In everyone’s life, there are situations when you suddenly receive a certain amount of money and don’t know how to properly dispose of it. Is it worth investing in some long-awaited purchase, buying foreign currency, or saving it in a bank account? Let’s figure out how best to deal wisely with extra or unexpected funds that fell into your hands!
Tip #1: Track your finances
Whether you want to figure out how to spend extra income after retirement or how best to manage the legacy of a late rich aunt, tracking is always worth using. Some do it manually, making certain notes in a diary or a special budget notebook. However, we recommend using a more modern method, trying financial tracking applications. For example:
- CoinKeeper and other similar services.
Fun fact: if tracking becomes a habit, then entering data into the application every day will take from 2 to 5 minutes. If you choose the traditional way of budgeting, then manually recording data will take 2-3 times more time.
Tip #2: Think about the long-term advantages and disadvantages of purchases
If you are going to spend the received funds on certain purchases, then it’s worth it to critically compare the pros and cons. The fact is that some purchases are just impulsive desires that don’t carry practical benefits. For example, buying a new smartphone because your model is already outdated is not rational. On the other hand, if the laptop you are working on breaks down frequently, then buying a new one would be a great investment.
Tip #3: Consider investing in crypto
Investing in potentially profitable things will not only save capital but also increase it with wise management. Now many modern users are investing in various cryptocurrencies, as the market is not stable and the price of some options is constantly growing – as it was with Bitcoin, Ethereum, Litecoin, and other well-known coins.
If you are wondering how to spend extra income, download an app of a reliable exchange, register, study the conditions, and choose which cryptocurrency you want to buy. Also, do not forget to get reliable storage in advance, which will allow you to safely retain tokens.
Tip #4: Try bank deposits
Another great way to invest is bank deposits. They are safe and inexpensive, as well as potentially profitable. In contrast to crypto investments, you are unlikely to face the risk of losing capital even with inflation. Its level is quite often equal to the interest rate offered by banks. Thus, you kind of earn a certain percentage of the deposit, but after the expiration of the deposit, you can afford these savings as much as you could afford for the deposit amount, for example, a year ago.
Tip #5: Optimize your money management
If you don’t plan to invest, but rather just want to use the funds received as usual, then you should figure out how to spend extra income at home wisely. Remember tip #1, keep track of your finances, and figure out what habits are draining your budget. For example, daily meals away from home, squandering on coffee-to-go, lending to friends, and so on. Once you figure this out and minimize it, then budget management becomes more balanced.
Thus, if you suddenly received a huge sum of money, don’t spend it headlong on various desires. Give up impulsiveness, plan your budget and consider whether it is possible to invest in cryptocurrencies, bank deposits, or real estate. And if this amount simply becomes an addition to your usual budget, then do not forget to track it and optimize your spending!
Tip #6: Take a dream vacation
You’ve spent so much time thinking how to spend extra income after work wisely that you deserve to splurge on a vacation. How about a dream trip that you’ve imagined for a long time? There must be the perfect place in the world that will recharge you for new achievements!