Whether it’s Uncle Sam telling you that they’re giving back some of your hard-earned money during tax time or you stumbled into some extra cash, it’s critical to know the smartest ways you can spend discretionary income on improving your life in more ways than one.
Take a Trip
Some people may look down upon spending their excess income on vacation. However, the mental benefits you’ll receive from your getaway are priceless. There’s no reason to feel guilty about an excursion away from your stressful life at home and work. Stepping away from those headaches for a week allows you to reevaluate things and let off steam. Ideally, you’ll return ready to take on the world after you spend time exploring it.
Home Improvement Projects
Your home is your most valuable possession, and it doesn’t take much to get behind on upkeep and care. Using your spare cash to upgrade your house may help you save money on energy and increase the value of your property. Unless you plan to be in your current home forever, keeping up with the necessary changes is paramount to ensure your property retains its value.
You could also go the fun route with your extra loot and invest in something more entertaining like a home theater, swimming pool, or game room. With items like a golf simulator, you can tee up all year.
Pay Off Outstanding Debt
With vanity ideas out of the way, we can sharpen our focus and let our extra money work for us. It may be the least fun way to spend your money, but paying off debt is worth the weight you’ll lift off your shoulders. High-interest credit cards and personal loans will continue to bury you the longer you keep paying only the minimum payments.
In a perfect world, you could pay off all your debts with this discretionary income without batting an eye. Yet, that’s not a realistic option unless you inherit a boatload of cash. Even exploring debt reconciliation goes a long way in making that overhanging debt disappear.
Speak to a Financial Planner
If you took your vacay, did your home improvement projects, and paid off your debt and still have money left over, it’s wise to go to a financial planner to map out an effective way to multiply your cash hand over fist.
Even if you started putting money away for retirement, you might not know the power plays to maximize your earning potential. A financial planner is like a personal trainer for your money. You show up to a personal trainer, asking them to mold you. Now, you’ll do the same thing with your portfolio and investments.
It feels nice to have some extra money flowing into your bank account, and knowing the smartest ways you can spend discretionary income promises to good those good vibes, especially when you double it from making wise decisions.