5 Smart Ways to Spend Extra Cash

Once in a while it happens, you end up with a some extra cash. Tax season is coming up, and maybe you’re thinking of what to do with your tax return. Here are 5 ideas on how you may want to use some extra cash.

Pay down credit card debt

It may not be enough to wipe out all of your credit card debt, but choosing to pay towards the highest interest rate credit card is a good idea. Paying down credit card debt will save you interest. Also, it can improve your credit score. Credit utilization is the amount of your debt in relation to your credit limit. It is recommended to keep this number below 30 percent. As you pay down your cards, your utilization score will drop, improving your credit score.

Add to or create emergency fund

When it comes to emergency funds, it’s better to be prepared than sorry. No matter what your financial circumstances currently are, life has a way of throwing you curve balls. And these “unexpected expenses” can really hurt your finances now and for years to come. That’s why financial experts recommend building an emergency fund right now to prepare for those financial emergencies when they come. Click here to read our blog post all about emergency funds. 

Put money aside for holidays and birthdays

Your future self will definitely thank you for this. Having money to spend on holiday and birthday shopping means you’ll be ahead of the game and you won’t be borrowing the money. Having this money saved will help you stay on track with your budget and financial goals. 

Pay down student loan debt

Student loan payments begin again in May 2022. Lenders will send borrowers a statement, which includes their next payment amount and due date, no later than 21 days before due date. Be prepared, make sure contact info is up-to-date and have your payment ready. Paying down student loan debt can be a smart choice if you’re in the market for an auto loan, mortgage, or personal loan because it may improve your debt-to-income ratio, which could make you more attractive to lenders.

Contribute to your Health Savings Account

HSAs have impressive triple-tax benefits, but they have limited availability and relatively low contribution limits. Money goes in pre-tax, there’s no annual taxation, and funds can potentially come out tax-free when used for qualified medical expenses. There’s no “use it or lose it” feature, so you don’t need to spend the money each year. Check with your health insurance provider to determine if you’re eligible to contribute to an HSA.

Each of these options can be financially healthy choices for that extra cash. If you are looking for a personal, financial management tool that allows you to organize, track and control their money, check out RentPlus Money. You will be able to aggregate all your accounts in one place, view your income and spending by category, create a powerful budget, as well as set meaningful and attainable financial goals. RentPlus has helped thousands of renters build their credit, become better educated in financial matters and manage their money more successfully.