Oh no, this was the worst for me. A paycheck came in, and somehow, I had money left over. I could make extra money by working overtime.
When in the situation, I was often perplexed about the best way to invest spare cash.
First, that thought about investing was not the first thing I thought of when I was younger. I never had spare cash since I immediately blew any money on whatever impulsive purchase I could make.
Often, I operated at a negative net worth, so there was no such thing as spare cash. 😀
OK, but to the point of this post, try to address this with years of hindsight experience.
What Have I Learned Is The Best Way To Invest Spare Cash?
The best way I learned to invest spare cash is in a savings account, separate from your regular checking account bank.
This way, you can keep the money available, earning some interest( In Which Situation Would A Savings Account Be The Best Investment To Earn Interest? ) while figuring out what happened and what to do with the spare cash.
Why Spare Cash Might Not Be Ready For True Investing.
In the past, I learned spare cash was often the result of a poorly calculated monthly budget or forgetting to pay a bill.
So… almost every time, spare cash was needed as soon as I figured out what bill I forgot to pay.
So, I learned to keep that spare cash from ever sitting in my regular banking account(checking or savings) since I would constantly see the balance and wonder if there was extra stuff I wanted to buy for myself.
Hopefully, the money didn’t burn a hole in my pocket by moving the spare cash to a separate bank, in a High Yield Savings Account. I can better plan the money using my brain instead of my emotions.
Know Thy Budget, Like Know Thy-Self.
Budget Warning: If I find spare cash in my budget, I need to know where it came from:
- Did I work overtime?
- Christmas bonus? (Like As-if)
- Did I pay off one of my debts(Using the Debt Snowball)
There must be a reason for the spare cash, and if I need to know where it came from, till I do, that extra money is invested into a secure savings account.
Get my budget reworked and my mind back on track.
Then, just like there shouldn’t be any spare bills, there shouldn’t be any spare cash. Every dollar needs a purpose, even if it’s budgeted for fun. 😀
Spare Cash Invest FAQ Recap:
So, the best place to invest this spare cash is in a separate bank’s savings account/HYSA.
Once I figured the spare cash wasn’t a fluke, I followed the Baby Steps of Financial Peace University‘s recommendation for eliminating debt through the debt snowball.
If I had no outstanding debt, I would continue investing any spare cash, depending on my step in the FPU Baby Steps. You can read more about my passive income generation through investments throughout this blog, but here is one of my posts: What Is The Easiest Passive Income Generator (PIG)? – FAQ
 Myself with an interesting Bull Sculpture. Notice: No Lambo’s. :/ | Hi I’m Tom, A Blogger And A PIG Farmer. PIG Farmer as in I grow Passive Income Generators(PIG’s). I’ve been playing with stocks, mutual funds, and options for decades, as well as always working on my side hustle stacks. Unlike what you read online, I’ve yet to find a way to get rich quickly. Get Rich Quick isn’t happening for me. My journey has been long and continues. I hope to have so many PIGs I can stop working at my current job and volunteer as a medical worker overseas. Still waiting, but getting there. I still am a family man, and while on this Journey of Growing PIGs.  I wanted to share my adventures(ups and downs), hoping you will contribute with your feedback and comments. Fun Fact: In my spare time, I am a Band-Dad! |