? on how best to invest $1500

[pandora174]

I would love some advice as I really don't know where to start. I'll be getting a decent bonus this year. So I sat down with DH to crunch the # on our budget for this extra $

* We want to pay off our 2 credit cards ($600)
* Pay off 2 QVC flex pay accounts ($400)
* Our dog needs a full dental cleaning (approx $300)
* $1500 for emergency savings
* $600 for Christmas presents for DH myself (I already bought all DS's presents) So I thought I'd get a color Nook for me & DH a Netbook !
* $600 toward vacation fund this Chirstmas (hotel & tickets paid for already)


* Leaves us with another $1500 to invest or put in some type of account. I have a 401k I contribute regularly but I am totally lost as to what to do ? Any suggestions on where I could get the best return or interest or where to even start would be some good advice right now ? I am not great on finances so any suggestins are really appreciated

 

[pearlieq]

If the $1500 you've already got budgeted for emergency savings would be your entire emergency fund, I would probably add in the other $1500. Emergency funds can disappear quickly--having $3000 would get you through most major house or car troubles or help you supplement unemployment for a couple of months if one of you lost your job.

Another good option would be a Roth IRA. You could put $1000 into opening one with T. Rowe Price in a targeted date fund. Their minimum purchase for an IRA is $1000 and the fund is a low-cost, "set it and forget it" type retirement fund where you just pick the one with the date closes to when you want to retire.

Put the $500 in savings and work on getting it up to $1000, then you can open another Roth IRA so you both have one. You can also set it up to automatically take money out of your account to invest every month so you can keep growing your retirement savings.

Good luck with whatever you pick. Congrats on getting such a great bonus!

 

[DawnM]

We tend to be conservative with our savings/investments. We have a money market account with Fidelity and put $$ in there for our savings/emergency fund. If it isn't in our regular bank account I am not tempted to spend it as I don't see it!

You didn't really say what kind of emergency fund you already have, but I agree that if the $1,500 you are putting in there is the only amount you have, I would put the entire $3,000 in a money market type account and start building to 6 full months of savings in a fund.

Dawn

 

[abmitch01]

I'd put it into a Roth IRA with an index fund with Vanguard

 

[heathrow42]

Agree with previous posters -- if 1500 is the total in your emergency savings you might want to add the remaining 1500 and work on getting it up to 6 months worth of expenses. If your emergency savings is set - then look at an IRA. Vanguard is great, but they have high minimums, I think 3000. Check out Sharebuilder - they are owned by ING, and I don't think they have any minimums on the IRA's - also because they don't have minimums you can also add money here and there throughout the year up to the maximum contribution limit for the year. Also be sure to check out which IRA is right for you - if you make over $120000 or you and DH together make over $177000, you aren't eligible for the Roth IRA and you would have to do a traditional IRA. You should check with whoever does your taxes to be sure. (or you know.. google it!)

--h