Got some extra cash, wondering how to utilize it properly? Well think no more; here I’m guiding you on how to use the extra money in several useful ways.
Be a Lannister
We all know the fact that a Lannister always pays his debts, and you should too. Using the extra money, accelerate paying off the debts, which are costing you higher interest rates such as student loans, car loans. Getting rid of these loans can save your hundreds and thousands of dollars.
Boost your 401(k) account
Gradually increase the extra amount of contributions in your retirement account, which would help you in securing your future. So using the extra money for your account should obviously be in your priority list. Managing your retirement account needs some important key factors; invest in some mutual funds which are less costly, it would help you to keep the stakes at low and do not panic if stock prices fall, these investments are for a long term so keep patience. Never borrow anything against your 401(K) account, slow but steady investments would obviously give you a kick in your future.
Taking precaution for the surprises
Everyone loves surprises, but some unpleasant surprises won’t notify you before coming. So, before it happens and you get puzzled in the middle of a crisis, why not prepare for it? Just keep away a lump sum amount of money for unexpected disasters and you are good to go.
Investing in insurance
Choosing a suitable type of insurance can keep away the danger of unexpected situations, there are several types of insurance policies available in the market:
- Life insurance: Your dependents would not go in vein financially, if you die.
- Health insurance: OBAMACARE act suggests having health insurance for everybody, nowadays health insurance is a legally required policy.
- Auto insurance: It is for the vehicle you are driving.
- Homeowners insurance: It is only applicable for mortgage holders.
- Renters insurance: It is only required when you are renting apartments
- Disability insurance: It will help you if you get injured and can’t continue working anymore.
Credit Card Debt
Just because the bank has given you a credit card, doesn’t mean you should overuse it and be in a great debt at the end of the month. Just use it when it’s necessary because a single credit card can cost you approximately 18% interest, you need to tackle these kinds of debts very carefully. So, using the extra money to clear the debt will get rid of many problems in your near future.
Stop wasting the money on unnecessary things; invest some money for you or your family member’s health. Some mere symptoms, now you might be reluctant about them, but those symptoms can lead to a bigger health issue, visit a specialist and undergo a thorough check-up for each member of your family.
Savings for larger investments
Planning to buy an expensive gift for someone special or a travel plan, or planning to buy a car for your own, or a countryside house? Start saving little from now on. Larger investments require more money, saving it from the beginning would make you feel glad at the time of requirement and won’t give you a big pocket crunch.
Start taking responsibilities. Education costs are increasing day by day. Start by opening a suitable savings account and start putting money in it. Before opening the accounts, please go through with all the conditions, like as an example, if you open a 529 account, then you would have a tax benefit and can have a limitation of saving a certain amount of money each year. Go to your nearest bank and have a discussion about it.
Investing in own self
Self-love is necessary. We buy expensive dresses, accessories to look good, but if we invest that kind of money in other aspects, then we can be profitable in many ways.
Education has no limits. Join some new course which you find fascinating or start by engaging yourself with a new language learning course.
A gym membership would also be a great investment. Taking good care of yourself does not come handy, but if you start now your future self will definitely thank you for this.
Consider another retirement plan
Some say that one retirement plan is not enough for your future. Use this extra cash to open up other possibilities as well. Invest in another retirement plan. It would be great, if you can set up an auto-deducting option, so your savings plan would grow each year.
An essential point to remember is that you may have started earning extra cash but that does not mean that your expenses would be extra too. Maintain your daily expense, if possible jot it down somewhere, and decrease the chances of spending excess money somewhere, thus you can have some extra money in the future.
Jason Mandy is an owner and content writer of personal finance blog of moneybumper.com.
He believes his previous five years as a sales manager selling health products to the medical industry were an ideal foundation for his work as a financial advisor.
Attention to detail, good listening skills and great empathy are symbols of his appreciation by his clients. He is effectively supported by a team of administration, group benefits and investment products specialists whose teamwork and professionalism help him build long-term relationships with his growing client base and provide excellent customer service.