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Money left over after monthly expenses? Here’s what to do.

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Rarely in my twelve+ years as a blogger have I gotten to really dig in on a post about what happens when there is an abundance of money. Between flips, layoffs, teaching others how to budget better — the term “money left over” isn't really one I get to say all that often. So this post that answers the ever-important question, “What should you do with all the money left over after all monthly expenses are paid?”, is a really exciting one for me to write.

Have you ever found yourself with some extra cash after paying all your monthly expenses? It's a great feeling to have some financial breathing room, but the question remains: what should you do with all that money? In this blog post, we'll explore some smart strategies for managing your surplus funds. From budgeting for expenses to saving for the future and even allowing yourself some play money, we'll cover it all.

But before we talk about what to do with what you have leftover, let's (briefly) touch on how to allocate the money you have coming in each month.

Making sure your monthly expenses get paid

When it comes to allocating the money you have coming in each month, it's important to prioritize your expenses. Start by creating a budget that outlines all of your monthly expenses, including bills, groceries, and any other necessary costs. Once you have a clear understanding of where your money is going, you can then determine how much you have left over to allocate towards saving and spending on non-essential items. Here are some posts that can help:

After your main expenses — here's what comes next

I consider “expenses” — your total budget: bills, savings, and fun. This post covers what you should do once all of your monthly financial “to dos” are covered. But I can understand how many are asking what they should do after all the primary bills get paid, so I'll explain below how to tackle that.

After covering your essential expenses, it's crucial to prioritize saving for the future. Consider setting up automatic transfers to a savings account or investment account to ensure that you are consistently putting money away for emergencies or long-term goals. (The 20% of the 50-30-20 method). Additionally, it's important to allocate a portion of your income towards enjoying yourself, whether that be through dining out, travel, or hobbies. Finding a balance between saving for the future and enjoying the present is key to financial well-being.

What should you do with all the money left over after all monthly expenses are paid?

Let's imagine that you think like I do and your “leftover money” is what happens after all the categories are covered: bills, saving for the future, and fun. The full 50-30-20. Then what? Here are a few fun ideas:

When it comes to what to do with all the money left over after all monthly expenses are paid, there are several options to consider.

  • One option is to save and invest the money for future financial security. Even more above and beyond what you're currently doing. This could include contributing to a retirement account, such as a 401(k) or IRA, or investing in an Health Savings Account (HSA) or in the markets: stocks, bonds, or for your kid's education in a 529.
  • You could also invest in commodities or real estate. (Here's more about my journey with real estate investing.)
  • Another option (if you have it) is to pay off any high-interest debt, such as credit card debt, to save money on interest payments in the long run. Many like to allocate extra money to paying off their mortgage early, which is a good option, but often the markets offer a better return.
  • Additionally, you could consider donating some of the money to charity or using it to treat yourself to something special, like a vacation, new piece of tech, or home project.

If I had money left over at the end of the month, here's what I'd do.

  • Put in my emergency fund (sexy, I know)
  • Allocate for an extra trip we want to take in the Fall
  • I would probably buy some clothes (just keeping it real)
  • And do extra HSA/IRA contribution to make sure I'm maxing that out this year

Personal finance is super personal

These are just suggestions. How to use money left over at the end of the month is really up to you and what you value and what your financial priorities are. For example, these days because my income as a real estate agent can be super unpredictable, any extra I have goes toward beefing up my emergency fund. After being laid off, I want a year plus of expenses. I'm also a mom now, and so I save for my son's education in addition to retirement.

But it may look differently for you depending on where you are. Extra money is always nice to have — at the end of the day — do something fun with it, but also use a little bit to achieve your most highly-valued financial goals faster.

And keep kicking ass.

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