Being smart with money doesn’t mean never spending it — it means learning what’s *actually* worth it. Here are some of the best things you can do with an extra $100. Want more tips on spending $100? Check out this video:
Hi i’m chelsea and i’m lauren and we are the financial diet and today we’re going to be talking about what to do with a little bit of extra leftover money that you might have at the end of making your budget now for ease and clarity we are going to be using a hundred dollars as an example but it could be more or less and also keep in mind that if you wanted to
Add this money to your budget you could look at it as the money that you get from one extra side job a month so for some of you the thought of having you know leftover discretionary income at the end of the month can seem insane because it’s like all too easy to run into sephora or cvs and kind of just like spend 50 bucks in the blink of an eye i mean it’s i’m
So guilty of that so we’re going to be providing you guys with some smart solutions for how to spend that discretionary income better now ideally we would recommend that this money go one of three places and that’s savings retirement funding or personal goals so however you’re spending make sure that you’re spending with intention i mean even if it’s spending on
A long-awaited trip that you’d saved up for make sure that you’re writing everything down cutting corners where you can and really kind of directing where your money is going to save it the right way now with this imaginary hundred dollars at the end of the month one of the first options of what to do with it is to invest it now if you’re looking to invest this
Money of course it’s always important to consider things like the different fees your investment goals your risk tolerance what you hope to accomplish with that specific money but if you’ve never invested before one of the easiest places to get started is purchasing stocks and companies and if you already have active investments obviously you can decide where you’d
Like to allocate this money of course given those same criteria of the fees the risks the goals etc now if you’re only working with a small amount of money every month it might be good to consider brokerage accounts that offer etfs which are commissioned free now etfs are exchange-traded funds which we discussed in our previous investment video and we will link to
That in the description allow you to dollar-cost average which means buying a fixed amount of a particular investment on a regular schedule regardless of the share price and it’s of course always an option to consult with a financial advisor particularly if this is your first time investing so check out companies like fidelity schwab etc but keep in mind that on
Top of their fees they may require that you have a minimum the mountain your account in order to invest but at the very least they will offer a lot of educational stuff for free online and you can always go in for an initial consultation so the second way that you can spend your discretionary income at the end of the month is to pay down lingering credit card debt
You want to focus on the credit card debt that has the highest interest payments this can even apply to student loan debt and paying off debt with the highest interest rate you can make a higher monthly payment on a student loan and if you do this for long enough you can actually reduce the amount of their payment period there’s no rule that says that you have to
Pay the same amount every month if you find yourself with a little extra money do yourself a favor and throw it toward those student loans so for example if you had a debt of $20,000 that had a 5% interest rate and you just overpaid 50 extra dollars a month on it you’d reduce that repayment period from ten years to seven years and eight months that’s more than two
Whole years shaved off and you’d save about one thousand three hundred and thirty six dollars in interest so the third great way to use this extra money is to top-up your emergency fund now of course we should specify that all of these other suggestions we’re giving are operating under the impression that you already have your emergency fund because you definitely
Should but if we’re all being honest there are lots of reasons to kind of go into your emergency fund every so often and spend on things that you probably shouldn’t be so if you ever find yourself with you know a little bit of a gap in what you should be having go ahead and top that up it’s more important than pretty much anything else in your financial life that
You always to have that emergency fund at the number it needs to be so the fourth great way to spend that extra hundred dollars at the end of the month would be for upgrades repairs and maintenance for your home so upgrades really make sense when you own your home because you’re increasing the value of it and repairs and maintenance apply in both cases whether
You’re renting or you’re buying now obviously there are going to be certain things when you’re renting in terms of like maintenance and repairs that fall under the domain of your landlord but there are also lots of things you can do while renting that will improve your quality of life and also possibly save you money for example if you kind of take the time to go
Through and replace your light bulbs with more energy-efficient ones you can kind of rearrange your furniture to make the most use of natural light as well as air flow and you can even make small upgrades to increase how much heat you can retain and how cool you can keep it in the summer so that you’re just not wasting money that you could otherwise be saving while
Renting now a fifth thing that you can do without extra hundred dollars a month is to reinvest that in your career now that means you can take that money and invest in things like workshops or tutoring or even going back to school for a class or even an entire degree there’s pretty much a whole spectrum of things that you can do to really increase your current skill
Set and gain new skills for example the tfd team from time to time will invest in things like you know online courses about grammar or workshops or software just to kind of brush up on our skills yeah i just recently actually bought a food photography course for bloggers on skillshare so that’s you know a great investment for the work i do at tf d and i actually
Have a friend who recently signed up for a local course at her community college to kind of give herself a crash in spanish because she knows that at her particular job people who speak both english and spanish tend to have way better salaries and get promoted much much quicker now the sixth thing that you could do with a little extra money every month is give it
Away but in a smart way and that includes everything from things like patreon or kickstarter to ideas and projects and work that you might like or microloans which you can find throughout the world or even just pure charities and we at tfd kind of do a mix of all three and each are really beneficial and bring a lot to us for their own reasons so some examples of
Charities that are relevant for us would be you know the bowery mission in new york city planned parenthood local charities for education in the area anything like that it’s just really worth your dollars and they can put them to work in a way that’s smart and really does good for the community and if it comes to any kind of online project or content that you really
Enjoy it’s worth it to check out and see if the creator’s have a way that you can sponsor them so you can give a little back for the thing that you enjoy every day we say giving money away but that’s really a joke i mean you’re donating it but you’re getting something back that’s huge in return and that’s a huge boost in quality of life and plus the feeling that
You’re really having a tangible impact which is something that you don’t always get to feel every day so no matter how you choose to use that extra hundred dollars at the end of the month just make sure that it’s something smart intentional and thoughtful and not hemorrhaging it on q-tips and nail polish which is what we often do although you need q-tips that’s
About unique you tube so you clean your ears like soap come on body wash spending money on shampoo it’s 2016 so as always thanks for watching and don’t forget to hit the subscribe button and go to the financial diets calm for more bye
Transcribed from video
6 Smart Ways To Spend $100 | The Financial Diet By The Financial Diet