If you find extra money in your budget this year, chances are you will be tempted to use it. While it would be fun to use it to splurge on something that’s on your wish list, that’s usually not the smart thing to do. It’s better to spend the money on things you really need that could benefit you and your family.
Don’t worry, you don’t have to put it all in your savings account. While it’s always good to save up money for a rainy day, there are a lot of smart ways to invest your money, too. Although these purchases may not be fun and help you check things off your wish list, they can help you invest in your or your family’s future. These smart ways to spend your money will help you live a happier life knowing you are using your financial resources responsibly.
Pay Off Debt
If you want to have even more extra money to spend, pay off your debt. This is one of the smartest ways to spend money. For example, if you owe $3000 on a credit card and are sending the creditor $200 a month, why not use your tax return to pay off the debt? Then you’ll have an extra $200 a month. While you may want to spend that money on a new TV, clearing up $200 a month can make a big difference in your budget.
Insurance is one of those things you hope you never need, but it’s great to have when you do need it. You want to invest in a good plan that will help you should you ever need it. For example, no one wants to get sick, but having a good health insurance plan helps ensure that your costs are affordable. The same goes for auto insurance, life insurance, and home insurance. When you have a good plan, you’re better able to handle life’s unexpected events.
Invest in a Retirement Plan
A retirement plan is an excellent way to spend money. If you don’t want to work for the rest of your life, you need to invest in your future. You should have a 401(k) at work, if offered, and match anything your employer contributes. To take things one step further, also open an IRA. The amount you can invest each year will depend on your age.
Do Home Improvements
No one wants to buy a new roof or new windows until they absolutely have to. However, these investments can increase the value of your home. In some cases, the improvements can even also lower your electricity bills. For example, buying a new refrigerator when yours is 20 years old can greatly reduce your electricity bill. Spending money on your home can increase the resale value and become more of an investment instead of an expense when all’s said and done.
Invest in Education
Maybe it’s because I used to be a teacher, but I believe it’s always a good idea to invest in your education. It might be a class to learn a new skill for your job, a new degree to help you get a promotion, or maybe you want to learn something and start a new career. Whatever the reason, taking classes can be very beneficial and is worth the money and time. In some cases, your employer may even reimburse you for the classes you take so be sure to check with your company. Oh, did I mention you could get tax benefits, too?
Attend a Conference
Last, but not least, conferences are a great investment. Learn the latest information in your niche to help you become more successful on the job. You can meet so many new people and build your network. If you’re self-employed, it’s also a great way to spread the word about your business and meet potential clients.
What are some smart ways you like to spend your money? Let me know by leaving a comment below!