“A penny saved is a penny earned…”  We all know the old saying, but what do you do with your pennies saved? This is a loaded question with today’s market and bank issues. While having one of our monthly budget meetings, my husband and I started discussing what to do with the little bit of money we had saved. I pushed back my inner 5 year old that was screaming “BUY SHOES!” and consulted some of my favorite money gurus (Dave Ramsey and my grandmother) for advice, and shamWOW there is a lot to know (please note that “shamWOW” can easily be replaced by “Shazam!” for the earlier generations).  In this post we will examine the least risky of investment opportunities:

C.D (Certificate of Deposit):  These are usually found at banks and are basically savings accounts with slightly higher interest rates because of longer savings commitments (like a year or longer).  My grandma swears by these, but Dave is not a huge fan. I think this is a good option for “extra” money that you don’t want to tie up for 20 years, but won’t need immediately.

Savings Accounts: A savings account is the most basic and simple way to save. The pro of using a basic savings account is low risk and very easy access to your money. The con is there is little return on your investment.

Under your Mattress: While today this may seem like the safest way to go, it is the least productive. If you put a 100 dollar bill under your mattress, in 10 years you will have one very dusty 100 dollar bill, no interest or growth to it. Another downside of the mattress is you have easy access to your money, and easy can be dangerous for some. Knowing that you have money at your fingertips can create non- emergency “emergencies” – like a shoe sale at Nordies.

Stay tuned for Part 2 of this series in which we’ll look at some other common options, Stocks, Bonds, and Money Markets.

Photo by gregwake