published sept. 26, 2022.
Tips to help you handle a bump in cash on hand.
Seeing more money in your bank account is a great feeling.
Whether it’s from a pay raise, tax return, finally paying off debt, or even winning the lottery, you’ll want to make a plan for it.
Deciding where it should be in your budget can be a complicated decision. We have a few suggestions that can help you put it to work.
Start your emergency fund.
Having an emergency fund ensures you’re financially prepared for unexpected expenses.
Setting that money aside in a savings account designated for emergencies can help prevent you from dipping into it for other things.
Find a savings account with a high dividend rate so it can earn money for you until you need it.
Set savings goals.
Extra money can help you get to your savings goals quicker. Those goals could be a new car, a home remodel, a vacation, or tuition. The options are endless. If you want to save for multiple things at once, you should consider bucketing your money.
Make your money grow. Depending on how much you want to put away and how long, that extra money could make a great certificate deposit, IRA contribution, or other investments.
“Paying down debt with extra funds can free up more money in your budget later.”
Pay down debt.
Paying down debt with extra funds can free up more money in your budget later. Throwing extra payments at debt can help you save on accumulated interest charges. Once that debt is crushed, you have even more extra money that used to be that monthly payment! Paying off more debt is a great time to revisit this blog too, so you can make that money work for you twice.
Pay it forward.
It can be as small as paying for the next person in line’s coffee or making a large, tax-deductible donation to your favorite local non-profit. Helping others can be the bright spot they need in their day.
It’s okay to spend money on the things you like. That can look like a nice dinner, buying a new pack of baseball cards, or taking a day trip.
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