What To Do With Excess Money?
You recently have come into possession of some windfall money, and you determine whether you look to upgrade to the latest toy, e.g., Steam Deck, new iPhone 14, etc. But is it the right way to spend this windfall? Is there any other way to make the best use of this surplus cash?
Well, there are some things you can do with the money that will help your finances in the long run.
Clear off any pending debts
Do you have any credit card debt? Have you taken any personal loans? If yes, then use this money to repay any such obligations. It will save you a lot of money in terms of interest.
Build a retirement fund
Many people don’t pay serious attention to building a corpus for retirement. But when they retire, they find out they don’t have sufficient funds to meet their expenses. So it would help if you started building your retirement corpus when you started working. Use your bonus to add to the retirement corpus.
Buy additional insurance
Do you know insurance is essential for you and your family? You should have both medical as well as life insurance. Use the excess cash to buy both these insurances.
Dollar Cost Average (DCA) in crypto
The famous Nathan Rothschild is often attributed with the quote, “the time to buy is when there’s blood in the streets.” When everyone is fearful, and at this moment, we are in a perennial bear market, this is the time to accumulate those satoshis and ethers. One approach would be to DCA your way into the crypto of your choice. Therefore, you would take the windfall and invest a portion of it monthly into specific cryptocurrencies. This allows you to spread your buy orders over a period instead of buying it all at a particular price.
What are other ways way you can use a windfall to help secure your financial future?
Thank you for reading, and I hope you have a good rest of the day!
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At this moment, any surplus I have primarily goes to savings and investments (especially the latter). I think the excess money will come handy on a rainy day so it doesn't make sense to spend it on frivolous things.
Agree, its difficult to focus on the long-term when there are so many short-term things that can give you satisfaction,
Rightly said! Our focus muscle has to be strong otherwise we will always find ourselves in some financial trouble.
Paying off the debt is very important. I recommend starting with the smallest debt and eliminate it and then move on to the next one. Each time you pay one off, don't incur another. Instead, take the same amount of extra money and apply it to the next debt and so on. Get the snowball of debt elimination rolling down the hill!
That snowball is so critically under-estimated. Eliminating any debt is more money in your pocket in terms of no interest payments.
Fuck @spaminator - u got an upvote from me :D
Have a wonderful tuesday <3
Btw - check out https://blurt.blog/ - same as hive, but without the downvotes ;)