When you have extra money at the end of the month, it can be a surprising and exciting experience. Many people simply don't know what to do with extra money and end up spending it unwisely. Thankfully, there are ways you can avoid this mistake and invest in yourself and your future. We'll look at 20 different things you can do with extra money, including fun and serious steps.
20. Give It To Charity
Have you ever given a little bit of extra money to a charity and felt good about yourself? You should! Giving to charity is a fantastic thing to do for your soul, but can also be beneficial for your bottom line. How? You can write off charitable donations in your taxes.
These donations have to be fairly large to get you many tax breaks. However, it is worth giving a little money every month and keeping the receipts. Doing so can help you get some relief and ensure that you have a slightly better tax season.
19. Take Your Family Out to Dinner
Depending on how much money you have at the end of the month, you could always take your family out to a nice dinner. For example, imagine taking them out to the nicest place in town and feeling comfortable affording the best and tastiest meals.
This step is a good one to take for family morale and bonding. Family dinners give you time to talk to each other and interact in fun ways. While it's not exactly a wise financial investment, it is definitely a great investment for building a better and happier family.
18. Go on a Trip
When you have a little extra money at the end of the month, why not go on a trip with your family or partner? Jump in the car, book a plane trip, or even buy train tickets. There are many options that you can consider here, including seeing the ocean or visiting amusement parks.
While on a trip together with your family, partner, or by yourself, you can even look into various investments. For example, you might find real estate or other unique investments that you can consider. Always look for chances to improve yourself.
17. Spoil Your Partner
When was the last time you bought your partner something really nice that they wanted? If you're like the average person, you probably do it when you can but struggle to find the money. So, when you have some extra cash left over at the end of the month, buy something nice.
For example, you can buy your wife a new ring or your husband tickets to their favorite game. You can also spend money on doing something together, such as taking a kid-free trip while your parents or someone else watches the little ones.
16. Get Your Kids Something Fun
Do your kids want something nice but you just haven't had the cash to buy it? Buy them something fun or nice. Buying things for your children is an investment not just in them but in their future. It can also build a better and more positive relationship between you and them.
So, the answer to the question “what to do with extra money at the end of the month?” for your kids can include buying them new toys, upgrading their video game system, finding a new bike, or even booking various classes for fun activities.
15. Buy Something You Want
Spoiling yourself once in awhile is not a bad thing. Too few people take the time to give themselves the attention that they need to be happy. So why not buy something that you want for once? This step is probably easier if you're single, but can be done if you have a family too.
For example, you can take your extra money and buy a lawnmower or a new set of golf clubs. Talk to your family about this step if you plan on taking it. Make sure that you provide them with something nice later, such as a trip together somewhere fun.
14. Improve Your Home
Does your home need a little extra work to make it as comfortable and livable as possible? If so, you're not alone. Home improvement is a vital part of living a comfortable life but is often ignored by too many people. Thankfully, you can put your extra money away and save it up to make your house better.
For example, saving even an extra $200 per month can earn you enough to buy some new flooring for your home. If you have even more extra money, you could save up for extra carpet, new appliances, and much more. Make your home the comfortable place that you want and deserve!
13. Pay Off Low-Interest Debt
Now that you've had some fun, it is important to start taking your extra money seriously. In fact, you should really take these steps before having fun. For example, you can start paying off low-interest debt to ensure that you don't experience heavy bills later.
While you should never let debt stick around too long in your life, you can take care of it later after managing other investments. That's because those investments, such as bond payments, may help you pay off these low-interest debts more easily.
12. Kickstart Your Business
Now that we're on the more serious suggestions, it is important to think about things like kickstarting your business. For example, you may want to start a repair shop or something similar. You can take that extra money and invest it in your business, such as creating a business savings account.
Or you could take your extra cash and invest it in things like upgrades to your office area, new stock, and much more. Even a little extra money can make a difference for people who want to start a business, no matter if it's a one-person setup or a larger company.
11. Consider a High-Yield Bank Account
High-yield savings accounts are often a great option for people who can continually put good money into them. Typically, these accounts do require small fees, but you can get around them by continually putting more money into the account. Adding your extra monthly cash here may help.
Even better, some accounts will offer you various bonuses simply for signing up. These bonuses include things like a 10% extra value to your account when depositing a specific amount at a certain time. This can help you make even more money.
10. Buy Some Bonds
Bonds are often an underrated way to make extra money because they're not considered high-yield enough. However, bonds are typically among the stablest investment options and almost never plummet in price. Furthermore, you typically earn a fixed interest rate for the life of the bond.
Most people get interest payments twice a year, which increases their value and helps their bonds mature. You can take those payments and invest in other bonds or other types of funds. It is a good idea to scatter your low-risk bonds with some of the higher-risk options discussed below.
9. Try Out Mutual Funds
Mutual funds are a great option for diversifying your portfolio without going through the trouble of picking individual stocks. These funds include exchange-traded funds or ETFs that typically track the S&P 500 and earn good money on your investment.
Typically, they are purchased as shares and have real-time pricing, like stocks. That said, they are priced at the end of the trading day and are valued in dollars. They are a bit more volatile than bonds but not as up-and-down as stocks, making them a strong and balanced option.
8. Invest in Crypto
While cryptocurrency has become somewhat controversial in recent years, there's still a high potential in this field. It is important to talk with an investment professional about the risks and benefits of various crypto because there are so many options available.
That makes it hard to know what the next Bitcoin will be when investing. Investing in the right cryptocurrency could skyrocket your value in a way that Bitcoin experienced. Or it could plummet and leave you with nothing on your investment. Be careful and cautious with these purchases.
7. Consider Stock Options
Are stocks still a great investment when trying to decide what to do with extra money at the end of the month? Yes because stocks vary in many ways. For example, there are low-risk options that remain valuable and provide consistent yields, while others are much higher in risk.
It is important to work with an investment professional on this step. They can help you pick a strong and diverse profile that can withstand the ups and downs of the market. Understand that rapid increases and sudden plummets are common and to be patient with these changes.
6. Invest in Real Estate
Real estate is a smart investment option for many reasons. First, real estate prices typically increase, even after market furloughs. Even when prices are low, you can still make good money on real estate, such as renting a property to people and getting a consistent passive income.
Obviously, you can't buy a property with a little extra money at the end of the month. However, you can take that extra cash and invest in a savings account that you can convert into a down payment. Make sure you don't get in over your head and buy only a few properties to avoid over extension.
5. Put Down on a College Fund
While spending money on your kids for toys and other fun things is always rewarding, you should also put money into an account for their college. Even if they complain about not getting toys now, they'll appreciate having a good fund when they get to college.
Even a little bit of extra money is a great way to save because many college funds mature and earn interest. The options here are diverse and can make it easier for you to save. You might even funnel some of your other investments into these funds to help your child thrive.
4. Start a New IRA
Investing in a traditional or Roth IRA is a great way to save for your retirement. For example, if you've already matched your employer's 401(k) payments or don't have this retirement option, an IRA can help you save good money and fund your retirement.
Often, these contributions are tax deductible, meaning that you can write them off and save money on your taxes. Even better, you can get help setting them up from various investment firms that ensure you don't make a mistake. Even a little money at the end of the month can help.
3. Start Paying High-Interest Debt Accounts
If you have a high-interest debt that has been hounding you for years, start paying it off with your extra money at the end of the month. This step is important because high-interest debts can last for many years and can only worsen and even cause an endless payment cycle.
Some might even have such a high interest that paying the minimum payment only takes a small amount of cash off what you owe. As a result, it is important to pay these accounts off ASAP and to ensure that you have the stable and consistent funds that you need.
2. Increase Your 401(k) Match
If your employer offers a match on your 401(k), why not consider taking that extra money at the end of the money and putting it down on your 401(k)? Your employee will match at least some of that extra payment and will help you retire more easily.
This option is particularly great if your employer offers a full-match. So, if you put an extra $100 down, they'll match it with $100 and help you make an extra $100 per month. That's $2,400 extra added to your 401(k), only half of which you've paid.
1. Create an Emergency Fund
Emergency funds are one of the best things you do with extra money at the end of the month. This type of savings should include enough money to handle car repairs and medical bills or at least offset their heavy costs as much as possible. At least three months of your current bill level is suggested in an emergency fund.
In today's sometimes frightening economy, this type of emergency fund is vitally important. It can help you save for a rainy day or even a more serious situation that might affect your life in unfortunate ways. Thankfully, even a small amount in an emergency fund is beneficial.
You can also read:
Written by Allen Lee
Read more posts by Allen Lee