Are you one of those people who is in a fortunate position to have disposable income but already own most of what you want? Perhaps you don’t tend to want for much and are looking for ways to spend your disposable income in a responsible and useful way? It’s a privileged position to be in and there are plenty of useful things you can do with your disposable income.
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Perhaps one of the most useful ways you can spend your disposable income is to put it into savings. There are a wide range of savings accounts to choose from, including those where you can draw money out freely, and those where once the money has been paid in, you can’t then draw it out for a set period of time. Your circumstances will dictate which type of account is best for you, but whichever one you go for, check the minimum and maximum monthly deposits and the interest rates.
2. Pension Fund
Most employers will have a pension fund that you can automatically opt in to, but you can pay into a private pension fund, too. It’s never too late to start saving for your future. In fact, having a good amount of money in your pension fund could mean you’re able to retire early. Shop around the find the best pension fund deal and make sure you read the small print about drawing the cash out etc.
3. Life Insurance
On a similar note to the pension fund, paying a good amount towards life insurance from an early point will serve you well in years to come. The goal is to have enough to cover your funeral expenses, but you might also want to overpay so that loved ones can be looked after when you’re gone. If you don’t have a family, consider donating to a trust or outlining a specific charitable cause in your will that you’d like to benefit from your savings.
4. Overpay Bills
Lots of people who have disposable income still have bills and debts to pay, and in this event, it’s worth spending the extra money on paying off those debts early. In the case of a mortgage, you should keep in mind that some banks and mortgage lenders will charge an extra fee for paying off the mortgage early, so do consider this if you plan on overpaying your mortgage.
One of the most effective ways you can spend disposable money is to donate it to charity. It doesn’t matter which charity you choose; someone somewhere can benefit from your contribution. If you already have charitable giving planned such as making a zakat donation, you could consider making a higher donation than you usually would, or you could choose to help a separate cause.
6. Home Improvements
A really smart way to spend your disposable income is to use it to make home improvements. Whether it’s a small change like a lick of paint or a new garage door, or if it’s something bigger like a large extension or a new roof, there’s probably something you can do around the house to improve the look or add value. Bear in mind that not every improvement adds value, but if you’re not thinking about selling your house, the value of your property might not be a deciding factor.
7. Support a Start-Up
If you really want to help out other people with your disposable income, you could use it to support a start-up business. Many new businesses have Kickstarter pages that they set up to try and get the funding for, and making a donation to a cause such as this could make all the difference to a new entrepreneur and them being able to get their project off the ground. There are so many projects to choose from, so there’s bound to be something that aligns itself with you.
8. Start Your Own Business
Alternatively, if you’ve always fancied yourself as an entrepreneur, you could use your disposable income to set up your own company. This is a smart long-term investment and if you have the money to get it started, why not? Make sure you do the proper research before taking the plunge, though. The last thing you want is to lose your money and time on something that doesn’t work out.
Getting an education isn’t cheap, and many people would jump at the chance to be able to go back to school and get a proper education. If you can afford to and have a desire to, you could spend your disposable income on paying tuition fees. For those who don’t want to go back to school themselves, why not sponsor someone else to go? It could make a real difference to someone’s life and will be useful for the wider society.
You might not be big into materialistic items, and if none of the other items on this list appeal to you, consider spending your disposable income on experiences! Think holidays, days out and once-in-a-lifetime trips. Your circumstances could change in an instant, so taking advantage of the opportunities presented to you at the time is never bad idea.
So, if you have disposable income, will you be spending it on any of these 10 ideas?