Recently, I made an “extra” $1,000 off a one-time gig. The earnings were completely unexpected and in addition to my regular, average income, which is why I’m considering it extra cash.
If you’re anything like me, whenever you have extra money on hand the ways you could spend that cash quickly add up to more than you actually have. There’s always a choice to be made. And that can be difficult, as I feel there’s a lot of pressure to ensure $1,000 doesn’t go to waste.
So I’m trying to narrow down the options and choose the smartest place to put this bit of extra income. Here are the ideas I’ve come up with so far — but I’m curious to know, how would you spend $1000?
Don’t Spend It; Save It Instead!
Of course, my first thought was, “save it!” I don’t have any big expenses coming up, but why not give my emergency fund a boost and give myself an additional $1000 cushion for when I am faced with a major cost?
After all, my car is creeping up on 100k miles, one of our house’s A/C units might be older than I am (and it’s obviously a miracle that it’s still running right now), and with pets there’s always a chance a big vet bill is looming around the corner.
Or I could add $1000 to our travel fund. We’ve set a goal to take one big international trip per year, and do accomplish this we need to regularly add to our savings for things like plane tickets.
Take a Trip Now
Speaking of travel, would you spend $1000 to take a trip now? I’m certainly tempted. That wouldn’t cover another trip abroad this year, but it would definitely cover the cost of a relaxing vacation like a week down at the beach or even a cruise.
And after working really hard this year to quit my job and pursue self-employment full-time, taking a “free” vacation where I can sit back and do nothing sounds like a lot more fun than it used to!
Invest a Little Extra
Another option for the $1000 would be to invest it. I could add it to current investments — which would be index funds — or I could get totally wild and crazy and pick a few stocks on my own.
I wouldn’t “play” with what we regularly contribute to investments like this. I don’t try to time markets or pick stocks because I know that’s a losing proposition when you’re investing for the long-term. But it would be kinda fun to try my hand and choosing the next big thing with a little bit of extra cash.
Or, I could even make about two extra mortgage payments, but I’m not sure what the point would be here. We’re not in a hurry to repay our mortgage thanks to a crazy-low interest rate. I’d probably make more in the market (even picking my own stocks!). Still, it’s a thought worth considering, seeing as it would be that much more knocked down off the principal.
Spend It Smartly
I think spending the extra cash — when I don’t need to spend it — is a little financially irresponsible. But I’m also extremely forward-thinking and tend to focus on the future at the expense of today, and that’s a bad habit I’m working to break (a little). Life is all about balance, so it’s certainly not a crime to spend extra money right now when we have an emergency fund, no debt beyond that low-interest-rate mortgage, and are already in the habit of investing a large percentage of monthly income.
The key to spending my extra cash would be to do so in a way that was smart, and could still be considered an investment. For me, that would be spending it on home improvement projects that are likely to bring up the value of the property: new hardwood floors downstairs, new countertops in the kitchen, a front-and-back-yard overhaul… lots of options here.
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How Would You Spend $1000?
These are the ways that I’m considering using an extra $1000. But I’m curious: what do you think of these options? How would you spend $1000 if it was extra cash that needed to be put to good use?