Ask practically anyone and they will tell you that having extra cash to spend on whatever they want is more a dream that a reality. Every once in a while however, due to a tax refund, inheritance, Insurance payment or whatever, many of us find ourselves with extra money that isn’t earmarked for some type of payment, bill or other expense.
Unfortunately, the vast majority of people who find themselves in this situation do one thing; spend all of that money. Even worse, it’s usually frivolously or on things they simply don’t need.
If you’d like to do something besides spend that money, and possibly use it to make even more money, below are 4 things that you can do. Enjoy.
1) Invest your money into…anything. Stocks, bonds, EFTs, an IRA, or or the 401(k) that you have at work would all be excellent alternatives to spending all of that money on stuff that, let’s face it, you won’t even be using in 2 or 3 months. Put it into a long term investment however and, someday, you’ll have a lot more money to spend on something more important.
2) Pay down your high interest debt. If you’re like most American consumers, you have at least one credit card with a ridiculously high interest rate, and over $2000 worth of debt sitting on that card. If you pay that card down you’ll not only get out from under that debt but save yourself a lot of money in interest over the next few months or even years.
3) Use the money to pay for home repairs or improvements. Just like putting that money into an investment, investing in your home by either repairing it or improving it is also a great idea. If you own your own home it’s the biggest investment that you have, so using that money to increase that investment makes a lot more sense then spending it on something frivolous.
4) Spend some of your money. Remember, we said these are the Top 4 things to do with a windfall besides spend it all. But hey, it doesn’t hurt to spend a little bit of that money on something frivolous, or to have a little bit of fun. Depending on how much money you got back you might want to buy yourself some new clothes, go on a mini vacation or a a treat yourself to a spa day. The point is, if you spend a little bit of that money and it makes you happy, you won’t resent the fact that you put the rest to better use.