So, let’s say you come into an extra $20000. Maybe a relative died, maybe you won a small amount on the lottery or you got a sizable bonus at work. Whatever the case may be, you have extra cash and you need to know what to do with it.
What Should You Do With $20000?
There no clear answer as to what you should and should not do if you come into $20000. All of it depends on your current financial situation. Here’s how you should approach what to do with $20000:
- Save. Not many people have enough savings to cover small emergencies ($1000 or less). Make sure that if you come into any windfall, especially one as large as $20000, you put some of your cash in savings. Having a safety net like that will always provide peace of mind and help you generate some wealth over time (if your bank’s interest rate is good). If at all possible, try and put at least half of every windfall into a savings account.
- Pay off and pay down debts. If you have any debt, try to pay it down or off with your newly-acquired cash. People who are deep in debt should probably try to pay their debts off before anything else (after saving, of course).
- Invest. Lastly, if you have saved and paid down/paid off debts you can invest your $20000. Many people get nervous when they hear the word “invest” because they think it entails working with the stock market. That isn’t always the case though. You can invest your money in plenty of different ways.
How to Invest $20000
If you’re wondering what to do with $20000 investing is a great way to spend the cash. How do you go about investing $20000 though? It can be pretty overwhelming. Here’s a few ways to invest your $20000:
- Invest in the Stock Market – Stock market investing can be a bit intimidating for many people. However, you can get started investing for much less than $20000.
- Use an Investing App or Broker – There are many different apps, like Acorns, that help people start investing and continue investing over time. If you’re not comfortable using an app you can also contact a broker directly (I would suggest a broker if you’re looking to invest the entire $20000).
- Invest in Yourself – Maybe you need to take a few classes for work or you’ve been meaning to go back to school, take a fitness class or even buy yourself something new to further your career (like a computer).
- Make Some Renovations – If you own your home and are wondering what to do with $20000, make a list of things that need renewed and renovated around your home. $20000 can cover a lot of home renovations.
There’s no right thing to do with $20000 but there are some great things you can do to better your financial future with that cash.
Have you ever come into a large sum of money? What did you do with it?
Photo: Benzinga
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Amanda Blankenship is the Director of Social Media for District Media. In addition to her duties handling everything social media, she frequently writes for a handful of blogs and loves to share her own personal finance story with others. When she isn’t typing away at her desk, she enjoys spending time with her daughter, husband, and dog. During her free time, you’re likely to find her with her nose in a book, hiking, or playing RPG video games.
