Your Disposable Income: How to Use It in the Right Way
Disposable income is what you have left after you’ve covered all of your necessary expenses. You get to choose to spend it in whatever way you want or, alternatively, save it for any purpose. When you have disposable income for the first time, or you’ve recently increased your disposable income, you need to decide what to do with it. While you might increase your usual spending slightly, for example, to buy nicer food or heat your home more, it’s important to try not to immediately spend all of your extra money. You should think about what you’re going to do with it and how to make the most of it.
Set Your Savings Goals
If you have some disposable income, one of the first things that you might want to do with it is save it. You don’t have to save all of your disposable income, because it is still important to treat yourself, but putting some money away helps to provide you with security. Setting some savings goals will help you to start putting money aside for specific purposes, instead of saving without really knowing why. You might have short-term savings goals – for vacations, for example – as well as long-term savings goals for things like retirement.
Give to Charity
When you have money to spare, you might want to think about how you can use it to help others. Many people choose to give a portion of their income to good causes, whether they give regularly or just when a cause catches their eye. If you want to dedicate a portion of your money to charity, look for nonprofits that speak to you. You might donate to a families charity or an organization that helps animals. Choose one or more charities to automatically donate to each month. You could also change who you donate to each month, depending on where you think your money can make the most difference and how much you can afford.
Improve Your Life
As well as helping to improve the lives of others, there’s nothing wrong with improving your own life. You might look for ways to upgrade your home, for example. You could do some decorating or get some new furniture to improve your surroundings. Or you might spend some money on yourself, investing in anything from some new clothes to your education. There could be lots of ways you start improving your life, whether it’s paying off debt quicker or treating yourself.
Explore New Interests
Hobbies can often cost money. As much as you might want to try some fun new activities, not being able to afford to can hold you back. However, when you have some disposable income, you could spend your money on exploring new hobbies and interests. You might spend some money buying equipment or supplies for a hobby, whether it’s a sport, a craft, or something else. Or you might use your money to pay to get around or to pay for membership fees for a club or society.
Having a disposable income is great, but take some time to think about what to do with it. Consider how to put it to good use, whether it’s helping yourself or helping others.