4 Ways To Spend Your Extra Cash

4 Ways To Spend Your Extra Cash You could save it or spend it, but what about investing in your future?

There’s nothing like seeing some extra cash in your checking account.

Maybe you’ve been logging some extra hours at work or you got a bonus. Maybe it’s from a tax refund or a return on a wise investment.

The point is, you’ve got some money to spare.

If you’re like most people, it’s burning a hole in your pocket. In other words, you might be ready to spend. And while you could do that, we’re willing to bet that you’ve learned to be careful with your extra cash over the years.

Unless it’s something you absolutely have to have, why spend your cash straight away?

Chances are if you’re reading this, it’s probably because you agree! Of course, there’s a time and place for buying yourself and your family a gift…

But investing that spare change in yourself, your family, and your future is something else entirely, and it can lead to you making even more money. So, if you’ve got some cash to spare and you’re not quite sure how to make the most of it, keep reading! We’ll explain 5 ways you can put your cash to good use.

Consider your Budget First

We get it—if you know you have some extra cash to spend, it’s probably because you’ve already considered your budget.

Still, it’s worth taking a minute to learn about the 50/30/20 rule. It’s a good foundation for your budget, and it could help you decide where to put your extra cash to work.

In a nutshell:

• 50% of your budget (after-tax income) should go towards your necessities: your mortgage payment, outstanding debts, car payments, insurance, etc.
• 30% of your budget should go towards the things you want: a family vacation, going out to eat, shopping expenses, etc.
• 20% (even more than 20% is better!) of your budget should go to investments, a rainy day fund, debt payments, retirement funds, etc.

Obviously, the 50/30/20 is just a starting point, but it’s a good one. Everyone’s budget is different, and you probably won’t be able to follow this budget all the time.

Just keep that 20% in mind! In most cases, the more money you’re able to set aside for smart investments, the better off you’ll be down the road. With that in mind, let’s dive into the specifics!

1. Create an Emergency Fund

An emergency fund is a must-have for anyone and everyone. Life happens. You could have an emergency, fall victim to a natural disaster, your home could need repairs, or your car could break down.

The truth is, the list of things that can go wrong is endless. The best you can do is be prepared for it. Even if it means starting with a few hundred dollars—any amount of cash you can set aside is better than nothing.

So, consider putting some or all of your spare cash into an emergency fund. A general rule of thumb is to have 3 - 6 months of living expenses covered by your emergency fund, but a full year’s worth of cash is even better if you can manage it.

You can think of it as investing for your future… just don’t put your emergency fund into your investments.

Some people put their emergency cash into mutual funds or investment accounts. Bad idea! An emergency fund is a rare instance where you need to let the money sit because you need to have instant access to it at all times.

2. Invest in a Brokerage Account

This is where your money really starts to go to work.

A brokerage account is easy to set up, generally free to use, and you won’t be penalized for withdrawing your cash like you would with some mutual funds and retirement accounts.

The thing is, investing in stocks with a brokerage account is a gamble. That means you can win big, or lose a lot.
So, you’ll have to do some serious research before you start investing. If you don’t have much cash to spare, low-volatility (low risk) stocks are your best bet. Look for stocks that suit your interests, and keep an eye on them.

And when you do make some cash on your investment, be aware that capital gains (your investment profit) generally come with a significant tax.

Still, investing with some research and a little bit of patience, you could turn your extra cash into even more cash—plus, you can turn it into a hobby.

3. Boost your 401(k) or IRA

Remember what we said about investing for your future?

Well, a 401(k) or an individual retirement account (IRA) are both great options for boosting your savings later in life.

One of the benefits of a 401(k) is that they’re generally tax-deferred. Your employer will offer a few options to choose from, typically they’ll match a percentage of whatever you put into the 401(k), and you’ll only pay taxes on it once you start withdrawing funds.

An IRA works a little bit differently. It’s an investment account that you manage yourself rather than your employer. Because you manage it on your own, you’ll have a lot more investment options. Plus, your IRA could qualify for tax-free withdrawals.

The downside of an IRA is the contribution limit. As of 2021, the contribution limit for an IRA is $6,000 per year, whereas the annual limit for a 401(k) is $58,000.

With either investment option, the general rule is you won’t be able to withdraw your cash until you’re 59 and a half years old. If you do, you’ll likely be penalized by the IRS.

4. Pay off your Debt…

Our final and most important tip for spending your extra cash is to pay off your debts.

We get it, paying off your debts is the last thing you want to spend your extra money on. But if you have a mortgage, student loans, a car payment, or any other outstanding debt, you’ll know what we mean.

And what do all debts have in common?
Interest! It funnels thousands of dollars of unnecessary payments out of your bank account and into your lender’s pocket.

So, it’s worth putting a few hundred—or a few thousand—dollars towards paying off your debts. The less time you spend paying them off, the more money you’ll save.

But the trouble is, you’re probably locked into a 15 or 30-year loan term. Your extra cash is just a drop in the bucket, right?

Investing in the near future

When we talk about ‘investing in your future you probably think in terms of 10, 20, or 30 years from now.

And on that timeline, your bonus cash is just a drop in the bucket for your lender. The interest will just keep adding up…

If you let it.

But we have another idea. What if investing in the future meant the near future. We’re not talking 15 or 20 years—we’re talking 7 - 10 years.

Well, now you can, with the Money Max Account by United Financial Freedom. It’s an all-in-one account that really can help you pay off your mortgage, car payment, and every other debt in as little as 7 - 10 years.

That means you can keep your extra cash for your investment in yourself, not your lender. Plus, you can save thousands or even hundreds of thousands in interest payments.

How’s that for extra cash?
The Money Max Account works by carefully tracking your payments, expenses, and income around the clock. Then, it uses advanced banking algorithms to find the quickest way out of debt for you.

24/7, 365 days a year—Money Max calculates and consistently updates your ideal debt payment, telling what debts to pay and when to pay them. And unlike your lender, you have the final say about where your money goes—that’s what the Money Max Account is all about.

You end up with a strategic debt payoff system that has already helped people across the country save over $2 BILLION in debt payments.

In as little as 7 - 10 years, you could be entirely debt-free, enjoying an early retirement with all of that cash you saved…

Set yourself on the path to financial freedom with the Money Max Account.

Questions about what the Money Max Account can do for you? We’ve got all the answers. Visit our homepage for more information about the story behind the Money Max Account or CALL NOW!