Every once in a while, you might end up with some extra money that is not necessarily assigned for your bills – so, you may wonder what to do with it. Perhaps a stimulus check came in, or you took on an extra side project that brought some extra income. You’ll want to put that money to good use, so here are a couple of tips on what you can do with $1000.
1. Open a 529 Account
If you have kids that are bound to go to college one day, you may want to spare them the trouble of drowning in student loans and open a 529 account. In some states, the 529 only has a contribution of about $25 per month. Together with that $1,000 you’ll be putting in, by the time your kid goes off to college, you’ll have quite a significant amount put aside.
2. Pay Your Debt
The average millennial is about $87,448 in debt, including mortgages, car loans, credit card debt, and many more. It makes sense to use any other extra money that you have in order to pay that debt. While $1,000 is not enough to cover your entire sum, you can at least cover some of your credit card debt. This way, you’ll reduce your interest and end up saving even more money in the long run.
3. Buy Life Insurance
This is one of those things that we hope we never need but can be quite helpful in case something ever happens to you. It will offer some coverage for your kinds – a type of insurance that they can rely on. You can use part of the money to buy a low-premium policy, and then use the rest of it to pay the year’s premiums. This will give you enough time to save up for next year’s premiums.
4. Make an Investment
If you suddenly come across $1,000 that you don’t know what to do with, the best thing that you can do with this money is to make it grow. You may invest the sum in the long-term by buying and keeping stocks, or perhaps you may give trading a try. There are plenty of professionals out there that can help you with this. You may read a BCR broker review or two if you don’t know how to pick. A good broker can actually turn your investment profitable.
5. Refinance Your Home
If you have $1,000 to spare, then you may want to consider refinancing your home. You may need to throw in a little extra money to that $1,000, but in the long run, this might help you. Mortgage rates are a bit lower now, and there is a good chance you may find a better deal for your home. You’ll only be lowering your interest, but this will add up in the long run.
6. Renovate Your Home
Our homes are some of our most valuable assets – so, if you have $1,000 to spare, you may want to renovate a bit. You may not be able to go through a full home renovation, but it will still be enough for a few small modifications. Perhaps you need another couch for your living room – the average one costs around $1,000, so you’ll be within budget. Or maybe you need to update your home office so that it’s less distracting and more motivating. It’s the small things that count, and some may even increase the value of your home.
7. Save It for a Certain Goal
Do you want to buy a new car? Or maybe you are thinking of taking a fancy trip at some point. Putting the money aside for a down payment for your home doesn’t sound that bad either. If you have $1,000, it will likely be more than enough to cover the minimum balance requirement of a savings account. Depending on the bank that you get your account at, you may even get a high-interest rate. As that interest builds up, you may end up with quite a significant sum in the future.
8. Create an Emergency Savings Account
Only slightly over 50% of Americans have an emergency savings account – so, if you are one of those people that do not have one, then you might want to put that money aside. You never know when you might need some extra money. Perhaps your car will break down when you least expect it, or you get laid off as a result of company modifications. If that happens, it will be good to have some money set aside for an emergency. Plus, the money will end up growing interest over time if you put it in a savings account, so you have more to win than to lose.
9. Put It In a 401(k)
If you don’t have a 401(k) set for your retirement, then you may want to use that $1,000 to get one. 401(k) costs start at around $750, so if you get a standard plan with fewer fancy features, you will be within budget. After that, you will only have to pay the yearly participant fee, which can be as low as $15. Over the years, this can grow a lot of interest, which you will be sure to enjoy in your retirement endeavors.
10. Start a Side Business
If you have a skill that you believe could be turned into a nice side business, you can do that with this sum. It can be something small, like a crafts store, or perhaps even a magazine business. Every side gig will need a bit of capital to start with, and you will likely need less than $1,000 to pay the fees and put the foundation for your business. The rest can be used to create a good-looking website and perhaps even get a couple of supplies.
The Bottom Line
There are many smart things that you can do with $1,000. You may spend it, or you may save it. Regardless of the route you choose, the investment you make may benefit you in the future.
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