Invest Financial Planning

I Have A Savings Surplus: Where Should I Put It? 

HerMoney Staff  |  May 6, 2021

More than a year into the pandemic, many women have extra cash in the form of a savings surplus. Here’s how to put your money to work. 

After more than a year of no vacations, daycare expenses or extracurricular activities, many moms find themselves flush with cash in the form of a major savings surplus and wondering how to put it to work. Should they leave it in their bank accounts, try their luck with Bitcoin, or play it safe with an ETF or index fund? Moreover, do they go it alone or hire a professional?

Unfortunately, the answer isn’t clear cut. Your investment size, time horizon, and risk tolerance all play a part in dictating the best investments for you.

“It really depends on the person and their individual situation and what they are saving for,” says Stephanie Eikenberry, VP Branch Leader in Fidelity Investments’ Mount Pleasant Investor Center in South Carolina. Before an investor makes any other moves, you’ll want to make sure you have an emergency fund covering three to six months, you should look to pay down any high interest debt, and triple check to make sure you’re putting away enough for retirement. 


Once you’re all squared away with your financial basics, it’s time to think about the desired outcome for your investments. If your goals are short term in nature, your investment strategies will differ than if you’re investing for the long haul. 

Let’s say you plan to need your money in 12 to 36 months for a nice vacation or a down payment on a home. If that’s the case, it makes sense to keep it in cash in a high yield savings account, CD, or short-term bond, says Jean Wilczynski, a Senior Wealth Advisor at Exencial Wealth Advisors. You won’t get rich off the interest, but you won’t lose money, either. “Even if you get a half a percent with a CD, you’re better off doing that than dipping into the stock market,” says Wilczynski. 

CDs are also easy to buy. Almost every bank and credit union offers them. High yield savings accounts are paying similar rates, and are also simple to open through online and mobile banks. 


If your goals are longer term, it’s time to start investing that savings surplus. That’s where your risk tolerance and time horizon come into play. If the idea of losing any of your savings is unbearable, then less volatile investment vehicles may be best for you. But if you like to take risks and don’t mind potentially losing money, you can be more aggressive. 

For those who want a low-cost, straightforward way to invest, a popular option is exchange traded funds or ETFs. ETFs are securities that track an index, industry, or basket of stocks, and can be bought and sold like a stock. They are a cheap way to get exposure to the markets. There’s also a lot to choose from. You can play it safe with an ETF that tracks the S&P 500, or get risky with an emerging markets ETF. “The best way for the average person to invest money is to match the investments in the markets, and there are very inexpensive ETFs that will do that for them,” says Carol Fabbri, Principal at Fair Advisors. ETFs are easy to purchase through broker dealers, online brokerages, and mobile trading platforms. 

Target date funds, which get less risky the closer you get to retirement, are another popular option. In the fourth quarter, more than half of the females on Fidelity’s 401(k) platform had all their savings invested in a target date fund. For Fidelity’s 403(b) platform, it was 70%. 

No matter which way you go, Fidelity’s Eikenberry says to make sure you’re diversified in different asset classes. That will cushion the blow if one area of the market is suffering. “ETFs and mutual funds can have a place in your portfolio but the most important thing is the time horizon and risk tolerance,” says Eikenberry. 


Everyone’s heard the story of the novice investor who struck it rich from a high-flying stock or cryptocurrency bet. What people don’t realize is many others lose their entire nest egg when they make a similar move. And even those who succeed can face hefty capital gains taxes from the IRS. If you’re comfortable with that level of risk, buying shares in individual stocks or even testing the waters with cryptocurrency is OK. “If you want to take some money and see how it goes, it’s fine as long as you recognize it could go to $0 and you’ll have nothing,” says Wilczynski. “Set yourself a limit.”

Buying stocks is cheap and easy these days thanks to zero commission online brokerages, mobile trading apps, and robo advisors. You can open an account and purchase a stock within minutes. Many of these self-directed apps and platforms reinvest your dividends and manage your tax exposure automatically. 


If you’re investing a small amount or can afford to lose your savings surplus in the stock market, then a robo advisor or mobile app may be enough. If you have more complex needs or are in a later stage of your investing life, you may want to consider more personalized professional advice. A financial advisor can help you plan for the long-term by offering well thought out investment strategies that won’t expose you to a big tax hit. They have a wealth of knowledge and investment chops to back up their advice. Sure, it will cost you more than an ETF, but the payback can be worth it. Studies show financial advice can boost returns 1.5% to 4% over longer periods of time. 

And don’t be afraid you don’t have enough investible assets to warrant a helping hand. The truth is that investing even small amounts can pay off in a major way in the future, and the strategies and advice that are out there today can be helpful for even the smallest of investors. You just have to seek it out. “Women can be a little more intimidated by money than our male counterparts. I say to those women: Ask for help,” says Eikenberry. “There’s tons of tools on the web, and if you have questions about those tools reach out and ask for help.”

Editor’s note: We maintain a strict editorial policy and a judgment-free zone for our community, and we also strive to remain transparent in everything we do. Posts may contain references and links to products from our partners. Learn more about how we make money.

Next Article: