sign up for Stash, an app that can help you maximize your savings and improve your financial situation in the long term. With Stash, you can try these four suggestions to make the most of your savings. 

1. Create a partition for emergency savings

If you’ve already created a budget, Stash can help you stay on track. When you open a Stash account and deposit money into that account, you’ll be able to create partitions within your account for different saving¹ and expense goals. For example, you can create a partition for bills, one for groceries, and one for short-term savings.

Now is the perfect time to put extra money into an emergency fund, if you have extra funds. Ideally, your emergency fund should contain enough money to cover your expenses for three to six months, should you hit an unexpected financial roadblock such as a layoff. You can create a partition for an emergency fund in your Stash account and automatically put part of your paycheck into that partition once you set up direct deposit with Stash.

2. Consider investing small amounts or increasing your usual amount

Maybe you’ve never been able to make room for investing in your budget. You might want to start investing if you’ve found yourself with extra savings. You can start by investing just a little piece of your savings each month. 

Apps such as Stash allow you to invest small amount of money² and buy fractional shares, or portions of shares in stocks and exchange-traded funds (ETFs). You can also use Recurring Transactions to set up regular investments. If you’re already investing, you might want to increase your regular investments if you’re able.

3. Spend with a card that earns rewards

Even if you’re spending less during the pandemic than you were before, you’re probably still spending on essentials and a streaming service or two. Another way you can maximize your savings is by using a credit or debit card that offers rewards. When you sign up for Stash, you receive a debit card that earns rewards³. With that debit card, you can earn Stock-Back® rewards⁴. If you’re enrolled in Stash’s Stock-Back program, you can get rewards in the form of fractional shares of stock, on us⁵, wherever you spend⁶. 

Stash may also choose a handful of merchants for you to earn extra Stock-Back⁷. All those lattes you get at Starbucks, munchkins from Dunkin, or even your monthly Netflix subscription—could be eligible for a Stock-Back bonus between 1% and 5% of your purchase, subject to terms and conditions.

If you opt-in to Stock-Back and swipe or pay with your Stash debit card when you buy at those merchants, and we’ll deposit the bonus in your Invest account⁵. And there’s no additional enrollment needed for the Stock-Back bonuses.

Of course, stocks aren’t risk-free investments. Your stock can lose value, just as it can appreciate in value. It’s always smart to diversify with a mixture of investments, including stocks, bonds, and other securities in various sectors, industries, and geographies. With Stock-Back you can diversify your portfolio and invest regularly.

4. Consider Increasing your retirement contributions

Think about starting to build retirement savings now if you haven’t yet. There are two main types of retirement accounts: 401(k)s and individual retirement accounts (IRAs). A 401(k) is an employer-provided retirement account that allows you to contribute pre-tax earnings to retirement. Some employers even match your contributions. 

An IRA is a type of account that anyone can set up. With a Traditional IRA, you can make contributions on a pre-tax basis. With a Roth IRA, you can make contributions after taxes. Stash offers both Roth and Traditional IRAs, which only require a $0.01 balance to get started.⁸

If you already have retirement accounts, you probably also already make regular contributions to those accounts. Consider increasing those regular contributions, especially if your employer will match contributions. 

Keep in mind that there’s a limit to how much you can contribute to your retirement accounts per year. In 2020, you can contribute up to $19,500 to a 401(k) and $6,000 to an IRA. If you’re older than 50, you can make catch-up contributions, up to $7,000 into an IRA or $26,000 into a 401(k).

However you decide to manage your money during this time of uncertainty, it’s important to prioritize your financial wellbeing and security. These strategies can help you make the most of your savings for the long-term.