“I’d like to grow that money so I can pay it off completely”: Early 30s couple with $4,000 inheritance seeking advice on safe investments for future needs. How can we make our money work for us?

Hi Money Minder,

My husband and I received a sweet $5,000 check for our wedding, and we’ve decided to stash $1,000 away for emergencies. Now, we’re not sure where to invest the remaining $4,000. We want it to grow steadily while still being accessible when needed. Any ideas?

Here’s a bit about us: We’re in our early 30s with stable union jobs and 401ks. We plan to buy a house soon, and I have some money in my 401k that could be used for a down payment. I also have $7,000 in credit card debt, but instead of paying it off with the $4,000, I want to find a way to grow it and then eliminate the debt altogether (if possible).

Any suggestions on where to start or any resources like books or videos for beginners like us? Thanks a bunch for any tips.

Cheers,
Savvy Saver

Response from THE MONEY MINDER:

Hello There,

Congratulations on your wedding and the generous gift from your husband’s uncle! It’s wonderful to hear you are taking steps to manage your finances wisely. Given your circumstances, it seems like the best course of action would be to first address your credit card debt before considering investing the remaining $4,000.

Paying off your $7,000 credit card debt should be a priority since credit card interest rates can be significantly higher than any potential returns you might get from investing that money. By eliminating this debt, you will free up funds that you can then redirect towards building your emergency fund or investing for the future.

After you have paid off your credit card debt, you can focus on building your emergency fund and saving for your new home. Since you mentioned that you are planning to buy a house in the next year, it might be wise to keep the funds in a high-yield savings account or a short-term CD. These options offer liquidity while still providing some interest on your savings.

As for learning more about investing, I recommend checking out resources like “The Simple Path to Wealth” by JL Collins or “The Little Book of Common Sense Investing” by John C. Bogle. These books provide practical advice and insights for beginners looking to make their money work for them.

Remember, it’s essential to have a solid financial foundation before venturing into investing. Take care of your immediate financial needs first, and then you can start exploring investment options that align with your long-term goals. All the best from THE MONEY MINDER!