5 Future-Focused Things to Do with Extra Money

5 Future-Focused Things to Do with Extra Money


Written by John Rothans

Jul 7, 2021

You planned. You budgeted. You checked all the boxes on your financial wellness checklist, and now you’re sitting on a little extra cash. The question is, do you spend it on something that will break or fall out of style, or do you use it to maximize your financial future?

Here are five things to do with extra money that don’t involve buying something with little chance of lasting a lifetime.

1. Pay Off Credit Card Debt

In fall 2020, Americans carried an average credit card balance of $5,897—a not insignificant amount of money.

When you pay off your credit card balance in full each month, you avoid paying interest. But when you go from month to month with a balance, you rack up interest charges.

Given that the average APR (annual percentage rate) for a credit card that charges interest hovered close to 16% in early 2021, it’s in your best interests to lower your credit card balances to zero as soon as you can. If you’ve wound up with some extra cash, it’s a smart move to put at least some of it toward reducing credit card debt—especially if it is high-interest debt.

2. Start an Emergency Fund

About one third of middle-income Americans have enough money set aside to cover six months of living expenses, CNBC reports. If you’re among them, congratulations!

But if you’re not in that group, consider stashing at least some of your extra cash in an emergency fund (ideally in an interest-bearing savings account). This advice applies to anyone, not just middle-income folks. Experts recommend you squirrel away money in an emergency fund to cover at least three to six months of living expenses.

Remember that this money should be used only for an emergency. By “emergency,” we don’t mean a vacation or a new TV. We mean medical bills, car repairs, and other unexpected situations.

3. Save for Retirement

Retirement. It seems like it’s so far away. In reality, though, you get closer to retirement every day. So are you saving enough for the day you decide to quit working and start relaxing more?

A report released in 2021 found that one fourth of American adults lack any retirement savings, and those who are saving for retirement aren’t saving enough. When you wind up with some extra cash, it’s wise to earmark at least some of it for your golden years through an employer-sponsored 401(k), a traditional or Roth IRA, or another retirement vehicle like a self-directed precious metals IRA.

4. Explore Alternative Assets

You’re likely already familiar with traditional assets—things like stocks, bonds, mutual funds, and exchange-traded funds (ETFs). But what about alternative assets? The category of alternative, or less conventional, assets includes real estate, artwork, antiques, and precious metals like gold and silver.

Key advantages to alternative assets are that they can diversify your portfolio and combat market volatility. In addition, their returns might be higher than those of traditional assets. If you’ve accumulated some extra money, you might consider alternative assets to supplement your portfolio.

If you settle on gold or silver, keep in mind that you can purchase bullion bars and coins, which are widely viewed as safe-haven assets and a desirable way to store wealth.

5. Focus on Generational Wealth

In a recent article, The Wall Street Journal declared that the “greatest wealth transfer in modern history has begun.” The newspaper cited data predicting that older generations will hand down about $70 trillion in wealth between 2018 and 2042.

That’s an impressive number. However, are you in a good position to eventually pass along your own wealth to your children and grandchildren? If you’re not confident about the answer to that question, perhaps it’s time to allocate some extra cash for your family and future family. Generational wealth is a great legacy you can leave to your loved ones.

How do you build generational wealth? Among the methods are buying stock, contributing to a workplace retirement plan, purchasing real estate, taking out a life insurance policy, or adding precious metals like gold and silver to your portfolio. Watch the video below to learn more about turning your cash into a lasting wealth-builder, like gold!


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