With home prices on the rise in the past year, many consumers have begun to see their personal financial situations improve. This has helped them in may ways, such as allowing them to put more money toward paying down credit card debt.
May proved to be another solid month, with the CoreLogic Home Price Index increasing 7.1 percent when compared to the previous month and 5.1 percent year-over-year.
“It’s been more than seven years since the housing market last experienced the increases that we saw in May, with indications that the summer months will continue to see significant gains,” said Mark Fleming, chief economist for CoreLogic. “As we approach the half-way point of 2013, home prices continue to respond positively to the reductions in home inventory thus far.”
In addition to putting additional funds toward debt balances, there are some other good money moves people can make when they find themselves in a better situation.
1. Invest – One of the best moves consumers can make when they have extra money is to invest, according to Life Hacker. Some people might believe is it better to simply save because their is no risk, but with interest rates so low you might actually lose money by doing this as a result of inflation. That being said, consumers should do some research and find an investment plan that works best for them.
The source recommends a low-cost target-date retirement fund, which diversifies automatically and rebalances based on the person’s age. It also comes with low fees.
2. Use the 10 year savings strategy – After investing, consumers might want to deploy the 10 year savings strategy, the source noted. This strategy is used to save for predictable expenses for the next decade, such as wedding, kids and home costs. The best way to make this type of savings plan successful is to automate the process. One of the biggest obstacles to saving is actually getting to the bank and putting money away. However, consumers can automatically deposit a percentage of their paycheck into a savings account.
3. Start a college savings fund for your child – With the cost of college increasing nearly every year, stumbling upon more money could give people the opportunity to begin saving for their child’s education, CNN Money said. This could prove to be a major help when it comes time for their kids to go away to school, and their tuition and room and board totals $50,000 per year.