What is the best thing to do with extra money? 5 ways to bring more freedom to your life.
What is the best thing to do with extra money when it turns up in your wallet or bank account?
What you decide to do with this spare cash could make or break a number of your life goals.
As they say, every little helps, so figuring out what jobs this extra cash flow can accomplish for you might help it disappear on stuff you don’t need or want.
Having a few simple ideas or a basic plan can help make sure that what you do with spare money has a short and long-term compounding effect on you and your family.
Below are a few ideas for what you could be the best things to do with extra money; they just all depend on what is the best thing for YOU at a particular time.
Get rid of any heavy loads
One of the first things to think about doing is getting rid of any dead weight.
In this case, high-interest debt.
This is a dead weight that you are carrying around with you.
I know you may miss it once it’s gone, but it may well be the biggest leak you have in your finances.
Using spare cash to get rid of your bad debt (expensive debt) will be a much faster path to financial freedom than nursing it along or, worse still, taking on more bad debt!!
It’s going to be difficult to climb that mountain, swim that sea or fly off into the sunset when you have rocks in your pockets.
It’s also challenging to make work optional when you have lots of debt you need to pay off.
Put a plan together to tackle your debt and free yourself from this dead weight.
Read more here: How to get rid of debt. 5 ways to make it happen.
Build a huge moat
What to do with cash right now might be to build a huge moat around your life and family that nothing could get through.
What an actual moat? I don’t think the neighbours will go with that!
No, not an actual moat around your house but a metaphorical one, i.e. in your mind.
The sort of projection no marauding army can get through to destroy what you have.
In this case, we are talking about protection to keep you and your loved ones safe.
It could be in the form of an emergency fund or taking up relevant insurance.
A well-stocked emergency fund of 3-6 months’ worth of living costs could well help you ride out any kinks in the road, such as
- Redundancy
- Emergency car or house repairs
- Medical bills
- Last-minute travel
How would you sleep at night if you knew you had enough cash saved to ride any storm?
Probably pretty well.
Imagine having enough money saved not to need to work for 3, 6 or even 12 months.
You could take a serious break before you need to start thinking of earning money again.
Maybe not today, but one day, you might need to take time off for
- Learn something new
- Travel
- Make a career pivot
- Care for someone
- Ill health.
Imagine you could do that for a year without worry about money!
Pivot your life or career
If you had spare cash available, you could make some serious and lasting life changes with minimal risk.
Ever wanted to
- Retrain
- Change career
- Move to a different place
- Start over again
But found several things holding you back but especially the lack of spare cash to do it.
If you used your spare cash to start making small or large changes in your life, they could compound into amazing things.
You could use the spare cash to buy more pizza or:
- take that course you have always wanted to do
- learn that language
- go on that trip of a lifetime
- move out of a bad situation
- get that coach
Spare cash may help these life-changing events happen much faster and happen now rather than later.
Using spare money can also help reduce the risk if things don’t work out, as it won’t wipe you out.
Saving every month will create spare cash for you to use for a real impact on your life.
When you think about spare cash, think long term, not just immediate pleasure like food or clothes.
Create more money with your extra money
What to do with spare cash right now??
Make more money?
You could use your money to create more money.
Maybe you know there’s a qualification out there that you could get paid more money if you did it.
Or that if you had specific experience in a particular area, it could see you getting paid more.
Using your extra money to pay for qualifications or work experience could see a long-term boost in your future income.
Could you create a side hustle out of your knowledge skills, hobbies or interests?
- Is there something that you are good at that people know you are good at?
- Is there something you have skills in?
- Do a lot of people need those skills?
- Would people pay you to know more or get their problems solved by you?
Here are the seeds of your potential business ideas.
You could use your spare money for
- Coaching in the field, you want to do
- Courses in how to start a business
- Purchase a website and start selling things online
- Learn how to copy write and then write a book
- Learn how to sell
With your spare money, you could invest it in creating another source of income.
You can make this new income source as active or passive as you like.
Active means you are involved in its day today and have to show up in person.
Passive meaning more hands-off, possibly online whereby after some setup work it more or less takes care of itself, selling digital products like books and course, affiliate marketing or drop shipping items that.
Create more time
Yes, you could use your spare money to create more time in your life.
If you have spare money, it might mean that you could work part-time for a while or forever as you don’t need as much money.
Working part-time might mean you can get involved in projects that are more meaningful to you
- A side hustle
- Volunteering
- Training
- Caring
- Learn a new skill
Generally, most of us are exchanging our time for money, but if you didn’t need the money, you would keep more of your time.
Using your money to save you time can be a great use of spare cash.
You just have to make sure that the time-saving activities are positive ones and not just fast-food options.
If you had enough spare cash, you could take career breaks or mini-retirements to do the big things you have always wanted to:
- Take that road trip
- Visit the relatives in that far off country
- Build your own house
- Visit Disney land with the kids
All or some of these may become real options now you have spare cash.
Other articles about what is the best thing to do with extra money:
- What to do with extra money each month? 11 ways to make your spare cash count
- How much savings should I have? 4 ways to figure out if you have enough
- How to plan finances for life. 4 great ways to make a simple plan.
- What should I do with my money right now? A few ways to get the most out of your money right now and later.
- The importance of saving money. 3 reasons to start saving now
Summary: what is the best thing to do with extra money?
Having extra money each month is a good sign that you are living within your means.
Now you can use that spare money to accelerate you to your goals and ideal lifestyle.
Tackling the debt you have will be one good way to free you from the things dragging you down.
You won’t be able to create wealth in your life until bad debt is put in its place.
Building a huge moat or financial safety net will make life’s ups and downs much more manageable.
Having a well-stocked emergency fund will help prevent a crisis from turning into a disaster.
It also helps you sleep at night knowing you have it covered.
Spare money might also make that career or life pivot happen a lot easier or sooner than you thought.
If you have the money to make something happen, you can take those steps sooner than later and have or move closer to the job and life you want.
You can also use your spare money to create more money through investing in yourself or a business.
Completing a course could see you get paid more.
Starting that side hustle could see you create a small but growing additional income.
Using your spare money to create more time might be the ultimate use.
Having spare money can make part-time work more possible.
It can make holidays longer, sabbaticals and mini-retirements a real option because you don’t need the money for that period – because you have spare money that has set you free.
Anyway, those are my thoughts on what is the best thing to do with spare money; let me know yours in the comments below.
Thanks for dropping by.
Life and Financial Planning
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More of the same?
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