Most of us spend our time looking at our bank accounts and thinking, “it sure would be nice to have a little extra money in there!”
But while that might mostly be the case, sometimes we find ourselves in possession of a small chunk of cash. And that gives us options — after all, there’s no better way to bolster your life than if you have some money to play with!
Of course, there’s a right and wrong way to use your money. Spending all your disposal cash on lottery tickets, for instance, probably isn’t a good idea. In this post, we’ll run through some of the best ways to spend $2,000 or, indeed, any amount of additional cash.
Put It In An Emergency Fund
Putting your money into an emergency fund probably isn’t the most exciting way to spend cash, but there’s a reason why it’s recommended. You never know what’s going to happen, and if something bad happens that requires some money to resolve, you’ll be happy that you decided to put it in an emergency fund. Remember that this money should be easily accessible, so you’ll need to have it in an account that allows immediate withdrawals.
You might never need your emergency fund, but if you do, you’ll love that you had the foresight to plan ahead.
Send Yourself On a Course
There are plenty of ways to get ahead in your career, but there’s arguably nothing that’s more effective than upgrading your skills. Investing in your professional capabilities is one of the best investments you can make, since, if you choose the right ones, you’ll have the capacity to earn more money over many years. A single $2,000 investment in a course might pay for itself many times over in the space of a single year.
Not sure which course you should take? There are two ways to decide. One is to take a look at the skills requirement for jobs that are slightly above your current ranking. The other is to ask your boss what skills you would need to be eligible for a promotion, and then take a course that would give you those skills.
Invest It
Putting your money to work is one of the best ways to push yourself towards a strong financial future. In this day and age, there’s no shortage of investment options. Many people decide that investing in an index fund, such as the S&P 500 or FTSE 100, is the easiest solution since those funds have historically performed well. However, it’s worth noting that the return on investment is usually only very modest.
Other options include investing in stocks for individual companies, which can offer higher returns. There are also alternative investment ideas to explore, such as whisky, gold, or cryptocurrencies. Whisky investing is particularly popular right now; one of the reasons whisky is a great alternative investment option is because of the high projected returns, which can be 8 – 15% per annum, significantly higher than the 5 – 7% of the FTSE 100. Cryptocurrency can provide high returns, too, though it should be noted that there’s a lot of volatility in that market.
Tick Something Off Your Bucket List
Most advice regarding what to do with some additional cash in your bank account will concern itself with securing your financial future. However, while that’s important, it’s not the only way to spend your money. If you’ve already put some financial measures in place, then why not consider using your additional money to treat yourself?
There may, for instance, be something that you’ve always wanted to do. If it is your dream to visit New York or see your favorite artist in concert, then finding yourself with some extra money to play with can provide the perfect opportunity.
We spend most of our lives doing sensible things; it’s OK to do something just because you’ve always wanted to!
Improve Your Property
OK, back to the serious stuff. If you own your home, then spending a couple of thousand dollars to make improvements can be a good idea. This won’t only make the space more livable, but it might even nudge the property value in the right direction. Contrary to popular belief, you don’t need to make wholesale upgrades to your home to see an increase in value.
Some smart, affordable improvements you can make to your home include:
- Improving the front of your property (upgrading the front door, windows, planting trees).
- Upgrading your kitchen cabinets or worktop.
- Investing in smart lighting
- Fixing obvious imperfections, such as cracks in your walls.
Build Your Retirement Fund
If you’re still of working age, then the $2,000 you have in your bank account might be nice, but you’ve probably already got that amount of money coming in every now and again. As such, it’s not exactly a life-changing sum of cash.
One smart way to use the money is to use it as the basis for your retirement fund. Many people are underprepared for their retirement — and while adding $2,000 to it might not sound like a lot, thanks to compounding interest, it could turn into a significant sum of money in the years to come.
Let’s say you put $2,000 in a savings account that offered 5% AER, and then committed to putting $100 into the account each month. Thanks to compounding interest, you would have nearly $50,000 in twenty years.
Clear Your Debt
You can’t begin to improve your financial standing if you’re carrying plenty of debt. If you have credit card or other forms of “bad” debt, then using your money to pay it down is an idea worth considering.
Of all the options on the table, it’s this one that’ll pain you the most, since it’s not fun at all, but it’s probably the smartest move. Just think about how much money you could save if you didn’t have to pay money each month to pay off the debt that you owe.
Start a Business
There’s a lot you can do with $2,000 — including starting a business. Many small-scale operations can be gotten underway with that sum of money, especially if you have skills that will allow you to DIY many of the jobs you’ll need to take care of.
If you have a skill such as writing, website designing, or digital marketing, then you can use $2,000 to establish your business. Dropshipping is another good idea. With that, you’ll only need a website, product curation, and marketing, all of which you can get with $2,000.
Trust a Robo Advisor
Want to invest your money, but don’t know where to start? Then you can always put your money in the hands of a robo advisor. This software makes investments on your behalf using an algorithm, offering a fully hands-off investing experience.
If you don’t like the idea of working with a robot, then you can always hire a financial expert. They can offer guidance on where you should put your money.
Invest In Your Child’s College Fund
Finally, a noble way to spend $2,000 is to put in a fund that your child or grandchild can use in the future. With costs rising all the time, an adult can be at a serious disadvantage if they don’t have some money for education or other things that can help them to get ahead. With compounding interest, that’ll become a lot of money by the time your child enters the real world on their own.
