What to do with an Extra Income

Let’s say by some miracle, you and I can save some money.

What are we going to with that money?

We can build a plane or go on a shopping spree in Paris. Oh, how about we purchase a huge cake and jump in it?

Now, let’s take a step back and think carefully about what we should do – as adults – disregarding the notion that a giant cake sounds amazing right now.

Instead of spending that money on tangible items that will go out of style or you forget you have it, I suggest doing a few other things.

1. Eliminating Debts

This one is kind of obvious, after all, who wants to go to bed at night knowing they got a load of debts waiting for them. I suggest paying off the lowest debt and eliminating that first. Afterward, pay the one with the highest interest rate and always pay on time. You want to keep your credit score at its tip-top shape!

2. Mortgages

If you own a house or a car, I suggest chipping a bit extra and paying that first. You may think it is not much, but it does make a difference.

3. Student Loans

Similar to debts, pay that off before it accumulates with interests. I suggest paying by the maximum for your debts, not minimum. Better yet, try not to take out student loans while you go to school. Many new student hold a tendency to think about the moment not the future – do not become one of the students.

Related: How to Minimize College Debts

4. Retirement

It’s never too early to think about retirement. The sooner you save, the sooner you can relax when its time to take off the working hate. Every penny you save is going to worth more in the future, granting you a little more breathing space.

5. Savings

Now, I’m not saying that paying loans isn’t essential but saving money is a tad more necessary because you never know when an epidemic will occur. You don’t know when your wheel might pop, or you may slip down the ladder.

Related: Simple Financial Tips & 7 Steps to Financial Independence

6. Invest

I am not only talking about the stock market, such as Acorn but you can invest it in yourself. Of course, its tricky at the beginning but I believe in you. You can open a small business or start a blog. There are infinite amounts of way to invest in yourself. The hardest step is to go out and do it.