If you have any money in savings, you’ve probably noticed that it isn’t gaining much interest in recent years. Savings account rates are at all time lows. Hell, if they went any lower, the banks would need to start charging you money just for having a savings account.
With savings account rates seldom topping a measly 1% these days (unless, of course, you have your money in a high yield savings account), it begs the question, “Is it even worth it to put my money into a savings account, or should I go ahead and spend it?”
As much as we hate to admit it, you may be better off to go ahead and spend your money, as long as you’re spending it on things that will have value down the road. Frankly, the annual percentage yield of most savings accounts doesn’t keep pace with the devaluation of the dollar anyway.
This is especially true for big ticket items which are bought on credit. The one bright spot of interest rates being so low is that loan rates are also quite low. While it’s a well known fact that it’s hard to get credit in this market, those who have solid credit established are able to enjoy rock bottom rates.
What this means for the average consumer is that, while it may not be the best time in the world for savings account rates, it is a great time to buy large items like:
- A Home. Not only are the interest rates on mortgages as low as they’re ever going to get (if your credit is good, anyhow), but the actual prices of homes is rock bottom right now. Additionally, there are many foreclosed homes for sale which can often be picked up for peanuts.
- A Car. Again, loan rates are low. Additionally, if you keep your eyes open and choose your moment, you can often take advantage of government programs designed to stimulate the auto industry.
- Investment Property. Property is available, and it’s cheap, cheap, cheap. If you’re in the position to buy investment property, do it. Whether you invest in apartments, offices, or some other type of investment property, you will never see a better chance to get into the real estate business any cheaper. And you can rest assured, the value of real estate will eventually start going up again.
