Getting unexpected extra money is great, but what should you do with it?

If you’ve already completed your taxes this year, well done! Being proactive in filing your taxes is responsible and less stressful compared to waiting until the last minute. It’s likely that you’ve already received your tax refund for 2020, and it might be different due to the various changes brought on by the pandemic, such as shifts in employment, insurance adjustments, and stimulus checks. Now that you have a substantial sum of money in your hands, it’s time to decide how to make the most of it.

If you have any outstanding debts from 2020 – a common situation for many people – the first priority should be paying off those debts. Whether it’s credit card bills, overdue rent, utilities, or other essential expenses, settling these debts promptly is crucial. While having extra cash is appealing, being free from the burden of debt is even better.

If your finances are in good shape, consider using the money for practical purposes. You could allocate it towards improving your home by making necessary repairs, purchasing new appliances, or giving your living space a makeover. Alternatively, you might explore investing in the stock market if you have some knowledge and are willing to take a risk. Following the recent events involving GameStop, there has been increased interest from novice investors offering insights and guidance, so you might find an opportunity for a strategic investment.

If these options don’t suit your current situation, depositing the money in a savings account for emergencies is always a wise choice. Having a financial cushion for unexpected expenses can provide peace of mind and security for the future.