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Budgeting & Saving
4 minute read

If you’re fortunate enough to have cash left over at the end of the month, you may be wondering what to do with it. While it’s tempting to spend it on something frivolous, saving or investing the extra money could result in a long-term financial benefit. In this article, we’ll explore ways to use extra money at the end of the month that could benefit you down the road.

Commit to saving

Saving money is a smart financial practice. A solid savings plan can provide you with a safety net in case of emergencies or unexpected expenses. Start with basic priorities for saving, like starting or building up your emergency fund.

An emergency fund acts as a financial cushion and can help you navigate unexpected life changes or surprise expenses.

Your emergency fund should ideally have:

  • A minimum of $1,000
  • Enough savings to cover insurance deductibles
  • 3-6 months worth of living expenses

Even small contributions to your emergency fund can bring you closer to financial stability and peace of mind.

If you have enough left over, or your emergency fund is in a good spot, you may also want to set aside money for an upcoming large purchase. Maybe you’re planning a dream vacation, looking at a new car, or a destination wedding. Whenever you have extra money at the end of the month, consider putting it toward these savings goals. Over time, you’ll accumulate enough to make your dreams a reality.

Invest in the Future

Another option for your extra money is to invest it. Before diving into the world of investments, it’s essential to ask yourself 2 questions:

  1. How much risk are you willing to take with your money? Investments can range from low-risk options like government bonds to higher-risk options like stocks. Understanding your risk tolerance will help you make informed investment decisions.
  2. How much money will you need to have on hand in the short and long term? This will guide your investment choices and ensure you don’t lock up your money in an investment if you need it sooner.

Consider a retirement fund

Saving for retirement should be a priority when it comes to investing. Every contribution you make now has the potential to grow with interest until you retire. If you don’t have a retirement account, using your extra money to start one is wise. Research contribution limits for different retirement accounts and seek advice from financial professionals before making any investment decisions.

Save for college

If you plan to pursue higher education, or if you have a young family member who will attend college, saving early is a smart play. Tuition costs are steadily rising, and setting aside funds can help offset these expenses. Every penny saved can make a difference in reducing potential student debt.

Get ahead on monthly payments

Another option is to get ahead on monthly payments. Using extra money to pay off debts or upcoming bills can help reduce stress and put you more in control of your finances. Prioritize high-interest debts first to save on interest payments in the long run.

Treat yourself

Saving and investing are crucial for long-term financial stability, but it’s also important to live in the moment. If you’ve been disciplined and already set aside funds for savings and investments, go ahead and splurge a little. Treat yourself to a new outfit or a nice evening out with friends. Splurging once in a while is okay, but don’t let it become a habit.


Deciding what to do with extra money at the end of the month is a luxury. Congratulations if you’re in the position to determine how to use it. While immediate splurging may be tempting, the wisest choice for you depends on your specific circumstances. Take the time to assess your goals and make a decision that aligns with your financial aspirations. Whether saving, investing, or spending, don’t be afraid to seek professional advice and choose a path that will contribute to your overall financial well-being.

This article is for educational purposes only and is not intended to provide financial, tax or legal advice. You should consult a professional for specific advice. Best Egg is not responsible for the information contained in third-party sites cited or hyperlinked in this article. Best Egg is not responsible for, and does not provide or endorse third party products, services or other third-party content.

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