If saving money for a new truck, boat or a major renovation project is one of your financial goals, you’re not alone. We’ve got some ideas to help you achieve your goals without disrupting the rest of your financial plan.
Plan ahead to avoid debt
Saving $100 per month is only $3.33 per day, and there are lots of ways to squeeze out those dollars. Create a budget and review to see if you’re overspending in one or more areas. Pack your lunch instead of buying. See if you can negotiate a better rate on your cell phone or cable plan. It takes time, but it takes a lot less time than paying off a big debt at a high interest rate.
What Homestead Funds account type is right for you?
There are many types of investment accounts. For a big-ticket item, the best choice is typically an individual or jointly owned taxable account. Investment accounts aren’t guaranteed the way bank accounts are, but they might provide comparable or possibly better rates of return. Your savings can grow even faster when you earn interest on the money you set aside.
Account types appropriate for this goal:
Choose your investment type
It’s important to select investment types that align with your investment goals and time horizon. Equities carry a higher degree of risk (meaning they are more volatile), but historically have delivered higher long-term returns. As time goes on, you’ll want to consider an asset mix with fewer equities and more fixed-income funds. Homestead Funds offers funds across these categories to help meet your investment needs.
Related Resources:
Debt securities are subject to interest rate risk, credit risk, extension risk, income risk, issuer risk and market risk. The value of U.S. government securities can decrease due to, among other factors, changes in interest rates or changes to the financial condition or credit rating of the U.S. government. Investments in asset-backed and mortgage-backed securities are also subject to prepayment risk as well as increased susceptibility to adverse economic developments. High-yield, lower-rated, securities involve greater risk than higher-rated securities.
Equity securities generally have greater price volatility than fixed-income securities. The market price of equity securities may go up or down, sometimes rapidly or unpredictably. Equity securities may decline in value due to factors affecting the issuer or equity securities markets generally.
Homestead Funds does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance.
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