4 Ways To Handle $1,000 Like A Money Boss
AKA What to do with your tax refund.
Or perhaps you got a bonus at work, an extra client or a generous birthday gift.
Here are the 4 smartest ways to handle this bonus, according to Money Coach and author of How to Build a Luxurious Lifestyle Without Going Into Debt, April Caldwell.
Build Up Your Emergency Fund
I recommend my clients have 6-9 months of living expenses or income saved. If you don’t have that built up, this is a great place to stash this money. Life doesn’t always go according to our plan and when that happens you either have cash to bail you out or you use debt and rack up your credit cards.
A money market may give you a better return on your money than a savings account, but it is still accessible when you need it for an emergency. Let me take a moment to define emergency: an unexpected event that threatens your family, home, or ability to work.
Increase Your Retirement Savings
If you don’t already have your retirement on auto-save, this is how you get started. If you are self-employed, look into retirement vehicles specially designed for your circumstances. If you work in corporate, use this to start an IRA or over-fund your life insurance.
Invest In Yourself
How can you use this money to create a return on investment in your life? Have you wanted to go back to school? Hire a coach? Learn a new skill? Look at this money as an investment. If you work with a money coach, for example, that teaches you how to get out of debt, that could save you thousands of dollars in interest. Not to mention teach you the skills to STAY out of debt. Maybe the money coach teaches you to organize your finances, understand how everything works with YOUR life and releases you from the stress, frustration and guilt. How does that reflect in your life? Would it create a better relationship with your significant other? Let you say YES more often to your kids? Enable you to quit the 2nd job or the excess overtime?
Open A Values Account
I teach my clients how to spend their money in a way that aligns with their values. Think of something that is important to you: travel, charity, starting your own business. Use this money specifically for that and commit to adding to it regularly.