If you came into an extra $1,000 what would you do with it? Some people will go on a shopping spree and purchase all of the items that they couldn’t afford otherwise. Others will take a trip to the casino, hoping to double their money. If you want to spend you financial windfall responsibly, there are a few ways that you should consider spending your money.
Meet Your Employer’s Retirement Match
If you have a retirement account and your company offers to match what you put in, use your $1,000. This will allow you to double your money with no risk. This is not a return that you can get in the market. You may not have the money to spend now, but you will have twice the amount to spend when you retire.
Open an Individual Retirement Account
If your employer doesn’t offer a retirement program, you should consider opening up a Roth IRA or a 401K. If you put the money into an account early in adulthood, you can earn interest on it year after year. Rather than spending your money in one day, it will grow over time.
Pay Off Your Debt
If you have an extra $1,000, it is a great idea to pay off your credit card debt. The longer you hold onto the debt, the more money would need to be spent each month on your interest fees. If you are going to start paying off your credit card debt, pay off the one with the highest interest rate first. If there is any money leftover after that card is paid, put it towards another one. If you don’t have any credit card debt, you can start paying off bills that have been sitting around for a while. For example, if you have a medical bill from 6 months ago for $80, pay it off. If you have an old cell phone bill, pay that off too. Go through all of your bills and get them all paid off so that you can start fresh.
Build Up Your Emergency Fund
Things come up all the time and you aren’t always prepared for them. This is why many people have an emergency fund. If you don’t think that you have enough money saved, put your money in the bank. You will be happy you did if your car breaks down or if you suddenly need to take time out of work.
Pay Down Your Student Loans
If you currently have a student loan, use the money to pay down your debt. The sooner your debt is paid, the better you will feel. You may not get the instant gratification that you desire if you use the money to pay down your student loans, however, it will be worth it when the loan is paid off sooner than you expected.
Invest in the Mutual Funds
If you have already paid off your student loans, your debt, and you have an emergency fund that you feel comfortable with, you should invest in mutual funds. Some people will invest in a particular stock. This is a mistake. It is like putting all of your eggs in one basket. If the stock fails, you lose your money. Mutual funds provide diversification that you will need to be sure that your money is going to grow over time.
Take a Class
While paying to take a class won’t put money in the bank to earn interest or double your money, it will still be an investment for the future. Furthering your education makes it possible to get higher paying jobs. This will give you much more money in your pocket than the interest earned in a bank. You can make thousands of dollar more each year if you get the necessary education. You can triple or quadruple your investment when you start your higher paying job.
Attend a Professional Conference
If your company is holding a conference but they expect you to pay, you should consider using your money to attend. The $1,000 should cover the cost of travel and lodging, and it will give you a chance to meet people in your field and learn from the leaders in your industry. These conferences can be a huge boost in your career. The better things are going with your career, the more money can be made.
Make Home Improvements
If you have been putting off minor home improvements due to lack of funds, this is the best time to get them done. If you spend the $1,000 now to make the necessary repairs, it can save you a much larger cost in the future if you let the problem go.
Take a Vacation
Spending your money on a vacation may not be the most frugal way to spend your money, however, it could be exactly what you need. If you are exhausted from the pressures of work, family, housework, and social obligations, it can create a great deal of stress. If this is the case, the best way for you to spend your money is to take a relaxing vacation. When you come back, you will be rejuvenated and revitalized to get back to your life. If you feel a disconnect in your family, take a family vacation to get your family back to where it should be. There are some cases where not spending wisely is the best option.
An unexpected payment of $1,000 may not seem like much. If you know how to spend it, however, it can make a huge impact on your life.