8 Smart Things to Do with Your Extra Money

This may not happen often, but when it does, you may feel on top of the world. We are talking about the extra money you have gained from a year-end bonus or as a gift from your parents.

Well, the extra money may raise several questions in your mind, especially you may get confused about what you would want to do with this. We have a list of ideas below that you can do with the extra money.

1. Clear Debts Faster:

It helps to clear the debts and loans you have to repay. Start from repaying the loans that have a high-interest rate. Paying it off in advance can save a ton of money; hence the money you used to pay off debts can generate more extra money by saving the interest money you were supposed to pay.

2. Check Tax Implications:

Before you plan on making investments, find out the tax implications the extra money may cause. This will give you a better idea to understand the best thing to do with the money and save extra taxes. If the money is received as a gift, then there are no tax implications on it hence read the rules clearly before making any investments.

3. Contribute More in Your Retirement Fund:

If you have set up a retirement fund, you would already contribute to it on a monthly or quarterly basis. You can always choose to add more money to this fund, which will only help you afford a better retirement lifestyle.

4. Increase the Emergency Fund:

Setting up an emergency fund is essential for those rainy days that may come. Add a part of the money to the emergency fund to increase the amount you can get hold of in case of an emergency.

5. Invest:

This is the obvious choice most people make with extra income. You can always use the money to invest in a volatile market such as the stock market to create a versatile portfolio.

6. Spend on Yourself:

It is unnecessary for you to only use the money to make investments or responsibly use it for your future. You can always use a part of the extra money to take a vacation, self-care, or have some fun by visiting the best escape room in Atlanta. In fact, you should definitely use some money on yourself as you deserve it.

7. Use It as a Seed Money:

Investment is not the only option to seek. If you have a business idea you wanted to implement for a long time but did not have the money to do it earlier, you can always use the extra money as the seed for your business. This is another form of investment which if succeeds can give you long-term returns for years.

8. Give Away:

Sometimes, it is not just all about you. If you have achieved abundance in life, why not share by giving some money away to a charity that supports your cause. Giving away money for a good cause will bring you a sense of fulfillment which none of the above-mentioned investments can.

The Bottom Line:

You don’t have to put all the extra money on just one cause. You can always split up the sum amount to invest in different areas. You can pay off all the debts, and you can use the remaining amount as an investment plan.