Bitcoin falling into water
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Investors continue to dive into cryptocurrencies, either to experiment with the new technology or at least hunt for massive returns. But all that money would probably be better off invested elsewhere.

Even after the volatility of the last several months—bitcoin, for instance, is down 40 percent since the start of 2018—cryptocurrencies still pique investors’ interest. That’s not altogether surprising, especially when you read about young people becoming millionaires and reportedly going on dates with Bella Hadid.

Indeed, two recent surveys point to millennials’ interest in digital currencies. Robo-advisor firm Swell found that 12% of those between the ages of 18 and 34 would buy cryptocurrency if someone gave them $5,000 to invest in an asset class of their choosing. Similarly, neobank Chime found that millennials invested in cryptocurrency at four times the rate than stock investments in 2017.

If you decide to invest in cryptocurrency, only use money that you’re prepared to lose. That’s true of any speculative investment, but particularly true in the topsy-turvy world of bitcoin and the alternatives. However, before you buy, here are some other ways you might consider spending the money.

“Putting money in cryptocurrency makes no sense if you don’t have emergency savings, are carrying high-cost debt, and are not contributing to tax-advantaged retirement accounts,” says Greg McBride, CFA and Bankrate’s senior economic analyst.

Bump up your contributions

If the money you are putting into cryptocurrency is discretionary, the best alternative would be to give it to your future self by increasing your contributions to a 401(k). By doing so, you’re not only looking out for the you of tomorrow, but you’re also lowering your taxable income today.

For instance, if you’re 30 years old, earn $40,000 a year, have $10,000 already in your 401(k) and currently contribute 3 percent of your salary to it, Bankrate’s 401(k) calculator projects you’ll have $278,875 at 65. (This doesn’t include a match from your employer or expected annual pay increases, and estimates an average annual return of 7 percent.) If you boosted your contribution by just one percentage point to 4 percent your projected return would increase to $336,239.

By the way, there is a good chance your friends are doing this already. In August, a Bankrate Financial Security Index survey found that 23 percent of all U.S. adults say they’ve ramped up retirement saving during the past 12 months.

Start growing a savings account

Is your safety net strong enough? Chances are it could be better. Before you buy cryptocurrency, make sure your emergency savings are solid. There is no better time to strengthen your savings than the present, since you never know when you’ll need it.

“Travel snafus, car accidents and medical emergencies are inherently unpredictable, and having the peace of mind to pay for the unexpected expense during such stressful situations is priceless,” says Andrea Woroch, a personal finance expert who is working with Marcus by Goldman Sachs.

The good news is that interest rates on savings accounts have risen pretty dramatically over the last several months, so you’ll be able to get some yield on your savings. Use online tools like those offered by Bankrate to find the best rate, too. With experts expecting the Federal Reserve to increase the federal funds rate again as soon as March, rates on savings accounts should increase more.

If you struggle with committing to saving money, there are also several apps designed to help you achieve your goals.

Tackle high-interest debt

If you’re carrying credit card debt, experts say getting rid of that should really be your top priority.

Develop a strategy for paying off high-interest balances and commit to your plan. If your credit card debt is spread out over several cards, be most aggressive in paying off the one with the highest interest rate. If your credit score is good enough, you might also consider combining various credit card balances into one debt consolidation loan with a lower fixed rate.

“Paying down existing credit card debt may not seem like much fun now, but doing so will help to alleviate the stress and the emotional effects of debt,” Woroch says. Such loans often have origination fees, so Woroch says to pay attention.

“It’s important to review the fine print and ask about potential fees upfront,” Woroch says. (Marcus is one of the few lenders in this space that doesn’t charge an origination fee.)

If you go this route, be committed to ending the cycle of relying on your credit cards. You don’t want to end up in a situation where you run up your credit card balances while still paying the personal loan that consolidated your last round of debt.

Up your career game

Again, if the money you’re planning to invest in crypto is truly discretionary, why not invest it in advancing your career?

Perhaps there is a conference where you can connect with people who might hire you and pay you more than what you’re making today. Or maybe sign up for a course on coding that could help you snag a big promotion.

“Look for programs at your community college or find out when and where the next regional conference in your industry is happening to start investing in yourself,” Woroch says.

Invest in other ways

Cryptocurrency investments should be part of a larger investment strategy, so you ought to look at other options, too.

“If you’re inclined to put money in cryptocurrencies, make it a small addition to an already well-diversified portfolio, not the foundation of your portfolio or a substitute for emergency savings, debt repayment or tax-advantaged retirement savings,” McBride says.

You could open an IRA to supplement the money you’re already putting away for retirement in your 401k. Much like savings rates, CD rates are rising, too. You might consider creating a 529 account for your children’s future education needs, too, McBride says.

You can also look to open an account with an online brokerage or robo-advisor, McBride says.