As 2023 comes to a close, many Americans are looking towards 2024 with hope and optimism, especially in terms of their finances. The past year has brought inflation and interest rate hikes that have negatively impacted their financial situation. However, there is now news that inflation is cooling down and interest rates may soon decrease, giving Americans reason to be cautiously optimistic.
For savers, there are several avenues to explore in order to protect and grow their funds in the upcoming year. It is important for savers to be well-informed and flexible in their approach. Here, we will break down three effective ways to save money in 2024 that individuals can start working on in the final days of 2023.
Firstly, opening a certificate of deposit (CD) account is a great way to boost one's savings. Even though forecasted rates may fall in 2024, by opening a CD now, individuals can lock in one of the highest CD rates in years. This means that even if interest rates decrease in the future, they will still earn interest at the higher rate until the CD's term expires. Additionally, early withdrawal of funds from a CD comes with a penalty, which can serve as motivation to leave funds untouched and continue growing at the higher rate.
Secondly, opening a high-yield savings account is another way to save more money in 2024. These accounts offer interest rates comparable to the best CDs, thanks to inflation and the higher interest rate climate. By transferring funds from a regular savings account into a high-yield account, individuals can earn more interest in the interim. Compared to the low rates offered by regular savings accounts, individuals are essentially losing money by not taking advantage of high-yield savings accounts.
Lastly, refinancing a mortgage may be a viable option for homeowners to save more money in 2024. While mortgage interest rates are still elevated compared to previous years, they may now be low enough to justify refinancing. Even a small decrease in interest rates can result in significant savings. Additionally, refinancing can help eliminate private mortgage insurance (PMI) that was added to the loan when less than 20% was put down as a down payment. Homeowners can also switch from an adjustable-rate mortgage to a fixed-rate mortgage for more predictability and potentially lower rates.
Overall, there are many ways to save more money in 2024, and the best approach will vary for each individual. Opening a CD or a high-yield savings account, refinancing a mortgage, or exploring other options are all potential avenues to explore. It is important to start researching and taking action now in order to maximize savings in the upcoming year.
