Extra money from a budget surplus.

Got Extra Cash?

If you have a good budget that works well for you, there is probably a little flexibility in it. This is a good thing because some flex money will keep you from breaking your budget and allow you to stay on track when expenses change a bit. What this means though, is that sometimes you will have a little extra cash at the end of the month. Here are some ideas of what to do with it.

1) Pay Down Credit Card Debt

If you still have credit card debt, the first thing that you should put your extra money towards is paying it down. Every extra dollar that you pay on a credit card is a dollar that you are not being charged 20 percent interest on, so there is nothing better that you can do with your money.

But which card should you put the money on? There are two schools of thought on this.

Highest Interest

The first is to put the money on the card with the highest interest rate. If you are a logic based person, this should make the most sense to you. By paying down the card with the highest interest, you are saving the most money.

Lowest Balance

The second idea is to put your money into the card with the lowest balance. The idea here is that this card will be the one that you can completely pay off the fastest. This has a psychological effect, in that you get a feeling of accomplishment and want to continue paying down other cards.

Whichever method you choose, you will be doing something very beneficial to your overall financial picture.

2) Boost Your Emergency Savings

How is your emergency savings doing? If it does not have enough money to cover 6 months of expenses, it needs some work. It might not be the most fun way to spend your extra money, but it is a very responsible one. After all, if the last few years has taught us nothing, it has taught us the value of a savings account.

Make Saving Fun

To make it more enjoyable to save, create a goal. If you are just starting out, keep your goal simple and make it to build up 500 dollars in your account. Are you a more advanced saver? Make your goal to build up 5000 dollars or more in your savings. Whatever your goal, track your progress by making some simple charts showing your progress.

3) Add It To The Next Month

If you have an extra 100 or 200 dollars, treat yourself by adding it to next months budget. Increase your entertainment budget, your food budget or any other category that makes you happy.

Adding money to a budget category will allow you to relax, without the need to spend so much time worrying about savings. Plus, it is very possible that it will result in you having a surplus again the next month. A never ending budget surplus is a good problem to have.

4) Start A Reward Savings Account

If you already have a sufficient emergency savings and your credit card debt is in control, you are doing well financially. Why not treat yourself by saving for a long term goals.

That extra 50 dollars from your budget might buy you a nice dinner out, but that would be quickly forgotten. Instead, put the money into a reward savings account. Keep adding extra money to it until you save for a long term reward. That reward could be a vacation,  designer bag or perhaps a new big screen television.

Pick whatever reward will make you happy and put that extra money towards it. As your reward savings grows, it will encourage you to stay on track with the rest of your budget.

5) Make A Charitable Donation

Charities have been suffering lately due to people pulling back on charitable giving. If there is a cause that you believe in, put that money where your mouth is and make a donation. While you are at it, post about your donation on social media and encourage others to do the same. Who knows, maybe your one small donation will encourage others to give big.

If you decide to donate, be sure to record the transaction and get a receipt. There is no reason that you should not earn a potential income tax savings. Do a little good and get a little good back.

6) Invest In Yourself

If your budget surplus is cash in the amount of 200 dollars or more, consider investing it in yourself. Investing in yourself can come in a lot of different forms. Here are a couple of examples.

Increase Your Education

Take that money and use it to increase your skills. This could be taking a course at your local community college, earning an advanced certificate or perhaps investing in learning a new language. All things that could allow you to increase your earning potential in the future.

Start A Side Gig

Have you always wanted to start your own business? Your extra money could get you started. Use the money to build a website, buy business cards or for the purchase of startup equipment.

7) Just Treat Yourself

If your have a well stocked emergency savings, your debt is paid down and you are otherwise on track, treat yourself. You only live once and you can not spend your entire life scrimping and saving.

A treat for yourself might be a cool shop tool, a new outfit or perhaps just a night out on the town. Whatever you enjoy, get it. Realize that it is okay to splurge occasionally, just be sure to reign yourself in next month because you may not have the same budget surplus.

Posted by

James Car is a finance, loan and budget expert based in the United States. After attending Brookhaven college, he went on to become a successful entrepreneur. He now enjoys writing articles that help people save and make the most of their money.

Leave a Reply

Your email address will not be published. Required fields are marked *