Extra Cash? 5 Smart Ways to Use It

Expecting extra cash this year? Whether you expect a tax refund, bonus from your employer, inheritance, or cash gift, it may be helpful to start thinking strategically about how you can use that money to create even more savings.

Consider these five ways to maximize that extra savings today to see even more cash tomorrow.

If you’re carrying high-interest debt such as credit card balances or personal loans, that interest is cutting into your progress faster than you can build it.

That’s because high-interest debt has you paying extra to go nowhere, requiring you to use a significant percentage of your earnings each month for interest payments. If you can prioritize paying off the debt, you can have the extra funds to meet your savings and other goals.

Consider using extra cash like a bonus or tax refund to pay down debts, so you can free up monthly income to save more towards other goals.

If you’re thinking about using extra cash to boost your savings, you’re not alone. For instance, almost 30% of Americans expecting a tax refund said they planned to add it to savings.¹ It’s always a good idea to set aside savings for a rainy day or a specific purpose, such as building an emergency fund.

When you add your extra cash to a high-yield savings account like Growth Savings, the higher interest rate allows your savings to grow faster than it would in a checking account.

In fact, a high-yield savings account offers flexibility with higher returns than a traditional savings account, making it a good place to store emergency funds or save for an important purchase. And with Growth Savings’ unlimited number of transfers and no account fees, you can set up recurring transfers to keep your savings growing all year. To see how much you can save over time, check out the savings calculator on our Growth Savings page.

Many of us have a financial wish list, such as building an emergency fund, maxing out retirement plan contributions, or funding a 529 for a child’s education. You may want to use your bonus, tax refund, or other extra cash to make progress toward one of the important goals on your financial wish list.

Check a goal off your list early in the year and feel good knowing you accomplished your goal!

In addition to making progress towards your financial goals, you probably deserve to splurge a little too. You may want to use a portion of your extra cash to treat yourself, whether it’s for a special meal out, a home improvement project, or a weekend getaway.

Enjoying the rewards of your hard work sometimes can be a refreshing and motivating way to keep saving.

Finally, think about taking a portion of your extra cash to donate to your favorite charitable organization. You can feel good about making a difference and building a brighter future, while also getting to take a deduction on next year’s taxes.

Disclaimer: This article is for general information and education only. It should not be considered financial or tax advice.

¹ _{https://www.bankrate.com/credit-cards/news/debt-repayment-strategies/}