What Should You Do With $1,000 In The Bank?

Pay Off Unsecured Debts

If you are feeling like you need a little extra cash on hand, the best thing to do is pay off your debt. This will ensure that even if your savings account goes down, you can continue living without going into debt.

If you have $1,000 in the bank and are worried about paying off your debts, consider putting this money towards a secured debt. A secured debt is one that has collateral behind it.

For example, if you owe $5,000 to a credit card company and have only $1,000 saved up in your account, the credit card company may give you $4,500 if you put down your house as collateral.

Create an Emergency Fund

In order to protect your financial security, having an emergency fund is important. An emergency fund will allow you to cover situations like unemployment, major car repairs, or other unforeseen scenarios that could come up in the future. If you set aside a small amount of money each month from all of your income, you will be able to save enough for any emergency.

You should have an emergency fund of $1,000 or more in the bank at all times. This money could help you get through unexpected expenses like car repairs or medical bills.

You should also set up a six-month budgeting plan so that you can actually see how much money you’re spending each month and cut unnecessary expenses like coffee, alcohol, and eating out.

Open an IRA

If you have $1,000 in the bank, you should open an IRA and begin investing the money. There are a few things that you can do with your IRA, one of them being to invest it.

You can invest in stocks or bonds to earn money. If you are not sure what types of investments would be right for you, get in touch with your financial advisor or take an online course on stocks, such as Investing For Dummies.

When you deposit money in your IRA, you will be able to invest later. IRA’s require a smaller investment than a 401(k), but some are available with much higher interest rates.

Open a Taxable Brokerage Account

Investing in a taxable brokerage account might not seem like the smartest thing to do with $1,000 but it is a smart move. If you choose to open this account, expect to pay 0.75% of your total assets each year for trading commission fees.

There are many ways to invest $1,000 in the bank. However, some options offer higher returns than others. One option is to open a taxable brokerage account and pay taxes on any profit made from the investment.

Start Building Passive Income

If you have $1,000 in the bank, what do you do with it? Most people say they’d deposit it into a savings account or invest in mutual funds. But what if those were not always the most profitable options and you wanted to get started building passive income?

Investing your money in stocks or mutual funds may seem like a good idea, but if you want to make some real money, you should start building passive income.

If you purchase a basic index fund and follow the guidelines of the Financial Experts on how to invest wisely, then you could potentially expect to earn $1,000 in interest over the course of 10 years.

Save for a Down Payment on a House

If you have $1000 saved, it can buy you a down payment on a house. In order to get that much money, you will have to save for two years or more. You should also make sure that the money earns interest.

If you put the money into a savings account, you will see an average return of 1%. According to Bankrate, the average home price in the U.S. is currently around $200,000 and if you put down 20% of your home purchase price as a down payment, then your down payment could be $40,000 or so.

If you have $1,000 in the bank, a lot of people might be tempted to spend it all. However, if you put it into a savings account and start saving for that down payment on a house, you’ll be able to live in your dream house sooner. Sounds like a plan?

Contribute More to Your Employer-Sponsored Retirement Account

If you have $1,000 in the bank and none of it is in your retirement account, then think about contributing that to your employer-sponsored retirement account. If you contribute just a small amount each month, over time you can earn a lot more than $1,000!

If you have $1,000 in the bank, it might be tempting to spend it. However, if you put it in a retirement account like an employer-sponsored 401(k) plan, you can actually contribute more money and save for your retirement.

You can also see how much you will be saving for retirement with a figure provided on your annual statement. Contribute as much as you can!

Start a Side Hustle

If you have $1,000 in savings, you should start a side hustle. That money can go towards investing or saving more money to put away for the future. There are plenty of different ways to make a side hustle work creating art, doing freelance work, selling things on eBay or Craigslist but the most important thing is to choose something that fits into your lifestyle and interests.

If you have $1,000 in the bank and a few hours to spare, starting a side hustle can be a good way to make extra money. The key is finding something that will keep you busy with minimal effort.

Some side hustles include selling your old stuff online or buying items on eBay and reselling them for profit. If you want to start a business, consulting or even freelancing are good options as well.