What to Do with Extra Monthly Cash (Without Wasting It)
— inspired by this week’s episode of CAPitalize Your Finances
So… you’ve got a little extra money left at the end of each month. First of all—congrats. Whether it’s from a raise, a side hustle, or finally kicking that daily latte habit (no judgment), having surplus cash is a great opportunity. But without a plan, it can just as easily slip through your fingers.
In this week’s episode of CAPitalize Your Finances, I walk you through how to prioritize and CAPitalize on that extra cash in a way that actually moves the needle on your financial goals.
So, what should you do with that extra cash? Here’s a smart, strategic approach that ensures your money works as hard as you do.
1. Start with the Basics: Emergency Fund + High-Interest Debt
Before anything else, make sure your emergency fund is solid—ideally 3-6 months of living expenses. If you have high-interest debt hanging over you, it’s time to tackle that next. Paying off those balances should be a top priority to free up your future financial freedom.
2. Build for the Future: Retirement, Goals, and Freedom
Once you’ve covered the essentials, start thinking about long-term goals. Max out your retirement contributions, whether it’s your 401(k), IRA, or both. Then, focus on saving for the big milestones—buying a home, going on that dream vacation, or starting that business you’ve always wanted.
3. Leverage Underused Tools: HSAs and Donor-Advised Funds
Often overlooked, both Health Savings Accounts (HSAs) and donor-advised funds offer unique benefits. An HSA can grow tax-free and be used for medical expenses, while a donor-advised fund helps you give back while reaping tax advantages. These tools can be powerful when used strategically.
4. Treat Yourself—Responsibly
It’s important to celebrate your wins! While financial planning is key, it’s also essential to enjoy life along the way. Finding that balance between treating yourself and staying on track with your financial goals is the key to long-term happiness.
If you’re wondering how to make the most of your extra cash each month, the right strategy can help you achieve your financial goals while still enjoying life. There’s no one-size-fits-all answer, but with the right plan, your surplus cash can work harder for you.
Curious about more tips and strategies for managing your finances? Tune in to the latest episode of CAPitalize Your Finances to dive deeper into these topics and start taking action today!