Money is the root of all evil. Or, so they say. At the very least, it’s a root of many different problems for many different people.
Money is the root of all evil. Or, so they say. At the very least, it’s a root of many different problems for many different people. You either have too much of it, or too little. There are plenty of articles on the internet, and indeed this site, that can help you with the latter. This time, we’re going to explore the former. Have some money burning a hole in your pocket? Well, first of all, I don’t care to admit that I’m a little envious. And while it’s certainly a nice problem to have, it’s one that can leave you confused as to what to do with it.
Pay Off Your Mortgage
A question that is often on the minds of people with cash to burn is whether it’s worth paying off a chunk of your mortgage. The answer is even less simple than the question, however. To put it simply, it all depends on your contract. You’ll have to look at the finite details of your mortgage agreement to come to any definitive conclusion. Some lenders insert clauses into their contracts that actually penalizes overpaying. So, while it may make sense to beat the interest rates as early as possible, it could actually prove to be a waste of time and money.
Pay Into Your Pension
If you’re a career woman, you likely already have a pension plan put into place. Good job. You have something to fall back on when you reach retirement age. Not everyone has the same foresight, so give yourself a pat on the back. It certainly wouldn’t hurt, though, to put a little more in the money pot. There is nothing stopping you from actually paying more into your pension than you need. And it could be a smart way to make sure your life after work is, even more, comfortable.
Put It Into Savings
A good rule of thumb is to have three to six months worth of living expenses saved up just in case. Imagine this scenario. You lose your job tomorrow. What happens? There’s no guarantee you’ll land yourself straight back into work. Can you afford to pay for your home, your kids, your food, and your bills? Probably not. Having something to fall back on is absolutely imperative. Once you hit the six-month threshold, what then? A good option is a cash ISA, which offers you flexibility unlike your pension plan. It leaves you with total control of your money should you need to withdraw it early.