The Best Ways to Use a Few Hundred Dollars

So, you have some money coming in for which you didn’t plan. Maybe you’re getting a tax refund? Or you finally had that garage sale? Possibly you received a bonus at work? From whatever the source, you have a decision to make.

Sometimes it can feel like you need thousands of dollars to move the needle on your finances even a little bit. So if you find yourself with a few hundred dollars, the temptation to spend it can be great. After all, how much difference can $500 make? But used wisely, even a few hundred dollars can put you on the road to a more financially secure future. Here are 4 (Productive) Things Can You Do With Money.

1. Spend It

What can productive things can you do with your money? Spending can be a positive, or a negative. Blowing it on one big splurge might feel good temporarily, but it might also give you a hangover. Putting it into checking can give you some breathing room, but ultimately you will spend it- and probably won’t know where it went.

Perhaps now is the time to fix that leaky faucet, get the new set of tires, buy the paint for the spring project, or something else you have been putting off. Spending it could be your best choice. But what about the other three productive things you can do with your money?

2. Save It

Start an emergency fund. Ideally you want six months of living expenses stashed to cover unforeseen expenses, but $500 is a good start. And once you have a good start, it can spur you to keep contributing.

Save for a bigger-ticket expense. If you foresee a need from a few months to a few years in the future, start saving now, so you can pay cash when you need it. This could include a down-payment on a vehicle, or major repairs on your  vehicle or home. It might be for a dream vacation. The key is to use some form of savings account to put your money aside, where it can earn dividends (interest). Whenever you have a little extra money come in, set it aside as well. You could end up with a gift the whole family will cherish for years.

There are a few different choices for savings. Basic savings accounts pay small amounts of dividends, but you can get your money at anytime. Share Certificates (CDs) require a specific deposit (often $1000 or more) and that it be stay untouched for a period of time, but pay higher dividend rates. Some special savings accounts pay more based on the amount on deposit, and the funds are accessible. Mid Oregon has several saving account options which may fit this need, including our Savers Club.

3. Invest It

If your big ticket expense is further out, like retirement, a home purchase or college tuition, investments might be a better choice. Typically when the need is more than 4 or 5 years down the road, investing provides a potential higher rate of return, and the risk factor can be smoothed out over time.

For retirement, you can fund or add to your IRA (Individual Retirement Account), which can have tax benefits in addition to investment increases. For this and other purposes, finding a trusted advisor to help you invest is critical. Mid Oregon has a financial advisor in house, Mid Oregon Financial Services. Mid Oregon Financial Services provides retirement planning, financial guidance, Long Term Care Insurance, 401(k) Planning, and Life Insurance Planning.

4. Give It Away

Donate to charity. If you itemize deductions on your tax return, consider helping an organization whose works you admire. Not only can you deduct the gift, but it might ultimately mean more to you than spending the money on yourself. Mid Oregon Credit Union often provides its members opportunities to pool donations with other members to support local organizations.

Adopt-a-Bear, in April, supports Healthy Beginnings. The Great Drake Park Duck Race provides tens of thousand of dollars every year to each of 6-8 local organizations. Supplies 4 Schools in August gets needed school supplies to Central Oregon students through the Family Access Network (FAN). During the holiday season, several local agencies benefit from Mid Oregon’s “Holiday Dough” effort. There is no shortage of opportunities to help in Central Oregon.

Considering the best use of your “found money”, you can find the best ways to make it work for you.