18 Smart Things You Can Do With Extra Money

Extra money is an excellent problem to have. But deciding what to do with extra money isn’t always easy.

That’s why in this article I’m going to show you 18 of the smartest strategies you can use to make the most of your extra money.

In fact, these are some of the same strategies wealthy elites use to grow their money and that many financial experts say you should consider doing, too.

So, if you’re looking for the best advice on what to do with your extra money, you’ll enjoy these expert tips.

Let’s get started!

What To Do With Extra Money [Definitive Guide]

 

What To Do With Extra Income

1. Increase Your Emergency Fund

An emergency fund acts as your financial buffer if you lost your job or had unexpected expenses like a home or car repair.

According to the Federal Reserve, 2 out of 5 adults would not be able to cover an unexpected expense of over $400 without borrowing money. That’s why you should have at least $1,000 saved for emergencies. Most experts recommend having a minimum of 3 months of your living expense saved.

But where should you keep your emergency fund?

It’s Simple… no, really… Simple is an online bank that has a high-yield checking account. Let Simple hold your emergency fund and earn up to 1.40%… that’s more than 20x higher than the average checking account. Simple will help you automate your savings, and they have an Emergency Fund goal feature built right in.

Let Simple help you bank, budget, and save your emergency fund.

Apply Now with Simple

2. Buy Rental Property

Investing in rental property is one of the best ways to build wealth if you do it right. I own a few rental properties, and they provide excellent cash flow. I also get nice tax benefits as a real estate investor. But besides the income and rewards from owning real estate, the idea can be daunting for first-time investors.

Roofstock is a real estate online marketplace that helps first-time investors evaluate, purchase, and own rental properties from anywhere in the world. Roofstock will walk you through the process from start to finish. Many of the rental properties you purchase on Roofstock have tenants already in place. You’ll start earning passive income the day you close.

Start building wealth through real estate with Roofstock. Check out available properties at the link below.

Viewing Properties with Roofstock

Best Way To Spend Extra Money

3. Take A Vacation

You probably made a lot of sacrifices for your extra money, including time off. The average American worker only took 54% of their available time off in the past 12 months. Taking time to recharge, even short vacations, can lead to measurable improvements in productivity and in your personal life balance.

Online travel websites make scheduling trips easy. Use Expedia to take a two-day trip and visit the Grand Canyon, one of the seven natural wonders of the world. Or spend family days at Myrtle Beach exploring and playing in the town’s attractions.

Plan a trip with Expedia today and have some fun with your extra money. Click the link below to get started.

Search Vacations with Expedia

4. Give to a Good Cause

Giving to others is very much empowering and, in turn, can make you feel happier and more fulfilled. One study conducted by the University of Oregon found that people who gave to charity had higher feelings of happiness and joy.

A good cause to give to (and I might be biased) is the Navy-Marine Corps Relief Society (NMCRS). Their mission is to provide financial, educational, and other assistance to Sailors and Marines in times of need. I can’t tell you how many times NMCRS has helped my Sailors either get home to see a dying family member or help with financial emergencies.

If you would like to give to the Navy-Marine Corps Relief Society, click the link below.

Give to NMCRS

How To Invest Extra Money

5. How To Invest In Stocks

The most common way to invest your money is with stocks. Investing in stocks is an excellent way to diversify your money. If you are a long-term investor, stocks could be a good investment even when markets are down. The market downturn caused by the coronavirus shutdown simply means that many stocks are on sale.

But how do you actually get started?

The book that helped me really understand stock investing was How to Make Money in Stocks by William O’Neil. The book changed how I approached stocks. I like how the book provides a 7-step process for minimizing risk and maximizing gains. It’s filled with proven strategies for finding winning stocks before they increase in price.

Anyone can learn how to invest in stocks with this bestselling investment system! Click the link below to get started.

Buy How to Make Money in Stocks

6. How To Invest In Real Estate

Real estate can be very lucrative when done right. But real estate can be costly (if not devastating) when done wrong. This is why you need to educate yourself before you start investing. But stay away from those ripoff real estate seminars because they’re worthless.

Most of the education you need can be learned by reading The Book on Rental Property Investing by Brandon Turner.  I read a lot of books on real estate investing, but this book is one of the best.  Brandon provides in-depth but straightforward advice and strategies for building wealth through rental properties. This book will teach you how to make an achievable plan, where to find deals, finding financing for your rentals, and more.

If you’re looking for practical, real-world advice for building wealth and passive income through rental properties, start with this book.

Buy The Book on Rental Property Investing

7. Save Money While Saving the Planet with Aspiration

Aspiration prides itself on offering socially-conscious and sustainable money management services and investment products. Their goal is to enable you to make money while making the world a better place. Also, with their Spend & Save account, you earn 1% annual interest, fee-free ATM withdrawals at Allpoint ATMs, and no monthly fees.

The one best thing about Aspiration is that they let you choose the fee. You can select how much in fees you want them to have each year. Don’t think Aspiration did an excellent job… set your fee to zero. Think they did an ok job, then pay what you think is fair. A portion of your fees is automatically donated to charity.

Make your wallet and the world even greener. Click the link below to open an account.

Open an Account with Aspiration

8. Automate Your Savings with Chime

Chime is a digital bank that doesn’t charge you fees on their checking accounts. Your account comes with the option to automatically round up your purchases to the nearest dollar and deposits the difference into your savings account.

What makes Chime different is that they are a mobile-only bank. Somehow they can offer fee-free overdraft protection (up to $100) and access to your paycheck 2 days early. Most banks hold your money to earn interest.

Make the switch to a bank account that has your back. Get started with Chime today.

Open an Account with Chime

What To Do With A Lot Of Cash

9. Pay Off Debt

Having debt is common. In fact, most Americans have some kind of debt. But having too much debt can put you into a financial disaster fast. If you have a lot of cash sitting on the sidelines, then consider paying down your debt effectively through debt consolidation.

By consolidating your debt, you could borrow money at a lower interest rate and pay off loans or credit cards that have a higher interest rate. This could save you money and pay off your debts sooner. Consolidating also means you’ll make fewer payments each month, reducing the likelihood you’ll forget and pay late.

Guardian Debt Relief specializes in debt consolidation and other debt-relief options. Contact Guardian at the link below to see if you qualify to reduce your debt.

See Your Debt Options with Guardian

10. Buy Low-Cost Index Funds

If you want to put your money to work in the markets but don’t want to spend hours analyzing stocks, then index funds are your solution. Index funds provide an easy, hands-off, diversified, and low-cost way to invest in the stock market.

But what index funds should you buy?

Personally, I only own five index funds that form a portfolio called the Golden Butterfly. In fact, the Golden Butterfly is the core of my emergency savings I have invested with M1 Finance. See for yourself. Check out the core of my emergency savings portfolio and see how it’s performed over time.

The only brokerage I use to manage my portfolio is M1 Finance. Their platform allows me to manage and grow my money the way I want. And they can do the same for you.

Make more, save more, and invest for free with M1 Finance, all on one easy-to-use platform. Click the link below and get a $10 bonus when you fund your account.


Invest with M1 Finance

What To Do With Extra Money In Your 20s

11. Build Passive Income

With passive income, you can make money while you sleep. But it takes time to build, which is why you should start young. Real estate is the best passive income generator. But if you’re young, chances are you probably don’t have enough money for a down payment on a rental property. This is where Fundraise can help.

With Fundraise, you can invest in real estate for as little as $500. You don’t have to be rich to start benefiting from real estate’s unique potential for generating consistent cash flow. Fundraise allows you to invest in real estate at a level previously reserved for wealthy investors.

Fundraise is your alternative to investing in the stock market. Check out what they have to offer.

Start Investing with Fundraise

12. Start a Retirement Account

Two common individual retirement accounts (IRAs) are traditional and Roth. Roth account contributions are made with after-tax dollars. This means your money will grow tax-free.

Using a Roth IRA is a smart move as a young investor. This is because your current tax rate is probably lower now than what it will be when you retire. So it’s best to pay taxes on the money now. This way, your investment can grow tax-free for decades.

You can maximize your retirement savings with a free Roth IRA with M1 Finance. And unlike other brokerages, there are no commissions or hidden fees.

Make more, save more, and invest for free with M1 Finance, all on one easy-to-use platform. Click the link below and get a $10 bonus when you fund your account.

Invest with M1 Finance

What To Do With Extra Student Loan Money

13. Stash it in a 5% High-Yield Savings Account

You should only use your student loan money for educational expenses. The last thing you need is more student loan debt when you graduate. The average person carries over $32,000 in student loan debt, with an average monthly cost of $393. So, limit your spending to educational expenses only.

But you shouldn’t just put extra loan money in a standard savings account either. According to the Federal Deposit Insurance Corporation (FDIC), the current average interest rate on saving accounts is 0.07%.

With Netspend, you can put your student loan money aside and earn a little something, too. You can earn up to 5% interest on the Netspend savings account with your first $1,000. You can even set up a direct deposit and have your student loan money go directly to your Netspend account. And Netspend will get you your money two days sooner.

Manage your student loan money with Netspend.

Sign Up Now with Netspend

14. Stash In a High-Yield Checking Account

Another option is to use a high-yield checking account to stash your extra student loan money. Consumers Credit Union pays one of the highest yields nationwide without sacrificing convenience. You can earn up to 4.09% interest on balances up to $10,000.

Although consumers’ interest rates are less than Netspend, their balance limit is 10x higher than Netspend. The higher balance limit allows you to save more money. The only catch is that there is a monthly spending requirement of $1,000 to maintain the 4.09% interest rate.

If Consumers fit your needs, open your account today at the link below and start to enjoy a great rate on a high yield account.

Open an Account with Consumers

What To Do With Extra Money in 529 Plan

15. You can give it to someone else

One of the benefits of the 529 plan is the ability to change the beneficiary to another qualified family member without tax consequences. This works out great if you have another child who will be attending college. Or maybe you want to help with K-12 private school for your nephew or niece.

The IRS allows one tax-free 529 plan rollover per beneficiary in 12 months. Keep in mind that the tax-free does not apply to state taxes. If you rollover to another state’s plan, some states require you to pay state income tax on previous contributions you received a deduction for.

To transfer beneficiaries, you have to open a new account and roll the old account over. Vanguard 529 saving plans is a great option to save and invest for your children’s future. They have low costs and easy-to-manage saving options.

Start managing your 529 plan better with an industry-leading Vanguard account.

Open a 529 Plan with Vanguard

16. Use it for your own education (or repay student loans)

You can use the leftover 529 plan money to go back to school and get your degree. Just transfer the beneficiary to yourself. Withdraw penalties won’t apply if you are named the beneficiary on the account. Make sure you save the receipts. And only make withdrawals to pay for tuition due during the same tax year.

But what if you’ve already been to school or have no desire to level-up your degree?

You can still benefit from the leftover cash. If you are like 1 in 5 adult Americans with student loan debt, you can use the extra funds to repay existing student loans. Thanks to the SECURE Act, families can use up to $10,000 on qualified student loans. To get additional help with your student loan and other debts, contact Guardian Debt Relief.

Guardian Debt Relief specializes in debt consolidation and other debt-relief options. Contact Guardian at the link below to see if you qualify to reduce your debt.

See Your Debt Options with Guardian

What To Do With Extra Business Cash

17. Invest in Growth

Why not use the extra business cash to grow your business with marketing, specifically search engine optimization (SEO). Most businesses are online (or should be) because this is how customers find you. Optimizing your web presence with SEO can increase traffic to your website and, if they like what they see, buy your product or service.

One of the most significant factors affecting your local rankings in Google is business citations. A citation is any mentions of your business’s name, your address, or phone number on your website. Moz Local is the best tool for businesses looking to quickly audit their citations online. You’ll be able to see your information across the internet and make changes if it’s not correct.

Moz Local helps you get the most out of your online presence. How accurate are your business’s listings? Use Moz Local and check for free.

Check Your Presence with Moz Local

18. Outsource Your Least Favorite Tasks

As a small business owner, you’re busy with a lot of things on your plate. Whether it’s managing your email, staying on top of new projects, or creating relevant documents. There are just too many details required for you to run a successful business. But those details come at a cost: your time.

Companies like BELAY can connect you with a virtual assistant that’s experienced to help tackle small tasks so you can concentrate on growing your business. Tasks like checking emails, answering calls, or managing your websites, can all be outsourced to a virtual assistant. BELAY’s virtual assistant can help you free up time, keep you organized, and relieve your stress.

Stop spending countless hours every week on tasks someone else can do for you. Discover how BELAY can help you focus on what matters.

Get Started with BELAY

Final Thoughts on What To Do With Extra Money

There are so many wrong ways to spend your extra money. But you were just given 18 of the best strategies on what to do with extra cash.

The goal of effectively making good use of your extra money is to have a plan in place. Any of the strategies mentioned in this article can help you optimize your extra cash.

But if you’re interested in exploring opportunities to further increase your cash flow, try tutoring online or any of the many ways you can make money without a job.