Do you have some extra cash in your pocket or bank account? Maybe you received an unexpected bonus and are now a few hundred dollars richer. Perhaps you got back a deposit, or applied for a cash loan, or maybe your budgeting is good and you have extra spending money each month: What should you do with it? Spending it on entertainment or leisure items may be fun, but there is a lot of good that money can do. Here are several examples of savvy ways you can use extra cash to improve your financial life.
1. End Bad Debts:
Get rid of those painful debts with steep penalties and high interest rates. Pay off any penalties and pay off any balances on less-than-useful debts like those on store or traditional credit cards. Not only will this keep future penalties from being a problem, but it will also help your credit improve. In the end, everyone wins. Even if you do not have any especially painful debts, consider putting that cash toward simple payments like auto loans or student loans.
2. Improve Your Assets:
Create extra value for your asset by modifying them in some way. For example, home improvement is one of the best investment options for a little extra cash, since home maintenance keeps or increases the value of your property. This will pay off when the time comes to sell your home. Car maintenance – although the investment is not nearly so useful – is also a good idea.
3. Invest In Your Family:
Consider putting the cash to work to pay for the education of your spouse or kids – an extra class or seminar can add job skills and life skills without costing too much. There are plenty of other family options, too, from paying for dental work and massages to buying new school supplies.
4. Create a Safety Net:
If you do not have an emergency fund set aside in your budget, create one. Have a few hundred (or few thousand) dollars in extra cash can be a lifesaver when life throws you a curveball. Save this money for unexpected auto repairs, accidents, fees, medical bills, and other things that are difficult to plan for. You may even want to create a separate bank account for this safety net.
5. Enhance Your Own Value:
Use the cash to help pay for education, online courses, or a seminar of your own. Every time you increase the number of skills that you have or your certification, you are increasing your own value. This can lead to major wins when it comes time for a new job or promotion. Who knows? You could also discover a new hobby or passion that will lead to greater fulfillment. So look around at interesting classes, meetings, groups, and workshops.
6. Save It for the Long Term:
Put the money in a retirement fund, a long-term college savings account, or a similar investment fund where it can start making more money and give you a reliable source of cash for the future. It is never the wrong time to invest in these long-term accounts.
Amy Fitzgerald is a professional blogger that provides financial advice and tips to consumers. She writes for TitleMax, a title loan company.