Hey everyone, it’s Finance Fridays again. I think everyone knows that the federal tax laws went into effect, and supposedly a good majority of Americans should be paying less taxes for tax year 2018. So this begs the question: “What should I do with my extra money in February?”
Stock Photo from: Pixabay
What should I do with my “extra” money in February?
My advice?
Pretend it doesn’t exist.
Whatever the difference in your paycheck between January and February, take that amount and decide pre-emptively to put it somewhere else so it can work for you.
Here’s an example:
Let’s say the difference between your current paycheck and your new one is $100. Let’s also assume you get paid bi-weekly. So basically, I would set it up such that $200 a month “extra” now goes somewhere new. I am hoping that you’ve already looked at “The Checklist” and budgeted appropriately:
- Credit Card Debt
- Student Loan Debt
- 401k/403b
- 457 (if available)
- Backdoor Roth IRA
- …
- ..
- .
- Taxable Account
- Other Investments
If you haven’t then you should definitely budget that extra money to the above in that order of priority before considering anything else.
I’m set on “The Checklist” stuff… what else you got?
Well, you could set it aside for a family trip. I’m all about experiences and saving $200 a month gives you an extra $2400 to put toward a family vacation for the year.
Maybe you can finally start saving money in that 529 you’ve been wanting to start:
- What is a 529?
- Choosing a 529
- Let’s Talk About 529s
- My 529 Allocation
- Let’s Talk More About 529s
- 529s and the New Tax Law 2018
Perhaps you want to add more to your Taxable Account.
Maybe you want to add some Dividend Stocks to your portfolio.
Consider donating that extra money to the charity of your choice. Choose a good one though.
And lastly… (and with great caution)
Maybe you think you’re ready to start gambling in Crypto.
I won’t recommend this, but I guess it’s an option, since it’s “extra” money you can afford to lose. Please read these first though:
- Introduction to Cryptocurrency (Bitcoin)
- Let’s Gamble with Cryptocurrency
- No Bitcoin for Hawaii
- Cryptocurrency Volatility
- Where is Bitcoin Today?
- Is Bitcoin a Bubble?
- How To Buy Bitcoin in Hawaii
- The 4 Pillars of (Crypto) Investing
- Ripple… To The Moon!
- Bitcoin (and Crypto) for Hawaii?
- Crypto Crash and HODL
- Is the Crypto Crash Over Yet?
- My answers on Quora
I truly believe cryptocurrency will change the way the world works, so I think it’s a good idea to learn about it now.
However, you don’t have to invest (gamble) in order to learn. To be honest, most of the information can be found on the internet for free, using YouTube and good references. The only problem is that there is a lot “noise” right now. There are a lot people trying to make money from selling you stuff that should be free and there are a lot of scams out there. Please don’t buy someone’s “super secret Crypto course” for $799 or whatever. I wish I had compiled a list of all the references and videos that I read and watched to learn about cryptocurrency… unfortunately I didn’t.
However, I think a good starting point is probably this:
Bitcoin or How I Learned to Stop Worrying and Love Crypto
Even though it’s old… it’s free, and it was taught by Charles Hoskinson. He’s the current CEO of Input/Output Hong Kong (IOHK) which is developing Cardano. Additionally, he was also previously CEO of Ethereum as well as Co-Founder and CEO of Invictus Innovations, which created Bitshares. To be honest, I haven’t actually listened to the lectures myself since I didn’t find this course until after I had done a ton of reading/watching on my own — however, it has 4.5 stars on Udemy and I think Charles Hoskinson is both a very smart guy and an excellent speaker.
If you find that first course interesting, then there is a whole list of other stuff to watch which Charles lists here. I wish I had found this list before spending hours and hours of doing my own research on the internet just wandering around aimlessly.
After you’ve gotten your feet wet, you can learn more about the intricacies of blockchain, and how cryptocurrencies will evolve in future. It’s really fascinating stuff.
Wait… what are you going to do with your “extra” money?
Like I’ve said in prior posts, I really want to increase my 529 contributions for my children, even more so because of the new tax laws going into effect soon.
So, whatever “extra money” I may get will most likely be going to 529s. Anything else would just be added on to student loan payments.
My goal is to pay off the remainder of our student loans in the next 5 years.
TL;DR
What should I do with my “extra” money in February?
Pretend it doesn’t exist — make plans for it before you get it so you never get used to having it.
If you’ve already completed “The Checklist”, then you can move on to other options.
I still think Crypto is the future… but you don’t need to invest (gamble) to learn about it. I implore you educate yourself.
I’m probably going to be putting my “extra” money toward 529 contributions for my children, with whatever is left over toward student loans.
Transparency:
As I’ve stated before I own a tiny amount of Ripple (XRP), Cardano (ADA), Steem (STEEM), and Funfair (FUN).
-Sensei
Agree? Disagree? Questions, Comments and Suggestions are welcome.
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