What To Do With Extra Money: 10 Smart Ways to Fund Your Future
January 14, 2025
What to do with Extra Cash
Having extra money feels great, but figuring out what to do with it can be tricky. Instead of letting it sit there, you can use it in ways that help you now and in the future. Whether you want to save for an emergency, plan for big goals, or give back, there are smart ways to use your extra cash.
In fact, 81.6% of U.S. households — about 109.1 million — use traditional bank accounts instead of relying on risky services like payday loans or check-cashing.[1] This shows that most people are choosing safer ways to handle their money. In this guide, we’ll show you practical ideas to make the most of your money, so you can make smart choices that help you build financial security.
1. Build an Emergency Fund
An emergency fund is one of the smartest things to do with extra money. Life can throw unexpected expenses your way — like car repairs, medical bills, or sudden job loss. A financial cushion gives you peace of mind and keeps you from relying on credit cards or loans.
Experts recommend setting aside enough to cover three to six months of living expenses. Start small by saving one month’s worth and gradually add more. Opening a high-interest savings account can help your money grow while keeping it easily accessible for emergencies.
To start your emergency fund, explore our interest-earning savings accounts.
2. Start a CD Ladder
If you find yourself asking, ‘how should I spend my extra money?’ know that certificates of deposit (CDs) are a safe way to grow your savings over time. A CD ladder is a smart strategy that splits your money into several CDs with different maturity dates. This method can give you regular access to portions of your CD savings while earning higher interest rates.
For instance, you could open a 6-month, 12-month, and 18-month CD. When the 6-month CD matures, you can reinvest it into another CD or use the funds as needed. This can assure flexibility while you maximize your earnings.
CDs are great for money you don’t need right away but still want to keep safe.
To build your customized CD ladder, learn about your options for CDs and IRAs.
3. Donate To a Charity
Donating to charity can make a meaningful impact within your community or causes you care about when you choose places to put extra cash. Whether you support local organizations, national nonprofits, or community projects, your contributions can help others while providing a sense of fulfillment.
Before donating, research charities to ensure your money goes where it’s needed most. Many organizations offer transparency about how they allocate funds. Plus, in some situations, charitable donations may qualify for tax benefits.
Before you donate to an organization in your community, find out how to make sure a charity is legitimate.
4. Open a Money Market Account
Money market accounts (MMAs) are a great place to put extra cash, especially if you want a higher interest rate than a traditional savings account. These accounts also offer limited check-writing and debit card access, which can give you more flexibility.
MMAs often feature tiered interest rates, which means the more you deposit, the higher your earnings. This can make them ideal to park a lump sum of money you might need access to in the near future.
To get more from your ongoing deposits, check out our MMAs.
5. Save for a Big Purchase
If you’re planning a major purchase, like a car, a home renovation, or a dream vacation, saving in advance is a smart move. By setting aside money now, you can avoid taking on debt or dipping into your emergency fund.
As you decide what to do with extra cash, consider creating a separate savings account dedicated to your goal. This keeps the funds organized and helps you stay focused. Use a financial calculator to determine how much you’ll need and how long it will take to reach your target.
To learn more about savings, explore 15 tips to cut costs at home.
6. Prepay Bills or Loans
Paying ahead on recurring bills or loans can help ease your monthly budget and save money on interest. It’s one of the smart things to do with money. Focus on high-interest debts like credit cards or personal loans first. Paying down even a little extra each month can significantly reduce the overall cost and shorten the life of the loan.
If you’re debt-free, consider pre-paying regular bills like utilities, insurance, or subscriptions. This gives you a buffer in your budget and reduces financial stress.
For more pointers, learn the best way to pay off credit card debt ASAP.
7. Support Family or Friends
If you’re in a strong financial position and want to know where to put a lump sum of money, helping loved ones can be a meaningful way to use extra money.
Here are some things you could do to help loved ones:
Contribute to a child’s education fund.
Help a family member with medical bills.
Lend someone you know money to start a business.
Before you offer financial support, make sure you're not putting your own financial security at risk. Set clear boundaries about how much you can afford to give or loan.
If you own a family business, see our succession planning guide.
8. Plan a Memorable Experience
Not every dollar in your wallet needs to go toward something practical. Using some of your extra money to create lasting memories can be incredibly rewarding.
Consider planning a family trip, signing up for a class to learn a new skill, or treating yourself to a once-in-a-lifetime experience. Allocate a specific amount for these plans so you can enjoy the reward without feeling guilty.
9. Start a Special Savings Fund
Sometimes, it’s fun to save for something specific, even if you’re not sure what it is yet. Open a “fun fund” or “future goals” account and contribute to it whenever you have extra cash.
This could be for holiday gifts, spontaneous weekend getaways, or an unexpected opportunity. Having this fund means you’ll always be prepared for the fun things in life.
10. Give Yourself a Financial Check-Up
Sometimes, the best use of extra money is stepping back to evaluate your financial health. Use this time to assess your goals and determine where your money can make the biggest impact.
For instance, do you have enough insurance coverage? Are you on track to save for future expenses? Are your monthly bills manageable? Answering these questions can help you decide how to use your funds wisely.
Not sure where you’re at financially, learn what a financial checkup is and find out if you need one.
Build a Brighter Financial Future With Centier
Having extra money is a unique opportunity to strengthen your financial future and improve your quality of life. So, what is the best thing to do with extra money right now? Whether you’re building an emergency fund, opening a CD ladder, or giving back to others, every action you take can bring you closer to your financial goals.
If you’re ready to maximize your earning potential and build a brighter financial future, schedule an appointment with a financial expert at Centier.
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