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What to do with Extra Savings


Everybody should have a healthy savings account. The general rule is to have three to six months of living expenses saved up in your savings account. This fund is in case of emergencies such as losing your income or needing to pay your bills for awhile.

You should set your own savings goal to cover your expenses, but what do you do once you've hit that savings goal? You have three, six, or twelve months of savings squirreled away, but still have money coming in. We’ve got some ideas to get the most from your extra savings.

Put it in your Retirement Fund

two old woman looking at a phoneDo you have a retirement fund? If not, it’s time to open one. Whether it’s through your employer or a personal IRA, planning for your retirement is very important. The older you get, the more urgent building a retirement fund should be.

If you have extra savings, put them into your retirement fund so it can start earning you more money. The larger the principle in your account (the money you put in) the bigger return you’ll see. You could put the money in by pulling directly from your paycheck or do it as individual contributions when you have some extra money. 

If you are looking for a place to help with retirement, Pioneer’s IRAs are for you! They are easy to open and convenient to contribute to.

Put it Towards a Goal or Big Purchase

man sitting on a cliff looking over some waterDo you have a big vacation, big purchase, or other significant expense coming your way in a year or two? Rather than just pulling from your general savings, start a dedicated fund for it and put your extra savings towards that. Not only will these keep your emergency savings secure, it will help you stick to a budget for your vacation.

A great way to reach this goal is to put aside a set amount of money each month so it’s a regular thing. Don’t wait for the end of the month to see how much money you have left over. Instead, make it a habit to put the money into a different savings account.

If you are looking for a place to put your extra cash, Pioneer’s Special Purpose Savings account is a perfect fit. It keeps the money separate from the rest of your savings and gives you a place to watch it grow!

Pay off Outstanding Debts

Extra money can go a long way with any debts you currently have. Whether it’s a small personal loan, a credit card, a car payment, or a mortgage, if you have extra money, put it towards your debts. You’ll save money in the long run and get rid of that monthly bill.

There are two methods for paying off debts you can apply your extra savings to. The first is to use it to pay off your smallest debt first and then take the extra money that went to that debt and apply it to the next smallest debt. The other method is to put the money towards your largest debt to try and get that paid off first. Once that debt is gone, you can throw all of the money that went to that debt to the rest of your bills. Either way, you’ll pay off your debts quickly.

Buy something Nice

woman with shopping bagsHow often do you buy something nice for yourself? If you've made other smart financial decisions, there is nothing wrong with spoiling yourself every now and then. Treat yourself to a nice dinner, buy that new TV, get some new clothes, or anything else you might want.

Just be sure to stay within your budget and only use extra money when buying yourself something. It’s easy to go overboard when you have extra cash and go on a shopping spree. Only spend the extra money you have and don’t accidentally dip into other parts of your budget.

If you are looking to buy yourself something nice and want to support your local community and economy, check out Pioneer’s Buy Local program. We’ve partnered with local businesses so you can earn double Rewards! points when you use a Pioneer VISA credit card.

Invest the Money

Make your money work for you! Grow that extra savings into something even larger. An extra 50 or 100 dollars might not do a lot for you now, but by investing it month after month, you could turn that petty cash into something significant. 

There are many ways to invest your money with differing amounts of risk and reward. Technically, having a savings account is an investment because you earn interest on it. But the amount of interest earned is low with very low risk.

On the flip side, you could play the stock market. This comes with a much higher risk, but the potential for higher reward too. Many people make their living playing the stock market and earn big bucks when they make the right choice.

If you want to dip your toes in investing and earn some extra money, Pioneer has Term Certificates. A Term Certificate lets you put money away for a set amount of time and it earns you a higher interest rate than a regular savings account. After the set period of time is over, you get your original money back plus the interest earned. It’s a slow and steady way to increase your money over time!

Learn More about Term Certificates

Member Benefits
IRA Term Certificate
Buy Local Special Purpose Savings account


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