If you have a little extra cash and you really need it to be more than just a ‘little’ then putting it to work for you is going to be the best thing that you do for a while, financially speaking. You can either use it to relieve a little strain elsewhere, or use it to save more money later. Either way, just having sat there is not helping so you should make it work for you.
On the other hand, perhaps you don’t have a little cash lying around but still need fast access to some, for deposits or an emergency repair? Whatever it’s for, getting your hands on cold cash in a hurry is not always that easy, thankfully there is always OppLoans should you need it.
For everybody else, there are several ways that you can make those extra dollars actually useful. Getting in better financial shape is just about everybody’s dream at the moment, given the uncertain times that we find ourselves living in, so what are the best ways that we can help ourselves achieve it?
Well, these suggestions may not offer results that are as tangible as returns on stock and shares trades, but their payoffs are every bit as real and effective in the long term.
The first, most powerful use you can put your ‘spare’ money to is investing in a savings fund. Don’t have one? Get one. Financial planners suggest saving as much as 3 to 6 months worth of income in this fund. Should the unthinkable happen, and you lose your job, you have this safety net to help break your fall. Sounds simple, but doing it is much harder. Even if you can’t manage those ambitious sums, putting aside something is a whole lot better than nothing.
Here are some other ways that you can put extra cash to work, in order to help shore up your finances.
Attack that debt
Do you have a high interest debt? Using that spare cash to pay it off could save you even more later as you no longer have to pay out extra just to satisfy the interest. Debts that come with lower interest rates on items such as a mortgage or vehicle may not be as immediately important, just so long as those repayments represent no more than 30% of your income – any higher than that and they need to go, sooner rather than later.
Top up your health savings account
If you have a health savings account, consider fully funding it. For instance, the top amount that a single individual can put into their HSA, in 2017, is $3,400. For a family, that maximum rises to $6,750. Health savings accounts are loved by financial planners because it known as being “triple tax-free”. What does that mean? Well, you are putting money into it that hasn’t been taxed yet, the earnings compound free of tax, and account holders can withdraw from the account, tax free, if the money is for “qualifying” medical expenditure.
Make use of the services that a financial planner can provide
Consider hiring a fully certified, professional financial planner to, well, create a financial plan for you. It can be difficult to plan for life after retirement if you don’t even fully understand where you are right now, financially speaking. People today are less attuned to fluctuations and moves in the stock market, which is not necessarily a bad thing but can make planning things out that bit more difficult, as one would imagine. Financial planners charges can vary, but upto $2,000 a year is not unusual and the services provided can include, cash management, insurance, retirement planning and regular meetings.
Top up your retirement accounts
If your paycheck has a tendency to leave you with more than you need each month, then you could always use the extra money to max out your workplace retirement accounts. Additionally, if you happen to 50 or over, you should remember that you will be able to make ‘catch up” payment contributions in addition to the $18,000 capped, regular contributions that are allowable for the year.
Face the inevitable
It happens to all of us eventually, and there is simply no avoiding the inevitable. Hire the services of an attorney and work with them to create an estate plan, or at the very least a will. A caring.com survey that was conducted fairly recently (recent at the time of writing, at least), showed that just 42% of those surveyed (over 1,000 individuals) had created documents like a will or trust. The cost of hiring an attorney for this type of service is not as steep as many may realise, with fees usually falling between $300 and a $1,000. If this does happen to be a little on the steep side, there are do-it-yourself options that start around the $50 mark but these are obviously more time consuming. Taking care of burial plots can also be a good idea, if a little morbid, and can take the pressure of family members when the time comes.
In the end, when all is said and done, you may not need to do any of the above. Simply building reserves can help you out of a tight spot later on down the line. There is nothing wrong, nothing at all, in just putting any and all spare cash into an account that will provide returns on interest. Obviously, the more you put in the more it attracts.
Whatever you decide to do, investing for the future and making your money work for you, in one way or or other, is never a bad idea.