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Budgeting & Saving

Did you just balance your monthly budget and find out that you have some extra money? While you may be tempted to immediately spend it on something new or exciting, it’s better to take a moment to consider how you could smartly spend that money. Here are three different ways you can spend extra money in your budget at the end of the month.

Commit It to Savings

Saving is hard, but it’s essential for good financial health.

The first kind of savings you should have is an emergency fund. It could put you in a better financial position should you experience any emergencies, life changes, or surprise expenses.

At a minimum, your savings should have:

  • an emergency fund with $1,000,
  • enough savings available to cover insurance deductibles, and
  • three to six months of living expenses.

Any little bit you can contribute to your emergency savings gets you one step closer to being on solid financial ground in case of an emergency.

While it can sometimes feel like a drag, saving doesn’t always have to be boring. You can also save for something exciting in your future, like a dream vacation, a new car, a destination wedding. As you are able—like when you have extra money at the end of the month—you can fund that savings account until you have enough to make your purchase.

Invest in the Future

Another option for your money is to invest it.

Before you start investing, ask yourself two important questions:

  • How much of a risk are you willing to take with your money?
  • How much money do you want to have available if and when you need it?

While there are plenty of options when it comes to investing (and we always encourage you to speak with financial and investment advisers before making any investments), here are two common investments.

A Retirement Fund

Saving for retirement should be a priority for your investments. Every little bit you contribute now has the opportunity to grow with compound interest until you retire.

If you don’t have a retirement account, use your extra money to start one. That way, when you have another month with money left over in the future, you can continue to fund your retirement. For some retirement accounts like IRAs, there may be limits on how much you can contribute each year, but it’s always something to look into.

It’s not a fun way to use the money (and it won’t feel gratifying at all right now), but you will thank yourself in the future.

A College Fund

Whether you plan to go to school in the future, or you have a young one in your family, another good investment is to save for college. The projected tuition for a four-year degree at a public, in-state university in 2033 is nearly $100,000. That cost by the way, does not include living expenses, books, supplies, transportation, or anything else a college student might need during their college year.

That’s a lot of money, and a significant amount of potential debt.

Anything you can save for higher education could help offset those high futures costs. Even if you can only afford to save a little for your child’s college education, your savings represents debt they won’t have to take on.

Keep in mind that financial advisers strongly urge you to be in a good financial place before you start saving for college.

Create a Joyful Moment

You could also simply spend that extra money.

Maybe you’ve recently cut out a lot of expenses you enjoy in order to save. If you feel like you’ve been pretty disciplined (and you’ve already set aside savings and investments) then you could spend money on something that makes you happy.

Get Ahead and Feel Good

Ever thought about getting ahead on monthly payments? Depending on how much you have left, spending extra money in your budget on upcoming payments might be the better option for you than saving or investing.

Debt can strain your financial health and weigh heavily on your mind. If you have a high accumulation of debt, especially high-interest debt, you can put your extra money toward paying down those debts. Getting ahead could make you feel good about where your money is going.

Treat Yourself!

Treating yourself to something nice is also our last way to spend your extra money.

Be careful that you don’t treat yourself every time you have a little extra to spend. Treating yourself to something nice is a reward for working hard, but it’s dangerous to fall into the habit every time you have a little cash leftover.

Carefully Consider the Best Option for You

Having extra money in your budget at the end of the month is an unexpected luxury, and it can be difficult to decide where that money is ultimately going to go. While always tempting to immediately splurge, take a moment to think if that really going to help you out the most in the end.

Consider your overall financial health and the big picture of your financial future. Whether that is saving, investing, or spending can get the most value for your money.

This blog is for informational purposes only. Best Egg does not give or solicit official investment or financial advice. 

For more information about retirement accounts visit For interest calculators and other financial planning tools, visit

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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