Adulting, Features, Life Advice
Got an extra $1,000? Here is what to do with it.
So you just been gifted or earned an extra $1,000 and you have no idea where to put it or how to spend it. I got you covered. Before your drop it on shoes or clothes, there are many different ways you can invest it!
Use your money wisely and plan accordingly. Keep reading to discover 5 simple ways to invest your newly acquired $1,000. If you are reading this article and want to add more ways to invest a G, let us know in the comment section below.
#1. Pay off High-Interest Debt First
Debt is no fun. In fact, the more debt you have the harder it is to get out of it! Some debt is good to have like a home mortgage or business debt, but bad debt can wreck havoc on your finances! Even if you have good debt, be smart! Make sure you have enough income to pay your debt off and develop a budget to pay it off sooner!
When we talk about bad debt, we are talking about consumerism debt! Typically, consumerism debt comes with high-interest! High-interest debt is a whole other animal. High-interest debt will cost you money. Meaning if you don’t pay off what you owe in full in a month, you will be charge interest. The end result is accumulating more debt! You must pay off acquired interest. Think about having a hole in your wallet. No matter how much money you stuff in there, you are still loosing money! That is what high-interest debt is. It is a viscous cycle that you don’t want to get caught up in.
Get off the hamster wheel and pay off your high-interest debt every time you get extra money before you do anything else.
Did you know the average American has $90,460 in debt? Ouch.
Start or Add to your Goal Fund
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Do you have an emergency fund? If you don’t have one you should get started now! An emergency fund is a savings fund that you can use when an accident or emergency happens (i.e. you need to replace your car tires pronto). Financial experts recommend that you have at least 6 months of expenses saved just in case you fall on tough times. My grandma always say it is best to save for a rainy day.
The good news is you can use your extra $1,000 to jumpstart your emergency fund.
Ash Exantus, popularly known as Ash Cash, a leading financial expert, doesn’t believe in saying the words emergency fund. He believes in calling this type of fund something else to manifest a more positive outcome. Words have power! Call your emergency fund something that relates to you or your purpose. Call it something fun to keep you motivated!
Purchase a Online Course that will Level up your Skills!
I firmly believe in taking courses and certification courses to boost your knowledge and hone in on your skills or learn a new one. There are many different courses online to choose from! You can take one for a hobby or you can take certification course to boost your income and level up! Now is literally the time to become qualified and to become an expert on whatever subject you fancy. The cool things about courses and certifications is that you don’t need to take out a loan to take one! It isn’t like applying to college or to go get your masters.
The money that you spend on the right course will help you in so many different ways.
Beef up your savings with that extra $1,000!
We talked about an emergency fund earlier but in this section we are going to talk about savings. That is right you need and emergency fund and savings. It is best not to put all your money in one savings vehicle. I believe that everyone should have a general savings account that is easily accessible. Whenever you are short in cash you can take money from your general savings.
Now to keep money in your account, never take money from a fund that you don’t need. Your emergency fund is for emergencies only! Your travel fund is for traveling only! Understand?
Get in Shape
What better way to invest in yourself then to invest in your health! Use your extra $1,000 to purchase a new gym membership, exercise equipment, or simply try a wellness retreat. If you don’t think investing in your health is a good investment consider this: Heart disease is the leading cause of death in America. The best way to prevent heart disease is to adopt a healthy lifestyle, eat better-for-you-foods, exercise, and destress. If you aren’t spending money towards your health, you are spending money against your health.
Heart disease isn’t the only disease that is finding its way to Americans’ heart. Americans are at high risk for obesity as well. With obesity comes with many problems that can lead to serious complications and death. Obesity affects children, adults, and seniors no matter what back ground they come from. Make a plan for your health and use your money wisely!
My sister always says it is better to spend money now on your health then to spend later on medical bills and prescription pills especially when you have the power to take control of your health.
Honorable mention: Opening up a IRA or Roth IRA
IRA stands for individual retirement account. -Funds go in pre-taxed. Roth IRA was named after senator William V. Roth Jr. of Delaware. -Funds go in after taxed.
If you are between the ages 22-27, you need to open up an retirement account. It is best to start savings for retirement earlier rather than later! Use this $1,000 to get you started on saving for retirement. You don’t want to keep working a full-time job in your sixties or seventies, that is no fun! The good news about opening up either one of these accounts is that they are easy to open and easy to start saving.
The type of IRA you want to open up depends on your lifestyle and what goals you want to accomplish. Research and talk to your bank about which account is best for you.
In this article we talked about three different types of savings accounts! I hope you wrote down some notes or took screenshots!
