Suddenly have a slew of extra spending money? Before you head out on a spontaneous shopping spree, consider these 20 things you can do with it instead.
It’s not often you come across an extra $1,000. But it could happen. What if you’re part of a settlement process and get an unexpected check? Or maybe you receive a small inheritance from a long-lost relative. Or possibly, you get an unexpected bump in your year-end bonus.
Whatever the case, it’s always a good idea to at least think about the possibilities of what you’ll do if you get an extra $1,000. Or even if you save up money and have an extra $1,000 just sitting in your savings account.
No idea what you’d do with that kind of “spare” money? Here are a few suggestions:
1. Pay off high-interest debt
If you’ve got a credit card balance sitting around costing you absurd amounts of interest, get it paid off as quickly as you can. Even if your balance is well over $1,000, putting that first $1,000 in gets you started on the journey towards debt freedom. Once you knock out some of the balance, you can keep paying your old monthly payment so that you’ll chip away at that debt little by little.
2. Put it towards your emergency plan
Already have your debts paid off? Or don’t have an emergency fund that can cover at least three to six months’ expenses? The next best place for that money is in your emergency plan. Read more about how to set up a fully-fledged emergency plan (that’s more than just a savings account) here.
3. Save for a specific goal
Do you have something in mind that you’re saving for? Consider adding your $1,000 to the goal, whether it’s buying a new car or putting a down payment on your next home. Even if that money is only a small percentage of your goal, it moves you forward, which is always a good thing.
4. Invest for retirement
If you aren’t already maxing out a 401(k) and an IRA, add the $1,000 to your retirement investments. Over the course of the next 20 or 30 years, that original $1,000 could grow to be worth quite a lot, especially when invested in low-cost mutual funds or the like.
5. Put it in your kid’s 529 account
What if you’re already maxing out your retirement accounts or saving as much as you feel like you should? In this case, consider adding that $1,000 to a 529 college savings account for your kid. These accounts act like an IRA for education spending, so they’re a valuable way to save up now for those hefty college expenses you’ll see in the future.
6. Buy a life insurance policy
If you don’t already have a term life insurance policy, you probably need one. Even single people with no kids sometimes need life insurance coverage. If you do need a policy but have been putting off getting one because you can’t afford the premium, now is the time. Secure a low-premium term life insurance policy, and pay your first year’s premiums with this extra cash. That buys you time to fit the premium into your normal budget within a year.
7. Pay a lawyer to draw up your will
Don’t have a will yet? Many people put off having these documents drawn up because they’re expensive. If that’s you, investing your $1,000 in a meeting with a lawyer to have a will, living will, power of attorney, and other documents drawn up is worth your while. You’ll get peace of mind and ensure your loved ones are cared for if something should happen to you.
8. Upgrade your office space
Struggling with back pain because your office chair is terrible? Or considering upgrading your work-from-home desk to a healthier sit-stand model? Investing in your health by upgrading the space where you spend most of your waking hours is a great option. Upgrades like these can help you work more productively and ergonomically, so you’re both happier and healthier.
9. Take a class to further your career
Have you been thinking about changing careers or developing skills to take your current career further? Using $1,000 to invest in classes to boost or change your career can be a great option. Plus, if it leads you to a higher-paying job, you could get a great return on investment from that money.
10. Take a class just for fun
Acquiring new skills doesn’t just have to be about furthering your career. You can also take classes just to increase your health and happiness in your personal life, too. Learning for the sake of learning is great for personal development and brain health. So if you’ve always wanted to learn to weld or sculpt or play an instrument, use this windfall to invest in the materials and classes you need to get it done.
11. Start a side business
If you’d like to earn extra money on the side, consider investing this cash into a side business. Many side gigs would only require you to spend a small part of this $1,000. But if you need to set up a nice-looking website, you could invest some of the money in some professional help for design and website management.
12. Get a tune-up on your car or a major appliance
Preventative care for your car and major appliances is a great way to spend extra money. Spending a little now can keep you from having to spend a whole lot of money down the road. So consider taking your car for an official tune-up. Or if you’ve been putting off having regular service on your furnace, fridge, or washer and dryer set, that would also be a good way to spend this money.
13. Upgrade a major appliance
Do you have an appliance that’s always causing headaches in your home? Or maybe one that’s making your life more difficult instead of easier? You might consider using this money to upgrade it. Perhaps a nicer dishwasher that would actually clean your dishes would save you loads of time you otherwise spend scraping and hand-cleaning. Or maybe a larger washing machine would save you two or three loads a week with your growing family.
14. Put it into protecting your home
Preventative maintenance for your appliances is great, but don’t forget your home itself, either. You can protect your home by getting your gutters cleaned, jacking up the basement in your older home, or upgrading your sump pump. And if you’re all good on the maintenance side, you could put some money into upgrading a room with a coat of paint and new fixtures.
15. Take a vacation
Taking a vacation doesn’t have to be a waste of money. In some cases, a good, affordable vacation lets you come back to your everyday life more refreshed and energized. And that can have a huge ROI for both your personal and professional life. If you have some paid time off banked, make it a game to get your whole vacation done for a $1,000. It can be a fun exercise that also leads to great memories.
16. Buy a museum or zoo membership for your family
If your family is constantly looking for fun things to do on weekends and school breaks, consider spending part of your windfall on a membership. Most museums, zoos, and other local attractions offer family memberships. If you go just two times in a year, you’ll save money with a membership. And having one means you can check out the latest attractions at your local museum every weekend, without spending a dime of extra money.
17. Look into other experiences
The jury is in on what makes people happier: experiences over more stuff. So if you’re struggling to find a way to spend that $1,000, don’t buy more stuff. Instead, look into buying experiences. That could be a class or vacation that we’ve talked about above. Or you might take your spouse, a friend, or each of your children on a special night out to build some memories. Those are truly the gifts that keep on giving.
18. Buy some health and fitness equipment
Considering investing in your health? That’s a great option. One way to do it is to buy some high-quality fitness equipment for your home. Just be sure you have room to store and use it, and that you know what you’re doing before you dive in.
19. Pay for a year’s worth of gym memberships or classes
Don’t have room at home? Or prefer to work out with others for accountability? In this case, consider splurging on a year’s worth of gym membership fees or exercise classes. Pre-paying may make you more likely to actually go and participate. And you won’t regret putting some money into improving your health and well-being.
20. Donate it
Giving to a charity is always a worthy option with extra money. Pick a charity locally or internationally whose mission you can really get behind. Then spend your money with that charity. With a larger donation, you can probably even earmark the money for a specific project you really want to invest in.
Any of these options are a great choice so don’t stress too much about your spending decision. Choose the one you’re drawn to the most. Saving is always a wise choice but as long as you’re not wasting $1,000 on stuff you don’t need you’ll consider this expenditure a good buy.
Updated May 24, 2018 and originally published May 22, 2018.