Between our tax returns and the additional stimulation package, many of us will be receiving some extra money from our government this month. What should you do with this financial windfall?
In terms of the economy, the government hopes you will spend this money. Still, even if you invest it in stocks that should also help the economy. How should you decide what to do?
Whenever you receive a bonus amount of money, that is both unexpected and not part of your budget, it can be a time to make financial amends. Some good examples of ways to use this money are:
1. Pay off high rate interest credit cards. If you have followed my blog this week, you will know that credit card interest rates are very likely to go up in the short term. Protect yourself by paying this off now.
2. Put the money away for your children’s college education. A lump sum can be a great way to get started on saving for your kids’ future.
3. Start an emergency fund. If you don’t have an emergency savings account, this could be a way to get it started. With a tight budget, an emergency fund is even more important but harder to save for… so use this extra cash to get it going.
4. Add to your savings for a special large purchase. Do you hope to own a home someday? Need a new car? Use this extra cash towards a down payment.
5. Get caught up on your retirement savings. With the stock market down, this is a great time to buy. If you select carefully, your investments are sure to rise in the long term.
6. Feeling comfortable with your current financial picture? Reward yourself with a splurge… a great vacation or a new TV?
Have some ideas of your own? Please feel free to share them in the comment box below.
Related Articles:
*How Are You Going to Spend Your Tax Refund?