So you just had an amazing month (or two or three) freelancing. What should you do with the extra dough you made?
First off, congrats! If you had a windfall of money, you could very easily just blow it all, but then again you might suffer from a bout of regret.
Use it get it ahead instead. Here are some ways:
Save according to the Tiered Approach.
This is where the Tiered Approach comes into play. If you’ve had a few cruddy months and haven’t had much in your Luxe Budget, then you can put your extra money toward some of your specific established goals. Figuring out what your priorities are ahead of time will make it easy for you to save when you get some extra cash.
Pay down debt.
OMG so boring, right? But your future self will certainly thank you. One thing you might want to try is set a savings goal with a specific amount a free budgeting app such as Mint, LearnVest, or Level Money. A lot of bank accounts these days have a “savings goal” function. Once you save X amount, say, $200 toward your “Pay Down Debt” goal, you can dump that into paying down your debt. There’s something satisfying about paying a chunk off and seeing the amount you owe get crushed.
Put it toward your emergency fund.
I highly recommend at least 3-6 months savings on barebone expenses (i.e., your Basic Number), and up to 12 months if you can swing it. It’s super important to have padding if you work for yourself or are doing the freelance hustle. The thing is if you don’t have any buffer money, you may find yourself resorting to using credit.
Save it or invest it.
There are a few apps that will take a few bucks here and there from your spending and put it toward your savings or investment goals. There are quite a few apps and online programs out there to help you with this. Simple banking has “Safe-to-Spend” feature that deducts your monthly expenses savings goals and lets you know how much money are free to spend. For investing you might want to check out Acorns, which essentially “puts your spare change toward investing.” I’ll get more into investing basic and fun tools on this ish at a later date.
By all means, you could use a bit of it to enjoy a fancy meal out or buy that you’ve been eyeing (and dreaming about) for quite some time. But don’t forget to put some it toward your long-term goals to work alongside your values. Because at the end of the day, what’s really important to you?
photo credit: 1028214 via photopin (license)
