It’s not every time you’re in debt or broke. Sometimes, the cloud reflects shadow, other times, it beams sunlight. If you’re at that point in your life where you got extra money either from a business or as a gift, it’s a good thing to think about a productive thing to achieve with the money. The normal thing you may want to do with such extra money may be to splash it on shopping, dining out, vacation, etc. But what if there are other better things you can use the money for, without feeling regrets later on? In this blog, we will look at various things you can use your extra money to do.

Financial Literacy 

Hardly would anyone wake up in a day and not spend. Even if you don’t spend, you are using light, water, call and internet services, and you will pay bills at the end of the month. So, yes, you are spending money every day. When it comes to financial literacy, it teaches us to be prudent with spending and master budgeting.

If you’re financially literate, you will take a pause before spending. You could ask questions like “Is this a need, or a want?” “Can this wait or is it urgent?” Taking a little while before spending will save you some stress.

Let’s look at a case study. Mr. A has credit card debts that he has consolidated under a consumer proposal program after speaking with a debt consultant at EmpireOne Credit. His debt has been reduced drastically with no interest accumulation, and he is comfortably making monthly payments. Mr. A then got lots of cash gifts on his 50th birthday. He has understood what it means to be in debt and to have a fresh start, so he considered the following options as regards what to do with this extra income. Let’s look at them.

Emergency Fund 

Sometimes, we are trapped in debt because of emergencies. This could make you take out high-interest loans especially if your credit score is low. If you have an emergency fund somewhere, you could take out money from there to fix whatever issue it is you have, and then you will later return it. An emergency fund will save you from anxiety and pressure when life challenges come. It is advised to have three to six months’ worth of living expenses in your emergency fund. So, if Mr. A doesn’t have an emergency fund, he could start one with this extra money at his disposal.

Pay Down Debt

There’s no joy greater than seeing your debt getting reduced. It gives you peace of mind and joy. Mr. A has a stable income, so he doesn’t have any problem paying his monthly obligation towards the consumer proposal. However, if he has other debts like student loans, mortgages, car loans, or even new credit card debt, he can use this extra money to pay down those debts.

He may decide to use the Snowball Method. Which entails paying off the smaller debts so he can feel fulfilled and motivated to keep paying off his debt. Another method to consider is the Avalanche Method, that is, the high-interest debts are paid down to save money on interest in the long run. Any of the methods is okay as long as it helps you to keep moving forward.

Investing 

Building wealth involves money management and investments. There are different ways people invest, it could be in a business, in oneself, stocks, etc. One important way to invest is in yourself. Value attracts money, if you’re a person of value, you will make more money. This could be an opportunity for you to go for a course or get a second degree. If you’re looking to invest in a business, be sure to know all there is to know about such a business and the level of risk involved before you dive into it.

Travel 

Financial management doesn’t imply you should not enjoy and have fun. If you have been thinking about travelling for a while and this extra money can fulfill this dream, you may consider travelling and having a great time alone or with your family. This can be an opportunity for you to recharge and pamper yourself for all the hard work you’ve been doing for years. However, if the money isn’t enough for such travel, you can save towards it, maybe all you need to achieve this is a few hundred dollars. So, set the money aside and start saving towards it.

Conclusion 

Having extra income is not something that happens all the time but if you have such fortune, put it towards something productive. If you’re tired of paying off debt and having nothing left to take care of your basic needs, you need assistance. You can speak with one of our debt experts at EmpireOne Credit to seek help. Your debt can be reduced by up to 80%, and interest will stop immediately. Call us at (416) 900-2324 to schedule a free consultation with us. Being debt-free feels good!