The 11 Best Short Term Investments For Your Money

I have $65,000 that I need to invest but I want to make more than the bank is offering.  Where can get a high return on a short-term investment with limited risk?

<Sigh.>

This exact question was asked of me just the other day.

You would be surprised how often I get asked something similar.  It has definitely been more times than I can count!

We’re in an eventful time where the stock market is behaving like a schizophrenic  and interest rates are at record lows – again. (I’ve refinanced my house twice!)

Low mortgage rates are great, but how do you actually make money in the short-term?

In such an unstable market, short term investing may be a safer alternative for investors. Short-term investing allows investors to invest their money with little or no risk, while knowing their money is not going to be tied up for long periods of time.

The typical short-term investment is expected to grow for several months, or a few years, and can be turned into cash or other short term investments when they reach maturity. (In the investing world, “long term” investments are really long term — often decades — which leaves room for short-term investments that can still last several years.)

Before I share the best short-term investments for your money, I first want to share where not to put your money: the stock market.

This can mean individual stocks, mutual funds, ETF’s – whatever.  If you know you need the money back in the short-term, the stock market is the last place you need to be.

Even if you think the market is down or your eyeballing a stock that has recently spiked lower than usual – it’s not worth it.

Too much can happen in the short-term that can wipe out your principal with little time recover.

Capisce?

Peer to Peer Lending

Peer-to-peer lending websites allow investors to broaden their investment portfolio by spreading out the investments and reducing their risk.  These websites work as tools to connect investors to qualified consumers in need of a loan and allow investors to become the bank, providing a small percentage of multiple borrowers’ loans.  Investors purchase notes and receive a monthly income in the form of loan repayment and interest. In the end, this can easily be a win-win for everyone involved.

1a. Lending Club

Lending Club sets the interest rate on notes based on specific credit criteria.  And since they only accept desirable borrowers, they dramatically reduce the risk for default and potential losses for the lenders.  Lenders may start out small and increase the amount of money they are willing to lend as their confidence in the company grows.  Lending Club offers loans from a few hundred dollars to over $10,000; how much you should invest depends on the level of risk you’re comfortable with as well as your investment timeline.

Here’s a video that walk you through the Lending Club investment process. You can also see my review post on Lending Club.

1b. Prosper

Prosper does not set a specific interest rate for borrowers.  Instead, the website connects borrowers and lenders through online auction-style bidding.  This set-up allows lenders to be more in control of their monthly income since they only accept interest rates they are comfortable with.

Borrowers list their loan and the highest amount of interest they are willing to pay. After that, lenders bid the interest rate down based on the lowest amount of interest they are willing to accept.  This feature provides the stability of a predictable, high yield income on the notes.

If you need more info, check out our review post on investing with Prosper.

2. Cash Back Rewards Offers

While pursuing rewards may not automatically come to mind when you think of short-term investments, the signup bonuses credit cards offer can actually be extremely lucrative. However, your “earnings” will be based on your spending instead of the dollars you invest.

Here’s how it works: Let’s say you signed up for the Chase Sapphire Preferred^® card in order to score the huge signup bonus. The current offer will award you with 50,000 points worth $500 after you spend $4,000 on the card with 90 days. And since the $95 annual fee is waived the first year, you can earn this bonus without paying anything out of-pocket to do so. Are you with me so far?

To make the most of an offer like this one, you’ll want to meet the minimum spending requirement with stuff you were going to buy anyway. Think groceries, gas, and your regularly monthly bills. Then you’ll simply pay off your card right away to avoid credit card interest. It’s as simple as that.

The thing is, there are so many ways you can spend 50,000 Chase Ultimate Rewards points. For example, you could book $625 in travel through the Chase travel portal – that’s more than enough for a round-trip flight! Conversely, you could turn in those same 50,000 points for a $500 statement credit or $500 in gift cards.

Plenty of people even leverage the value of Chase Ultimate Rewards points and similar rewards currencies to travel the world, earn a steady stream of cash, or treat themselves once in a while. Once you start earning, the sky is the limit.

Learn more about the Chase Sapphire Preferred^® card and its huge signup bonus, then get ready to earn some easy cash in the short-term. Also check out some of our top cash back offers in terms of “bang for your buck”:

Chase Freedom^® – This card offers a sweet $150 bonus after you spend just $500 on your card within the first 90 days. Simply charge a few monthly bills, your groceries, or your utilities and you’ll score a $150 statement credit in no time. Best of all, this card will never charge an annual fee. In terms of short-term investments, there is almost no way to earn an easier $150 than this. Read here to learn more about the Chase Freedom^® card.

Blue Cash Preferred^® Card from American Express – This card offers an easy $150 signup bonus if you’re able to spend $1,000 on your card with 90 days. Plus, you’ll earn 6x points on your first $5,000 in grocery spending your first year, which is the highest rate of any other card out there! If you’re after easy money in the short-term, it really doesn’t get any better than this. Read here to learn more about the Blue Cash Preferred^® Card from American Express.

Short-Term Investment Account Options

 

Here’s what you need to know about the various short-term investment accounts available to you:

3a. Online Savings Accounts

Want to guarantee your investment will not lose any money while at the same time generating a little bit of a return? An online savings account is a great fit for that goal.

In using this account for short term, investing you’ll get:

• Guarantee to never lose principal on your investment as long as you keep your total deposit at the bank below FDIC coverage of $250,000. Deposit your money and walk away knowing that it will be there when you’re ready to cash out.
• A small, risk-free return on your investment. Current interest rates are very low, and those low returns mean you won’t earn a lot of interest for the time being. For now, it won’t be enough to keep up with inflation. However, online savings accounts do offer a risk-free return you will never have to lose sleep over.
• High liquidity. Most of the high quality online banks allow 6 withdrawals per month from savings accounts. In other words, you can generally cash out your funds at any time without much hassle or expense involved. Meanwhile, you won’t have to worry about forking over part of your profits to sell your investment since it is safely tucked away in a low-risk savings account.

In using this account for short term investing you’ll miss out on:

• Potential higher returns from other types of investments. Since online savings accounts aren’t offering the best interest rates right now, you could potentially do better by putting your money elsewhere. However, that would require more risk, too, which is something you’ll want to avoid when it comes to short-term investing.

Not sure where to start? The best online savings accounts are available at online banks like Capital One 360.

3b. Online Checking Accounts

Just like online savings accounts, an online checking account can also serve short-term investment needs. You get many of the benefits of an online savings account with even more liquidity because the number of withdrawals isn’t limited. Since you would be storing your money in a checking account rather than a savings account, you do take a hit on the interest rate. Unfortunately (or fortunately!) interest rates are so low that the difference isn’t as significant as it could be. In using this account for short-term investing you’ll get:

• A guarantee to never lose principal on your investment as long as you keep your total deposit at the bank below FDIC coverage of $250,000.
• A small, risk-free return on your investment. Current online checking interest rates are very low. You probably won’t earn enough to keep up with inflation, but it is a risk-free return.
• Extremely high liquidity. You get unlimited withdrawals via transfer, debit card, or ATM use with online checking accounts. Get your money out at any time without paying a fee as long as you use a no-fee ATM.
• A hassle-free investment – Even though you don’t earn a lot of interest with this strategy, you won’t have to endure much of a hassle, either. Opening an online checking account is a fairly painless process that won’t stress you out or take up too much of your time.

In using this account for short-term investing you’ll miss out on:

• Potential higher returns from other types of investments, including savings accounts if you don’t need daily access to the money. When you park your money in a checking account, you miss out on higher returns elsewhere.

Looking for an online checking account? Check out the best online checking accounts currently available from Compass Bank and Capital One 360.

4. A Roth IRA

I know what you’re thinking, “Jeff, the Roth IRA is NOT an investment.” Trust me, I totally get it. But let me explain why one of my favorite retirement accounts also can work as a short term investing account. With all other types of retirement accounts — from 401ks to Traditional IRAs — you get hit with an early withdrawal penalty and income tax if you withdraw funds before retirement .

The Roth IRA is different. Since you fund your Roth with after-tax income, you are free to withdraw any contributions (not earnings on those contributions) at any time you want. It isn’t recommended because you would much rather the money stay invested, but it does give you the option to set money aside for retirement now but withdraw it if times got tough. I have seen far too many people not save enough for retirement, and pay heavily for it in their later years. Funding your Roth IRA allows to get a huge head start on this. In using this account for short term investing you’ll get:

• The ability to withdraw funds. Transfers take a few days and you may have to sell investments at inopportune times in order to cash out. However, the fact that you can take your actual contributions out without a penalty does stand out as a huge benefit.
• Potentially higher rates of return. With a Roth IRA, you get access to other types of investments like mutual funds, ETFs, and bonds to earn a higher rate of return. If the market does well while dollars are invested, you can secure healthy returns and profit from your investment.

In using this account for short term investing you’ll miss out on:

• Risk-free returns. When you invest your money into stocks, bonds, mutual funds, and ETFs you are accepting risk for a potentially higher return.
• FDIC coverage. If your brokerage fails you will be able to file a claim with SIPC coverage, but it won’t cover investment losses — just losses from the failure of your broker. (That’s why it is so important to find a great place to open your Roth IRA.)

Just remember, if you think you need you’re money in the short-term, avoid the stock market for now. If you realize that part of the money can now go towards retirement, then you can shift it over. Think opening a Roth IRA is complicated? We’ve told you the best places to open a Roth IRA in the past. Brokerage firms like Scottrade and E*Trade are great and also have lots of options to choose from.

In summary, a Roth IRA can provide a solution for individuals who crave the potential for higher returns but want the ability to withdraw their contributions if the really needed to.

5. Money Market Account

Money Markets are currently paying a very close APY to one year CD’s.  Investors familiar with the discipline of owning a CD can earn a similar return with a Money Market and still have immediate access to their funds.

Money Market accounts provide depositors with ATM cards, checks and deposit slips.  Money Market accounts are based on the account balance, not the length of time you invest your money.  When CD rates begin to rise, clients can move their money from the Money Market without paying a penalty for early withdrawal.

All of these factors combined are why many people consider money market accounts as a type of “savings account on steroids.” While there isn’t much risk involved, you can potentially secure a higher rate of return.

Looking for an online bank that does Money Market Accounts? Compass Bank is a great choice.

Short-Term Investment Options

Here are some investments you could use with the above accounts.

6. Short-Term Bond Funds and ETFs

Short-term bond funds are products that are usually only managed by a professional financial advisor. Bonds are not as stable as money markets, but they do offer the potential to earn a higher yield.  These bonds are a product of the market and will pay out according to the market’s current condition in fluctuating monthly payments.  Short-term bonds usually mature in terms within 2 years or less, which can make them an ideal choice for investors with that type of timeline. You’ll need a brokerage account like Scottrade or E*Trade to be able to trade bond funds and ETFs.

7. Certificate of Deposits (CD’s)

Banks offer a variety of terms for their deposit accounts, ranging from 3 months to 5 years. Which length of CD will work best for you depends on your timeline and how long you want your investment out of your hands. CD’s allow depositors to invest their cash for a specific length of time. The longer the term of investment, the higher the yield will be. A client wishing to receive monthly interest payments can elect to do so at the time of application. However, most individuals who buy CDs let the interest accrue until the CD matures.

The only downside to a Certificate of Deposit is the fact that, if you need to pull money out before the maturity date, you will pay a fee. The fee is usually equivalent to 3 months worth of interest, and that can take a huge bite out of your earnings. You can get the highest interest rates for Certificates of Deposit at online banks like Compass Bank and Discover Bank.

Short-Term Bonds

There are three main short-term investments within the bond category, and each is one you could consider.

8. 5-Year Treasury Inflation Protected Securities

Treasury Inflation Protected Securities, also known as TIPS, are government bonds that are indexed to inflation. The interest rate on a TIPS is fixed, but the underlying value of the security rises with inflation as measured through the Consumer Price Index.

You might only get 0.5% in interest (paid semiannually), but over 5 years the value of the bond might increase 2.5% per year. The end result is, at the end of the term, your initial investment will be worth as much as it was when you first invested. However, you will earn a small bit of interest on top of it.

You can buy TIPS directly from the government at TreasuryDirect.gov. However, due to TIPS interest being taxable, most investors prefer to invest in a TIPS ETF or mutual fund. To purchase shares of an ETF or mutual fund you will need a brokerage account. Again, Scottrade or E*Trade are good places to start if you want to open a new brokerage account.

9. Municipal Bonds and Corporate Bonds

Municipal bonds are slightly more risky than TIPS and other Treasury investments, yet a majority of municipalities do not default on their bonds. The more significant risk is “interest rate risk.” In a low interest rate environment, if rates rise in the marketplace, the value of the bond decreases to compensate.

If you could get 4% on a municipal bond today, that’s a great return. But if rates go up and your bond loses 6% of its value, you’re suddenly on the losing side of the equation. However, the decrease in the value of the bond only impacts you if you sell before maturity. If you hold the bond to maturity you will get 100% of your initial investment back plus the interest yielded to you.

If you’re looking for short-term investments, you could buy a bond from someone else that was closer to maturity through a major brokerage firm.

Likewise, corporate bonds are even more risky than municipals and Treasury bonds because they are not backed by a state, local, or Federal government. As always, increased risk can mean an increase in your rate of return. The same interest rate risk issue applies to corporate bonds; holding to maturity will eliminate this one piece of risk.

Where to Buy Individual Bonds?

You’ll need a brokerage account like Scottrade or E*Trade to be able to trade individual bonds, bond mutual funds, and bond ETFs.

10. Pay Off High Interest Debt

Looking for a great return on your investment? Pay off your high interest debt. If you have a credit card with a 15% interest rate carrying a $10,000 balance you have an opportunity for a great return on your investment. If you pay off that debt it is like getting a 15% return on $10,000.

There are few investments that will earn the high returns of paying off debt. Not only are you getting a great return on investment, you’re saving money from future costs and bettering your overall financial situation. It’s the ultimate win-win.

You can pay off high interest debt on your own. However, financial tools like Mint can help you manage your finances so you can see what kind of an impact your debt payoff is having.

Even better, you can transfer your high interest balance to a 0% APR balance transfer card to speed up the process. With these offers, you literally transfer your balance from one card to the next in order to score 0% APR for anywhere from 12-21 months. If you’re paying a lot of interest right now, going through with a balance transfer can improve your finances and get you out of debt that much faster.

Have high interest debt? Consider these two offers:

Chase Slate^{® –} The Chase Slate^® card offers the best deal for balance transfers on the market. Not only do you get 15 months at 0% APR, but you can transfer balances with no balance transfer fees for the first 60 days. If you’re paying high interest rates on existing debts, consider how much money you could save if you paid no interest for 15 months. You might even be able to use those 15 months to get out of debt for good! Read here to learn more about the Chase Slate^® card.

Citi Diamond Preferred^® Card – The Citi Diamond Preferred^® Card offers the longest 0% APR card on the market. After you sign up, you’ll get 21 full months with 0% APR on purchases and balance transfers! That’s almost two full years to pay down your high interest debts without paying interest at all. If you’re struggling to pay down high interest debts, you could save tons of money by transferring your balance. Read here for more details about the Citi Diamond Preferred^® Card.

The Bottom Line

If you’re looking for a place to sock away some cash for the short-term, don’t be afraid to think outside of the box. Thanks to the constant evolution of the world wide web, you shouldn’t have trouble investing your funds in any number of innovative online platforms.

As I shared above, however, short-term investing is much different than investing for the long haul. When you need to invest your money for only several weeks or months, you don’t want to pour cash into investments that aren’t easy to liquidate, charge fees for withdrawals, or are too risky for the short-term.

How do you invest your dollars for the short-term? Have you ever used one of the strategies listed above?

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Wait, WHAT?! This Guy Just Dropped One Billion Dollars on His Son’s Wedding

All my engaged friends lament about the insane cost of weddings.

They need to reconsider their options, though. Apparently they just need to move to Russia and marry the son of an oil tycoon — because they might get 1 billion dollars to pay for the most lavish wedding ever.

At least that’s what happened last week when the son of Mikhael Gutseriev, worth $6.2 billion according to Forbes, got hitched.

Said Gutseriev, 28, married Khadija Uzhakhova, 20, in a wedding that’s been estimated to cost nearly $1 billion.

Even for a billionaire, that’s insane. Here are more details on the absurd affair.

How the Heck Did They Spend $1 Billion on a Wedding?

So, how does one spend a billion dollars on a single event? It’s pretty easy, really.

• Spend four years searching for the perfect bride
• Invite 600 of your closest friends as guests
• Give them each a gold box inscribed with your names, because why not?
• Decorate with wayyyy more than 600 flowers
• Order a ginormous cake twice the size of any human
• Wear a custom Elie Saab gown that costs 1 million dollars and weighs 25 pounds, plus a $7 million tiara

Oh, and J. Lo.

Yep, the wedding included performances by Jenny from the block, Enrique Iglesias and Sting.

And the couple had a second wedding in London the week after.

Ugh. Moving on.

How to Save Money When Planning a Wedding

What if you’re not looking to spend a billion dollars?

If you’re planning your own wedding — and you’re not marrying the heir to a Russian oil fortune — you might prefer these articles instead:  

• 101 Creative Ways to Save Money on Your Wedding

• These 8 Websites Helped Us Save $21,781 on Our Wedding

• Planning a Frugal Wedding: 7 Crazy Ways to Save Money on Your Big Day

Your Turn: What do you think of this wedding? Was it a waste of money or a fairy tale?

Susan Shain, senior writer for The Penny Hoarder, is always seeking adventure on a budget. Visit her blog at susanshain.com, or say hi on Twitter @susan_shain.

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This 11-Year-Old Just Made an $11 Million Business Deal

Earlier this month, a sixth-grader from Austin, Texas, landed an $11 million business deal.

Mikaila Ulmer is the unexpected entrepreneur behind BeeSweet Lemonade. She’s also a public speaker and philanthropist — and, did we mention, an 11-year-old middle-schooler?

Her business has everything you could ask for: an innovative product, inspiring story, a strong environmental and social mission — and the most adorable boss ever.

“I work on the business after school, after I do my homework, and on weekends and during spring breaks,” Ulmer told NBCBLK.

How a 4-Year-Old Launched a Multi-Million Dollar Business

When she was four, Ulmer’s family encouraged her to make a product for the Acton Children’s Business Fair.

While she was brainstorming, she was stung by two bees in one week and became terrified of them. Her mother encouraged her to turn her fear into an education, so Ulmer studied the dreaded insect — and became fascinated.

She learned bees were headed for extinction and wanted to do something about it.

Ulmer’s “Great Granny Helen” had also recently sent her a 1940s cookbook, which included a recipe for flaxseed lemonade.

Ulmer decided to create a lemonade business and sweeten her lemonade with honey instead of sugar or artificial sweetener. It would be healthier, save the bees and support beekeepers.

BeeSweet Lemonade donates a portion of its profits to organizations fighting to save honeybees, which pollinate the crops making up about a third of American food groups, NBCLK reports.

Their extinction would threaten those crops, worth about $15 billion each year.

In addition to the lemonade business, Ulmer leads workshops on how to save honeybees and participates in panels about social entrepreneurship.

And she says she’s helping her friends start their own businesses.

“What makes me very proud is that she is not only a smart entrepreneur but she’s a good person and she’s kind to people,” Ulmer’s mother told NBCLK.

“That’s more important than business.”

The $11 Million Whole Foods Deal

After perfecting and selling her lemonade for four years from a lemonade stand and at youth entrepreneurial events, Ulmer took BeeSweet Lemonade to the big leagues.

She was on ABC’s “Shark Tank” last season at the age of nine — and received $60,000 from FUBU CEO Daymond John. After its initial success, BeeSweet landed a deal with Whole Foods to sell the lemonade in some regional stores.

In March, while receiving an award at South by Southwest, Ulmer announced an expanded distribution deal through United Natural Foods — worth $11 million!

BeeSweet Lemonade will now be available in 55 Whole Foods stores across the South. If it’s successful, it could soon be available nationwide!

Your Turn: Do you know any inspiring young entrepreneurs?

Dana Sitar (@danasitar) is a staff writer at The Penny Hoarder. She’s written for Huffington Post, Entrepreneur.com, Writer’s Digest and more, attempting humor wherever it’s allowed (and sometimes where it’s not).

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Do Liberals Hate America?

The idea of American exceptionalism has been embedded in our DNA for generations. It is the faith-based belief that, as Ronald Reagan put it, America is a "shining city on a hill." Do modern liberals believe that?

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Migraines are the Worst. But This Company Will Pay You for Having Them

You can’t eat. You can’t sleep.

You can’t even look out the window without feeling pain. Light hurts.

No, I’m not talking about the emotional aftereffects of a bad breakup. I’m talking about migraine headaches.

Make Money By Helping Doctors Learn How to Treat Migraines

If you’ve never had a migraine, be glad you can just take my word for it: They really, really suck.

It’s like a headache on steroids: severe, throbbing, and often one-sided pain. They can be accompanied by nausea, vomiting, sensitivity to light and — duh — irritability.

Oh, and women are more likely to get them than men. Lucky us.

But if you’re a migraine sufferer, there might be some light in the darkness. Just maybe don’t look directly at it.

Acurian Health is offering migraine sufferers up to $625 to participate in a study to help doctors discover better ways to treat — and hopefully eliminate — migraines.

Plus, you’ll receive medication and treatment at no cost to you, so it may help you feel better in the short-term, too!

The study is open to men and women between the ages of 18 and 75 who suffer from migraines and treat them with medication. You should also be otherwise healthy, with no serious chronic illnesses.

Click here and submit your information to ensure your eligibility. Once you qualify, you’ll be able to pick from a list of research facilities in your area.

And if you change your mind, there’s no obligation to participate.

At least there’s one sliver of good in dealing with migraines after all. And who knows? You might just help doctors find the perfect treatment to end them altogether!

Your Turn: Do you suffer from migraine headaches?

Disclosure: This post includes affiliate links. We’re letting you know because it’s what Honest Abe would do. After all, he is on our favorite coin.

Jamie Cattanach (@jamiecattanach) is a staff writer at The Penny Hoarder. She also writes other stuff, like wine reviews and poems.

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5 Ways to Make Your Content Mobile-Friendly for Increased Traffic and Engagement

I think it’s safe to say that smartphones aren’t a fad.

Jokes aside, mobile Internet usage has been going up year after year.

In fact, the number of mobile users has now exceeded the number of desktop users.

All that means is that if you’re not optimizing your content and your website as a whole, you’re likely not making the most of your traffic.

Additionally, it may be preventing you from getting more traffic.

In 2015, Google announced that it created a mobile-friendly algorithm, which the industry dubbed “mobilegeddon.” 

It didn’t have a huge effect, but some sites that were not mobile-friendly took a significant traffic hit.

Keep in mind that Google usually tests the waters before scaling things up.

Google has made it clear that it wants to serve mobile users mobile-friendly web pages, and it will likely become more and more important over time.

I hope I’ve convinced you that optimizing your website and content for mobile is worth the effort even though it might seem like another chore to do.

Not only will it help you get more SEO traffic in both the short and long term, but it will also help you with your conversion rates because a smaller percentage of your traffic will bounce.

In this post, I’m going to show you the five main ways you can optimize content for mobile. I encourage you to put as many of them into effect as possible.

A quick definition of mobile-friendly

I don’t want to jump ahead too far.

If you’re already familiar with what mobile-friendly means, feel free to skip ahead to the next section.

Otherwise, it’s really not that complicated.

As the name implies, mobile-friendly content just means that content appears well not just on desktop computers but also on smaller mobile devices.

That means that the text is easily readable, links and navigation are easily clickable, and it’s easy to consume the content in general.

Let’s begin with a test: It’s important to know where you stand. If your content is already mobile-friendly, you won’t need to do all the things in this post.

There are two main ways that you can test your site for mobile-friendliness.

The first is with Google’s own mobile-friendly test tool, which is something that everyone should use.

Another option is to use a site like this mobile phone emulator, which lets you see what your site looks like on a variety of different phones. It won’t give you a grade like Google’s tool will, but you’ll be able to see if anything shows up weird.

A quick note on responsive design

You’ve probably heard about “responsive” design.

It’s typically used as a synonym for mobile-friendly design although that’s technically not true.

There are a few different strategies to create mobile-friendly websites, and using responsive design is just one of them.

It means that as the screen’s size changes, the content adjusts to match that size:

That being said, responsive design is a clear winner in most situations.

Because of that, some of the tactics I’m about to show you are based on the assumption that you will implement responsive design as opposed to one of the other methods for creating mobile-friendly pages.

1. Widths should be in terms of percentages

All HTML elements (e.g., “divs”) have some sort of width assigned to them.

If you right-click any element on a web page and then choose “inspect element” (in Chrome), you’ll see a panel come up.

If you click on an element in the left window of the panel, the corresponding CSS (style properties) values will be displayed in the right window.

You will typically see a value for “width” specified, like this example shows:

This value can be set in terms of pixels (essentially tiny blocks on the screen) or a percentage.

When you assign 50% as a value, that tells the browser to make that element 50% of the width of the screen (or of the section that it’s contained in).

This is a good thing because if the screen is smaller, that section still shrinks to fit half the screen, which keeps things looking how they should.

If you instead specify widths by pixels, the widths of those elements do not change as the screen size changes.

If the width of a section in pixels is bigger than the screen size (common for phones), the user will have to scroll horizontally, which is a pain on mobile devices.

What you should do about widths: If you bought a good theme or hired competent developers, you don’t have to worry about this too much.

However, if you ever design your own landing pages or modify your theme, keep in mind to specify widths as percentages.

If you’ve used pixels in the past, track those down and fix them now.

This is a simple change that will make a big difference.

There is one exception, though. You can specify pixel widths if you know how to use media queries effectively.

What are media queries? Read on…

2. Use media queries to make your site responsive

The real key to using responsive design is to use media queries.

Again, if your site is already responsive, you don’t have to worry about this unless you start creating your own custom pages.

But if the situation comes up, you’d better know how to handle it.

Have you ever wondered how some pages not only resize as the screen size changes but also reshape?

Certain sections might get wider or thinner than before, and other elements may move altogether (navbars and sidebars).

The answer is that the site uses media queries to truly make the site responsive.

Here’s what a basic media query looks like (you can find them in the CSS of some pages):

@media screen and (max-width: 1020px) {

#container, #header, #content, #footer {

float: none;

width: auto;

}

p{ font-size: 2em; }

}

There’s a lot to see here, so let’s break it down into simple chunks.

Right at the start of the line, the media query is labeled with the “@media” tag.

The “screen” part is standard to include and means that the media query will be applied based on screen size.

The most important part is the stuff in the brackets.

You can specify both “min-width” and “max-width.”

In this case, the max-width is 1020px.

This means that when the screen is up to 1020 pixels wide, all the CSS code inside this media query should apply.

The code inside will be given priority over other codes for the specified elements.

Going back to the code, you can see a bunch of normal CSS code inside the outside curly brackets for the overall media query.

You can see that when the screen is under 1020px wide, any elements with an id of “container,” “header,” “content,” or “footer,” will now have “auto” width and a float value of “none.”

Similarly, all text in paragraph tags (p), will have a font size of 2.0 em.

Applying this is simple.

Load your webpage, and then drag a corner to make the screen smaller.

If you notice that certain parts become hard to read at a certain point, create a media query. Change it so that your content elements become larger or smaller, whatever is needed to make the content more mobile-friendly.

Note that you can apply multiple media queries to a page. Just specify a maximum and minimum width, and make sure they don’t overlap.

3. Pop-ups are dangerous

I’ve certainly experimented with using pop-ups to collect email addresses on my sites, and you should try them on yours as well.

However, you have to be very careful.

Many cheap pop-up tools and plugins look fine on desktop screens but completely ruin the user experience on mobile devices.

They’re often difficult to close, and sometimes you can’t even close them.

Not surprisingly, they cause visitors to instantly close the window.

There are three main solutions to a pop-up problem on mobile devices:

Solution #1 – Get rid of them: The first is to disable pop-ups for your mobile visitors.

This is a good solution, but not all pop-up tools allow you to do this easily.

Solution #2 – Simplify them: Another solution is to make your forms as simple as possible to fill out (minimize the number of fields) and make them easy to close.

This is probably the worst solution, but it’s still better than sticking with whatever default pop-up you’re currently serving.

Solution #3 – Only use pop-ups when a visitor clicks: This is another great option.

If you’ve heard about content upgrades, you may have already seen it in action.

The idea here is that you don’t use pop-ups that come up after a visitor spends a certain amount of time on your pages.

Instead, you offer them some sort of lead magnet and tell them to click a link to get it. Then, the pop-up will come up and ask for their information.

People are much more receptive to pop-ups in this situation because they’re the ones who asked for it.

Just to wrap up this topic, if your current pop-up tool can’t handle these modifications, it’s time to upgrade to one that can.

4. Strip down the distractions

One of the worst experiences for a mobile user is to load a page and then be swamped by several elements competing for their attention.

Sometimes, they don’t even load at the same time, so the page keeps shifting around as it loads, which is extremely frustrating.

Some of that comes down to coding, but most of it comes from having too many distractions on the page.

The typical sidebar is useless on mobile.

It gets pushed down to the very bottom of the page and barely ever gets used.

So, unless you can create a fancy sidebar like Google did, it’s probably better to remove it altogether for mobile users.

This goes for other elements as well, e.g., your navigation menus.

How do you remove them?

Simple: use media queries.

On the main “div” for the sidebar, as an example, give it a CSS value of “display:none;” when the screen size is small. Then it won’t show up.

Copywriters shine on mobile: As a final note here, remember that it’s even more difficult to read long content on mobile devices.

Keep your content as concise as possible.

It’s better writing, and mobile users prefer it anyways.

5. Get ahead of the curve with Accelerated Mobile Pages (AMP)

Accelerated Mobile Pages (AMP) are still HTML pages, but they follow a specific format.

Google has teamed up with a bunch of huge brands to create and support them.

These pages get priority in the search results of mobile users for certain relevant queries.

The whole point of them is that they load really fast for mobile users, which is why Google is encouraging content creators to make them.

If you’re interested in seeing a demo, use your mobile device, and search for something on g.co/ampdemo.

Should you create AMP? I can’t give you a definitive answer. On the one hand, they may help get you some extra traffic, but I haven’t experimented with them enough to conclude anything.

And while Google supports them, that doesn’t mean that they will become widely adopted. Google could end up shutting the project down sometime in the future.

The one downside is that you need to maintain two versions of your content. The good news is that it’s easy with WordPress because there’s actually a plugin for that—all you need to do is enable it.

Finally, if you’re interested in creating AMP on your own non-WordPress site, here’s the official tutorial. I’d create my own, but Google’s will always be better.

If you have the extra time and resources, I’d encourage you to test out AMP, but most businesses will be better off to wait a bit and see if they get adopted more widely first.

Conclusion

If you’re not optimizing your content for mobile users, you’re behind the curve and missing out on traffic (and wasting some of your current traffic).

That’s why I gave you these five ways to optimize your content for mobile.

By now, you should know which of them apply to your website and how to start implementing them.

Try to put them into effect as soon as possible, and measure whether there are any changes in mobile traffic or engagement.

If you have any questions or results to share, I’d be happy to hear them in a comment below.

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Questions About Retirement Savings, Distraction, Investments, Zumba and More!

What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to summaries of five or fewer words. Click on the number to jump straight down to the question.
1. How Vanguard makes money
2. Unequal wage cuts
3. Saving for retirement at 50
4. Entrepreneurship ideas
5. Marriages and debt
6. Evicting a horrible tenant
7. Zumba teaching as side gig
8. Distracting websites
9. Income tax deduction question
10. Homemade laundry detergent recipe
11. Worrying about stock market strategy
12. Sitting on future investment money

Over the past week, I’ve been laid low by a very nasty cold, one that left me in bed for multiple days (only getting up long enough to take care of minimal parenting effort) and left me in something of a daze for a few more days beyond that. I still don’t feel perfect, but I feel good enough to get back into the normal routine of work and parenting and household tasks.

This week taught me a few notable things, though.

First, it’s always valuable to have some work done in advance. I have a folder on my computer with a bunch of completed articles for The Simple Dollar sitting in there in case of emergencies. I even call it my “professional emergency fund.” Most of the articles you read last week came from that “emergency fund.” I was able to simply post them and then go back to bed. Some jobs make this kind of “professional emergency fund” possible; others do not.

Second, when that extra work is depleted, then you have to refill it again because another emergency is just around the corner. My folder of extra work is just about empty, so this is going to be a very “nose to the grindstone” week where I use up just about every topic idea I have written down in my topic notebook. (Yes, I keep a topic notebook. Maybe my process for writing The Simple Dollar would make a good post someday regarding how to keep a blog or other regularly updated creative endeavor going and earning money…)

Third, you’re usually better off not working at all than trying to work when you feel awful. Not only do you work at a very slow pace, the work you do produce is of low quality even if you’re trying hard to do a good job. The focus and the energy just isn’t there. A supervisor is really well served by trying to send anyone who shows up for work genuinely sick home for the day and finding someone else to take their spot.

In the end, it’s not good for the employer or the employee to have a sick employee around. They’re not going to work very quickly, they’re not going to do good work, and they’re likely to make other workers sick.

Q1: How Vanguard makes money

If I want to invest in index funds thru Vangard, how do they make their money if they don’t charge anything for the service?
– Nancy

You’re correct in that if you invest directly with Vanguard, they do not charge you any transaction fees at all. If you buy into a fund, you’re not charged, nor are you charged if you sell any of your investments.

So, how do they make money? If you take a look at a page for a typical fund at Vanguard, you’ll notice an interesting line under the “Fund facts” section. It’ll say something like “Expense ratio as of 04/28/2015,” followed by a percentage – in this case, 0.17%.

What that essentially means is that each year, Vanguard removes 0.17% of the value of the fund as revenue for themselves to keep the fund going. If you scroll down and look at the characteristics of the fund I linked to above, you’ll find that the fund has $389.8 billion in total assets. That means that, given their expense ratio, they take $662 million out of the fund each year.

That seems like a lot of money – and it is. But that money is how Vanguard stays in business, as it covers all of their employees and many other business expenses. Vanguard employs a lot of people, manages the investments of many people and institutions, and so on. That really adds up quick.

Q2: Unequal wage cuts

I have been on my job for five years. My coworker has fewer years. Now my employer is cutting our wages and we all making the same wages. How is this fair to me?
– Eli

It’s probably not fair to you (although I don’t know the full story of what’s happening here). The question is what your response is going to be.

You can certainly go talk to your supervisor about this and try to negotiate to recoup some of your losses from the wage cuts. It may be that they’re willing to give back some of the cuts to some of their longer-lasting employees – or maybe not, it’s hard to tell.

You also should prepare yourself to change jobs, especially if it’s fairly reasonable for you to find a new job in your field with similar or better wages. This might be a good option because, typically, when a company is cutting wages like that, there are some problems going on behind the scenes and you may not have the most secure job anyway.

Q3: Saving for retirement at 50

I just read your article about the differences in 401(k) and 403(b). Thank you it was very helpful. I am approaching 50 and i am worried about my retirement as i have not been contributing to my 401(k) my work offers. How can I quickly put money into retirement at this late date? I am a teacher and I only have about 200.00 per month to spend on retirement so I want to make the best money on my return.
– Sarah

The truth is that if you’re nearly 50 and are only contributing $200 a month to retirement, you’re not going to build up enough to really make a lasting difference at age 65. Let’s say you put all of it into stocks and you actually earned a 7% long term annual return on that money. You’ll have $64,000 saved up by age 65. If you then withdraw it at a safe withdrawal rate of 4%, that will give you a steady income of about $220 a month for the next 30 years or so. That’s going to be in addition to your Social Security, of course, and any other retirement you may have.

In other words, it doesn’t matter how you invest. Saving $200 a month starting at age 50 is not going to make a mountain of cash for you at retirement.

If you’re simply looking to make the most of what you can save, your best bet is to assume you’re going to work for as many years as possible, which gives you the most years for compound interest to work for you and more years to contribute. That also means you should be contributing your money to investments with greater risk and volatility because you have many more years to recover, so look heavily at stock investments and target retirement investments that target a point 20 years from now.

Q4: Entrepreneurship ideas

I agree that everyone should dabble in entrepreneurship in their free time, in my case that’s ALL I’m doing as I’m currently unemployed and have no luck in the job market.

I want to start drawing my own designs for stationery (I’m good at it!) and sell online and see where it takes me. I just want to start with what I can do and with what I have. If I think too far into the future I get crushed and won’t start anything. I have to start somewhere.

Just wondering if you have any thoughts on this?
– Nadine

The first thing I’d do is figure out who exactly I’m selling to and how I find them. If you’re wanting to sell stationery online, who exactly is going to buy it? And how do you reach those potential customers without annoying them? If you don’t know where your audience is, especially in a niche market like stationery, you’re not going to do well.

For this kind of thing (making and selling your own stationery), Etsy is a great place to start and it will provide a very slow trickle of customers who find you via searching, but it’s not going to help you find a lot of customers. You need to find them.

So, how do you find them? Figure out where people who might buy stationery would hang out online. Stationery fan groups on Facebook, for example. You’ll probably find people who are interested in fountain pen groups as well, for instance. Join those kinds of groups and participate. Figure out the things people like and are looking for and then do your best to fulfill it. That’s how you build customers.

Q5: Marriages and debt

I read an article by you dated 2011. It was “Why Get Married At All” and had to do with financial issues. You wrote about the legally binding financial securities of being married. What I would like to know is when a couple marries in the State of New York, is each person legally responsible for debts the other may have had prior to marriage. Thank you.
– Sam

From my research, New York follows a common law property standard when it comes to debts, which means that if you have an individual debt, it remains yours individually regardless of marriage.

However, having said that, if one member of a marriage is paying off a debt, it naturally affects both partners in the marriage. It’s going to eat through the shared pool of money that you have for expenses and that’s going to affect both of you. Legal responsibility is different than personal responsibility, in other words.

So why not keep all debts individual? For one, many loans are easier to get if you’re both signed to the loan. For another, if only one of you is listed on the debt or on the deed of property that’s shared in practice, it can create real problems if you divorce. If you’re involved with the ownership and payments of something, your name should be on the deed and the debt.

Q6: Evicting a horrible tenant

We recently rented out the other home on our property to a younger couple and after 6 1/2 weeks of hell, we evicted them (10 day notice to pay/quit).

They never paid even after we asked repeatedly, had several police agencies show up looking for both of them, CPS showed up and we had people telling us they were known for doing meth. Needless to say, they left after asking us to just give them more time and us refusing. I went into the home and was devastated at the destruction done in 6 short weeks. Over 20 holes in the wall (some the size of a head), doors off with holes, blood on wall, writing all over the walls, smoke stains (not sure how) all over the walls, stains all over every carpet (and we just put new carpet in), finger painting all over walls/doors. It was horrible. She is now saying we illegally evicted her and she wants back in. Also that we don’t have the right to rent the house out because it’s an illegal place? She says she’s suing us!!! My head is spinning. We just found out that they have 9 evictions on their record (wish I would have done my homework).

Is there something that I was suppose to do in order to make my home a legal residence to rent? This is all new to me. I sure don’t want to lose out on the money that it’s going to cost us in repairs and rent that is owed and I can’t find anything about it online so I figured I’d ask.
– Brenda

It’s really hard to tell from your description whether or not the previous tenant has any legal ground for her claims. It’s also hard to tell if you followed sensible procedures for renting out your property.

In either case, it probably makes sense to get ahold of a lawyer and go through everything that’s happened and what you need to do going forward to protect yourself. You may have grounds for legal action against the tenant, but it’s probably doubtful that you’ll ever be able to collect from them. I’m also unsure as to what your insurance on the property is like.

I’m really sorry that this is the situation you were handed with the first tenant you had, but you are learning a lot of lessons from this experience, ones that will serve you very well in the future.

Q7: Zumba teaching as side gig

I just wanted to share with you and your readers one of the ways that I have increased our family’s income and decreased our expenses (in 3 ways). Last year I became certified in teaching Zumba (dance cardio). The certification costs about $230/year but I teach classes at least 3 times a week and earn $20-$30 per class. One of the classes is at a community center and by virtue of being an instructor there, I have free access to all the other classes they offer. So we do not have a gym expense. Additionally, with all these exercise, I have reduced potential costs for medical appointments and mental health appointments (seriously). Now I am becoming an instructor for kickboxing, too, which will impact our income further. The last point I want to make is that I am not the stereotypical thin gym rat. I started this last year and had no previous athletic involvement. I am overweight by at least 40 pounds. The fitness world needs more average people, like myself! I love doing zumba with others, no matter the weight or fitness level. Hope this encourages someone to try something new – and make a financial step forward because of it!
– Nicole

Going through the certification process for being an instructor for fitness classes can really be a great way to earn a side income and get some exercise at the same time. It’s awesome how well this has worked out for you. Congratulations!

However, before you leap head-first into doing this, make sure of a couple of things. First, is this something you would want to do frequently enough to make money from it? Second, are you really sure you want to be a fitness instructor? Third, and perhaps most important, is there a venue for you to teach these classes? You should be in touch with local gyms to see if they have need for this or would be open to this.

Another route you might want to consider is making some Youtube videos of your routine and then posting them on Youtube. Such videos would launch a small revenue stream for you from the advertisements plus serve as a supplement for your classes, as you could give the Youtube channel to the people in your class if they wanted to work on things while not in the class.

Q8: Distracting websites

In the notes before the Q&A you mentioned websites being a big distraction. Which ones do you read most often? TSD is about the only one I’ve found I read with an real regularity and I know there are other gems out there!
– Talia

Honestly, my biggest distraction is social media. I love reading through sites like Twitter and Facebook and Instagram with a focus on topics that are most interesting to me. I also visit hobby sites focused specifically on my hobbies of interest, such as BoardGameGeek.

With the social media sites, I have honed the people and pages that I follow down to a trim list that’s very much catered to my own personal interests. That takes time and it also takes some effort in checking out lots of different people to see what they’re posting and sharing.

I do visit other sites for long-form reading, such as The Atlantic and The New Yorker and the New York Times, but those visits usually just involve bookmarking stuff to read later. I usually talk myself out of reading long articles when I’m supposed to be doing something else, so I just bookmark the interesting articles using Pocket and look at them later on.

Q9: Income tax deduction question

I was making self payments to Blue Cross health insurance fund that was through my now deceased husband’s union. I always filed with H&R Block, but they never filed this in my returns. Is this a valid deduction; and what options do I have?
– Carla

If you paid for these premiums out of pocket, which it sounds like you did, then it’s very likely that they’re tax deductible. However, unless you have a lot of other deductions, doing so would probably not make much of an impact on your income taxes, as you’d probably take the standard deduction anyway.

So, let’s back up and explain what that means. The federal government essentially gives everyone two options when it comes to deductions on their taxes. They can either submit a list of deductions and then deduct the total of those deductions from their income (and pay taxes only on the remainder of their income) or they can choose to not submit a list at all and take a “standard deduction,” which is a dollar amount around $6,300 for a single person, subtracting that amount from their income and paying taxes only on the remaining income.

So, if your total deductions do not add up to $6,300, you’re better off taking the standard deduction, which is what many people do, especially those without a high income and those without an active mortgage (because mortgage interest is deductible).

Unless your annual premiums that you paid out of pocket added up to that amount and you had lots of other deductions, it probably wouldn’t help with your taxes. If that did describe your situation, you can contact H&R Block about filing an amended return for those years. You have a three year window for doing this, so you can only file an amended return for the previous three years.

Q10: Homemade laundry detergent recipe

I’m just reading your segment regarding buying store brand vs. name brand which led me to explore your recipe for homemade laundry detergent. Have you investigated the “filler” aspects of your ingredients. Last I knew Oxiclean was a no-no.
– Jim

Over the years, my recipe for my homemade laundry soap has changed. Right now, my homemade soap consists of a cup of borax, a cup of washing soda, and a cup of dry soap flakes, which can be obtained either by grating a bar of soap or just buying a bag of soap flakes at the store. I combine those three ingredients in a jar and mix it thoroughly, then just use a tablespoon of this mix with each laundry load.

This recipe seems to have the same effect as the laundry soap I once used. I don’t think the Oxiclean I used to use had much of an effect that I could notice, although I don’t think it was harmful.

I’ve been very happy with this laundry soap for years. It’s very cheap and seems to do a really good job on my clothes.

Q11: Worrying about stock market strategy

How do I stop questioning my stock market investment strategy? We turned it over to a financial guy several years ago and the plan was to go on autopilot with someone who surely was smarter than me in investments. However, his strategy is very conservative and protective of large drops in market. I have been measuring my investments vs s&p performance and they are off 15% or more. I.e. the s&p is beating my guy my 15%. This bothers me to no end. I turned it over to stop worrying and trusted his recommend strategy. But it’s not working as I’m worrying just as much as when I was picking the strategy.
– Mark

You made the choice to go with a less risky strategy, which means that it’s going to lag behind the S&P 500 when the S&P 500 is doing well, but it should beat the S&P 500 in years when the S&P 500 is doing terribly, like 2008. Imagine that you took your investment money and put half of it in the S&P 500 and half of it in a savings account bearing 1%. In a year where the S&P 500 went up 11%, your overall investments would go up 6% – half would go up 1% and the other half would go up 11%. However, in a year where the S&P 500 lost 19%, your overall investments would only drop by 9% – half would go up 1% and the other half would go down -19%, averaging out at -9%. You’re worse off with an investment like that in good years, but better off in bad years.

Now, which one is “better”? It’s impossible to know because no one knows what the future holds. I don’t know what the stock market will do next year. Neither do you. Neither does the guy running your investments. What he’s doing is simply hedging his bets. If it’s a bad year, it won’t be as bad for you, but if it’s a good year, it won’t be as good for you.

The thing is, your investments will never be “perfect.” I’m pretty sure you can easily find an individual stock that has done way better than the S&P 500 over the past year. Why didn’t you invest in that stock?

The reality is that you have to invest in a way that’s “good enough” and won’t keep you up at night. That means coming to peace with how much risk you can stomach. Could you handle being in the S&P 500 in a year like 2008, where the market drops by 40%? Imagine losing 40% of your investment over the course of a few months. That’s part of what you’d have to accept if you went with the S&P 500 instead of the more conservative route.

Honestly, for me, I don’t really care. I’m in this for the very long haul – 20 or 30 years. Given that, I’m better off staying in more aggressive investments for a very long time. I don’t worry about what it’s doing today or this week or even this year. It doesn’t worry me at all because I’m not going to touch it today or this week or even this year.

Q12: Sitting on future investment money

Let’s say I’ve got 10,000 dollars sitting in a money market acct.

I’ve been keeping it there, waiting for a good drop in the market to put it in an index fund.

Then i began wondering, maybe i should just put it in the market because while i may not “earn” anything from stock price increases for a while, i still would earn money from the disbursements of dividends that the mutual fund hands out every year.

So I would be earning a lot more money then just having it sit there in a money market account.

Is my thinking correct or flawed?
– Stan

Your thinking is correct. If you’re going to invest in stocks, you shouldn’t bother with market timing at all and put your money in immediately. That’s the option that has the best long term prospects, period.

Not only are you missing out on dividends by waiting, you’re also probably missing out on the “best moment” to invest, too. It’s really hard to tell when the market is at a bottom and if you wait around for the perfect moment, you’re going to wait forever.

If you’ve made the decision to invest long term in the stock market, put your money in now, not later.

Got any questions? The best way to ask is to follow me on Facebook and ask questions directly there. I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive many, many questions per week, so I may not necessarily be able to answer yours.

The post Questions About Retirement Savings, Distraction, Investments, Zumba and More! appeared first on The Simple Dollar.

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Savings update: no respite for last-minute cash Isa savers

Sylvia Morris

poor-savings.jpg

Cash Isa rates are tumbling as savers look to use their £15,240 allowance for this tax year which ends on Tuesday (April 5) or next year’s, which starts on Wednesday.

National Savings & Investments has announced it will cut the rate it pays on its popular Direct Isa to 1% from 1.25% for all savers from June.

The top rate on easy-access cash Isa is 1.4% from Coventry and Skipton building societies. But the new Skipton account, Bonus cash Isa, includes a 0.4 percentage point bonus paid for the first 12 months after which the rate drops to 1%.

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Scheme designed to bring affordable flood insurance launches

Helen Knapman

flooded-home.jpg

About 350,000 households living in high flood risk areas should now have better access to affordable home insurance.

About 350,000 households living in high flood risk areas should now have better access to affordable home insurance. 

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Four Ways to Use a Roth IRA That Have Nothing to Do With Retirement

The Roth IRA is one of the most widely touted retirement accounts, and for good reason. It’s one of the only accounts that offers tax-free money in retirement, and who doesn’t love that?

But what most people don’t know is that the benefits of a Roth IRA go far beyond retirement.

In fact, the Roth IRA is one of the most flexible accounts you’ll find, making it a great place to save money no matter what financial goal you’re working towards.

Here are four powerful ways to use your Roth IRA for something other than retirement.

Quick word of caution: While you can use a Roth IRA for ANY of these goals, you can’t use it for ALL of them at once. Every dollar can only be used for one thing, so be careful not to double count this money as available for multiple purposes.

College Savings

I often encourage my clients to max out their Roth IRA before contributing to a college savings account like a 529 plan or Coverdell ESA. Here’s why:

1. The tax-free growth is similar to what you get within a dedicated college savings account.
2. With a Roth IRA, you always can withdraw up to the amount you’ve contributed both tax-free and penalty-free, no matter the purpose.
3. You can also withdraw the earnings without penalty for qualified higher education expenses, though they will be taxed as ordinary income. (Your earnings are the amount above what you’ve contributed.)
4. Money within a Roth IRA is not counted when considering your child’s financial aid eligibility. (Though any money you withdraw from a Roth IRA for college will be counted as income in the next year’s financial aid application, which can hurt eligibility.)
5. If you don’t end up needing the money for college, you can simply leave it in your Roth IRA and use it for retirement.

In other words, a Roth IRA is a great way to save money tax-efficiently for college while maintaining the flexibility to use it for retirement if your goals or needs change.

House Down Payment

Your Roth IRA is also available tax-free for use as a down payment on a house, up to a point.

As always, the amount you’ve contributed is available at any time for any purpose, including a down payment.

But you can also withdraw up to $10,000 in earnings both tax-free and penalty-free if it’s used to purchase a home under the following conditions:

• The Roth IRA has been open for at least five years.
• You are a first-time home buyer, which according to IRS Publication 590-B means that neither you nor your spouse have owned a home within the last two years.

If you are married, your spouse can do this as well. Which means that you may have an extra $20,000 available to you.

Keep in mind that this is a lifetime limit, so once you’ve used the $10,000 exception, you can’t use it again.

You can withdraw up to $10,000 of contributions and earnings from a Roth IRA, tax- and penalty-free, for a down payment on your first home. Photo: House & Hammer

Emergency Fund

Ideally, you should have an emergency fund that’s separate from all your other savings accounts. That way you can use the money if needed without sacrificing your other financial goals.

But what if you simply don’t have enough money to both build an emergency fund and save for retirement?

In that case, a Roth IRA can be a great way to keep the money available for either need. Here’s how to do it:

1. Contribute to your Roth IRA.
2. Invest it in something very conservative that won’t lose value, like a money market fund.
3. If you have an emergency, you can withdraw up to the amount you’ve contributed at any time without tax or penalty. And because it’s invested conservatively, you know the money will be there if you need it.
4. If you never have an emergency, the money can stay in the Roth IRA and grow for future use.

It’s a great way to make sure the money is available if you need it without losing that valuable Roth IRA space.

Launchpad for Your Child

Here’s a great way to give your child a head start on their own financial freedom:

1. Encourage her to get a job or even start a mini business.
2. Agree to match some percentage of her earnings with contributions to her own Roth IRA.
3. When she’s an adult, she’ll already have some tax-free savings built up and it will be because of her own hard work!

Moral of the Story: Use Your Roth IRA!

The deadlines around contributing to a Roth IRA are strict. You have until April 15 to make your contribution for the prior year, and after that the opportunity is gone.

So the main point here is this: Contribute to your Roth IRA, even if you don’t yet know what you’ll use the money for.

There’s so much flexibility built into the Roth IRA that there will always be a good use for the money. And the tax breaks are so great that you don’t want to miss out.

So, what are you waiting for?

Matt Becker is a fee-only financial planner and the founder of Mom and Dad Money, where he helps new parents take control of their money so they can take care of their families. His free book, The New Family Financial Road Map, guides parents through the all most important financial decisions that come with starting a family.

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• Roth vs. Traditional IRA: Retirement Showdown
• Best IRA Accounts of 2016

The post Four Ways to Use a Roth IRA That Have Nothing to Do With Retirement appeared first on The Simple Dollar.

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