What would you do with $1,000 right now?
Okay, it’s not a life changing amount money, but it could be just enough to set you on the path to financial freedom. Let’s take a look at a few constructive ways to apply $1,000 and have a significant impact on your future
1. Establish an Emergency Fund
This is part of Dave Ramsey’s “Baby Step #1 – Save $1,000”. It’s advisable to have 6 to 9 months of emergency money built up just in case unforeseeable events happen. This emergency money should be less accessible than a checking account. This could save your credit from being damaged in a difficult time.
2. Pay Off Debt
Here at Snowball we are particularly fond of paying off debt as quickly as possible. Especially if you have high interest credit card debt. The typical credit card company charges between 12% and 14% for interest. Applying that $1,000 to your credit card could save you $140/year. Let us know if you find an investment out there that guarantees 14% on your money 🙂 It most likely doesn’t exist, so you want to make sure you’re debt free before you start investing outside your 401K or other retirement vehicle.
This is why Snowball was created. Snowball makes debt elimination easy by applying Spare Change from your everyday purchases to the balance of your credit cards and other debts. Because the amount is less than the cost of a cup of coffee every few days, you won’t need to adjust your budget to accelerate your debt reduction.
3. Your Children’s College Fund
Open a 529 Plan account for your children. Your money can grow tax free and distributions for qualifying college-related expenses are tax-free. Once you open the account it will be easier to contribute to it each month. Start small and as your budget adjusts contribute more.
4. Buy Insurance
Term policies are generally better deals than whole life ones. A small amount of money can go a long way when it comes to protecting your family and anyone who is depending on you financially.
5. Invest In Your Home
For many people, their primary residence is the largest investment they will make. With $1,000 you will certainly be limited to the renovations you can make to your home. But a focus on energy efficiency and aesthetic improvements will not only add value to your home, it will add to your quality of life.