“What should I do with an extra $2,000?” + other fun $$$ questions…

by J. Money -

gold money

Goooood Friday, everyone!!!

Have a good week with your money over there??? Pay off any nasty debts or lingering responsibilities? Score any extra cash that you’re just waiting to put to good use??

If it’s the latter you’re in luck today as I answer a bunch of good Q&A’s from readers, including one around applying extra funds :) Hope this helps!

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Sup J$!

What should I do with an extra $2000?

It was originally earmarked for something but due to a change in circumstances, I’ll have it available. My Roth is funded for the year, I’m contributing to a HSA, my 401k, I have an emergency fund.

Some considerations – stick it in Vanguard? Help out a friend or friends who are down on their luck? Help out stranger(s) – donate? Save it – indefinitely (aka retirement)? Towards a new vehicle (mine is 7 years old, will like need to update by the 12 year mark)? Towards the next trip/vacation? Use it to pay a friend’s way on a trip? (We are talking northern lights 2020 – tbd Canada or Iceland or ?)

What other suggestions might your or your readers have? If they were to pick a few from above, how would they split the money? If they were to share the money with friends, how would they do it? Slip cash to them? A gift card to a place you know they’d use it (Walmart Target Grocery Store)?

Thanks!

Excellent questions and a good problem to have, my friend!!

But like I always do, I’m going to fake answer it and pose the question back to you by simply asking: “what excites you the most??!” Saving and investing? Helping others? Blowing it all on cotton candy?? (Kidding, sort of…)

The more FUN it is for you to direct it towards something, the better odds it’ll fulfill you enough and keep you motivated. So long as it’s going towards *a* goal of yours vs frittering it away. Especially if it’s “free money” you weren’t counting on before!

But yes – happy to share it on the blog and get you more direct answers on it in case it pushes you one way or the other ;) If I were forced to make a call I’d just sit on it for a while and stare at it every few days to really enjoy the spoils before unleashing it to the world, haha… And then probably divert 75% towards investments and 25% towards helping the world/friends…

Would be a fun situation to be in!

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Hey J. Money… I figured out my net worth and I’m not worth a damn! LOL! Just kidding. Once my car note and student loans are gone it will look prettier.

How often do you look at your net worth? Also how often are you looking at your retirement portfolio? I look at mine 3 times a year to make adjustments. I work for the federal government at the moment. But starting to put money in Vanguard account so at the end of the year I can do a mutual fund. In the ne tworth…

If you have a rental property that is making you money where do you put that at? The extra income for the year per se? Thanks!

– Jessica

Hey Jessica! Good job tracking your net worth!! I like to do it monthly because I don’t budget anymore and it helps keep me accountable, but I know others who do it quarterly or even just twice a year, so really depends on what will motivate you the most :)

Since I track our investments in the net worth that’s when I look at those as well. As for rental property, you’d put your mortgages if any, along with the value of your property in net worth, but cash flow stuff stays outside of it – just like your salary or any other incomes streams would. But of course that stuff is SUPER important as well, so it would be tracked elsewhere like in a budget or retirement spreadsheet or something.

I’ve seen some people have one master spreadsheet that held their budget, net worth, and retirement calculations all rolled into one so you get a glimpse of everything – so maybe that can be an option for you? The cash flow stuff would still be factored into your net worth btw if it ends up getting saved/invested/etc, it just depends on what you DO with all those income streams that affect your overall worth. If you blow it all on beanie babies then you wouldn’t see an increase at all ;) So that’s why it’s good to track that stuff separately and then see it naturally flow into your net worth if used wisely…

My thoughts, anyways.

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And then here are some good questions I was asked in an older interview from last year whose blog is unfortunately not around anymore :( The average lifespan of a finance blog is only 1-2 years!

Each month you give an update of your net worth. Why did you start doing that? Any forecast of what it’ll look like in 5 years?

Yup – on Month #123 in a row now! One of the best things I’ve ever done for my money as it gives me an overall view of how everything’s going, and you can usually tell what areas you’re rocking and what you aren’t which keeps you super accountable. Seeing someone else’s net worth for the first time was just a game changer for me (shout out to My Money Blog – one of the first blogs I ever read!), so the second I started my own blog I knew I’d be sharing the same and I haven’t stopped since. And in fact, we now have over 500 other bloggers in the space being just as transparent as well! Pretty incredible!

As for 5 years from now, I honestly couldn’t tell you, haha… I’m great at living and thinking in the *present* but horrible about forecasting the future. Just because so much changes in life and dreams, especially when you keep popping out kids like we are (#3 is due any week!). I can tell you though that we’ll be continuing to save and invest as much as we always have, and God willing our net worth will continue to climb just the same… If that happens, we’ll be over the million dollar mark and maybe even pushing $1.5M? Who knows… As long as I wake up happy each day that’s what matters the most :)

UPDATE: We’ve since had baby #3 (now 15 months old!) and we’re on month #138 in a row now of tracking our net worth, presently at $940,412.06.

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What were some lessons you were taught growing up that you appreciate now?

There were two main ones constantly brought up in our family, one from my mother and one from my father (although growing up of course we didn’t always follow them ;)):

#1) You don’t need to buy everything *new*! My mom was/is the queen of frugality, and I swear half of our stuff – if not more – came from yard sales and thrift stores. She was raising a family of 5 on a shoestring military budget, so she def. had to stretch those dollars far.

#2) Whatever you do, make sure you’re getting your FREE 401(k) matches from your employer! This one was brought up multiple times by my father once we were all old enough to work, and despite it being engrained in our heads early on we still failed hard :)

Once it finally clicked though and I saw the money continue to RISE and never go down, it was mind boggling as usually at that age you just deplete stuff, haha… $100 turned into $1,000 and then $5,000 and then $10,000, and I’ve been contributing to my retirement accounts ever since! Maxing them out every single year, even – the one and only main goal I ever give myself.

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What are some lessons you hope to pass onto your kids?

That you can live a life on your OWN terms and not have to do what everyone else around you is doing (or buying)! We’re so caught up in this “American Dream” of the 9-5 work life and buying a home and having 2.5 kids etc etc that it’s hard to sometimes step back and really ask yourself what makes YOU happy in the end. Especially if you’re going to spend so much of your life *working* towards these goals!

So the #1 thing I want to teach my kids is to be more *conscious* about their actions and dreams, and let them know that they can set up a lifestyle that they truly enjoy themselves vs just chasing what everyone else is. I also want to teach them that no matter what is going on in their lives to always be kind and loving people and never apologize for it even if it’s not appreciated. This world needs as much love as it can get, and no matter how down we might feel some days others have it much worse!

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What’s an app, a book, and a podcast/blog (either one, or both if you’d like) that you’d recommend to someone who wants to improve their financial literacy?

I really like the book “Essentialism” by Greg McKeown right now. Not necessarily a financial book per se, but one that really gets you to stop and focus on WHAT YOU TRULY WANT in life and to start moving away from all the nonsense that detracts from it. Whether that’s a healthier personal life, career life, financial life, love life?, anything really… We do so many unnecessary things in our days, and often times we don’t even realize it because they’ve become habit! So this book – at least for me – was instrumental in opening up my eyes and clearing the path for a more efficient and happy lifestyle.

I also like the items on this list here I’ve added to over the years as well: Stuff I Recommend

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Happy Weekend!!

j. money signature

Past Q&A’s over the months:

{ 21 comments… read them below or add one }

1 One Frugal Girl August 23, 2019 at 7:54 am

I love your #1 lesson for your kids. I feel the exact same way. Being kind and conscious of others emotions and their own actions is so important. If they learn nothing else in life I will be a successful parent if they learn that!

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2 J. Money August 23, 2019 at 9:25 am

Haha, yup… The world needs more lovers out there :)

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3 Christine August 23, 2019 at 10:10 am

Awesome advice!

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4 J. Money August 23, 2019 at 4:42 pm

Thanks!!

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5 BasicBitch August 23, 2019 at 10:32 am

Oh man, am I the only person who has every dollar ear-marked as well as future dollars? I have a couple of long-term savings things (new fence for the doggos, new shed for the backyard, etc…). If I had an extra 2k it would go to one of those longer term projects and I’d knock that out and move all my other Smarty Pigs forward. LOL

There is no potential dollar I have not already allocated.

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6 Kate August 23, 2019 at 12:28 pm

Fellow YNABer? All my coins are allocated too. Already allocating for summer vacation 2020!

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7 J. Money August 23, 2019 at 4:44 pm

An even better way to go!! I admire y’all planners, haha… I can barely forecast the next day, no less the next month/year/decade, whether relating to life or finances :)

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8 Nita August 23, 2019 at 6:52 pm

No, you’re not ;)
Since I put aside all bills and then allocate money by percentage of the rest (emergency, investments, all sinking funds, groceries and going out), every pot would just grow that much faster and I may even splurge on something or go out with friends one more night this month. Btw, the year is up with the electric company, and instead of taking my money this month, they’re refunding overpaid bills instead – two months worth. It’s not $2,000 but score :)

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9 J. Money August 27, 2019 at 6:18 am

nice!!

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10 Kim August 23, 2019 at 9:48 pm

Nope! We allocate every dollar to go somewhere too. The only thing up for grabs is “found money”. So anything above my expected raise (hubby is retired), gifts, anything we weren’t counting on goes to the travel fund. It’s our biggest splurge and even though we travel closer to 3 star than 5 star we take some amazing trips. All about making memories with the kids rather than buying junk. So yeah that whole 2k would go in the travel fund for next summer.

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11 J. Money August 27, 2019 at 6:19 am

Such a good use of found money :) It’s like going on vacations for FREE!!

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12 Kate August 23, 2019 at 12:27 pm

Earlier this year I allocated £2000 in a “rainy day fund” in YNAB and the rainy day has come (first experience with cowboy builders!).

If I had kids I would teach them to enjoy everything at all price points. From a dollar ice cream sitting in the local park to a visit to the First Class lounge (if you are travelling for work and manage to swing an upgrade!). Expensive isn’t always better, that’s for sure, but every now and then it’s a lotta fun!

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13 J. Money August 23, 2019 at 4:45 pm

Very true on that!! Happiness = happiness whether it costs $1.00 or $1,000 :) Great thing to appreciate…

(and what the heck are cowboy builders?!)

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14 Kate August 27, 2019 at 6:44 am

Ha! I didn’t realise that this was a local term!

“cowboy builder”
British English informal
a house builder with no proper training or official qualifications who does work of a low standard
E.G.: “Do-it-yourself decorators and cowboy builders are ruining Britain’s historic towns.”
https://www.ldoceonline.com/dictionary/cowboy-builder

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15 J. Money August 27, 2019 at 7:02 am

Haha…. brilliant…

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16 Amy August 23, 2019 at 2:00 pm

An extra $2000 in the situation you described…I agree to sit on it for a hot minute and then would put 50% in some type of investment/savings and 50% towards travel of some sort.

Love the lessons you learned from your mom. Mine was also super frugal out of necessity, and as an adult I initially pushed against it, wanting everything new as I rarely had that growing up. But once I maxed out my (very small limit) credit card a couple of times between 18-22 years old, I came to my senses and now in my early 30’s have an appreciation for my mothers frugality.

Celebrating paying off my car! Final payment was made this week, woohoo! Now for the not-so-exciting part…continuing to ‘pay myself’ the payment to save towards an upgrade in a couple of years.

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17 J. Money August 23, 2019 at 4:46 pm

Congrats!!! Always a good milestone! And you’re definitely not alone in the “figuring it out on your own” department regardless of what our parents/friends tell us sometimes ;) Most of us are pretty slow and take a while to finally catch on, haha…

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18 Working Mom August 23, 2019 at 4:12 pm

We had a similar situation recently when we received an unexpected $3000 inheritance (no weird unknown uncle, just my parents decided to pass along part of what they got after my grandma’s passing). No strings attached, use it however you want. I had considered throwing it into my kids’ education funds but we ended up doing something even more boring…starting a “roof replacement” fund. Did try to maximize by adding it to high-yield savings account where it will stay ear-marked. But starting the fund and then trying to add regular contributions means we’re less likely to do a “heck with it, just get a home equity loan” when the time comes to re-roof. This keeps us better on track with one of our LT goals of having our forever home paid off when our youngest leaves for college.

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19 J. Money August 23, 2019 at 4:47 pm

A very prudent thing to do indeed, haha… I don’t know if I could have done that, at least with the whole thing, but very impressed you pulled it off!! Future you is going to be really happy! :)

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20 B.C. Kowalski August 23, 2019 at 5:07 pm

I love these lessons to your kids. For me, nothing else besides living life on my own terms would do. I once read something Ernest Hemingway had written about this and realized that’s how I am. I took kind of weird path in life but it’s my path and I lived my life the only way I could imagine. I think that’s why FIRE resonated with me – it’s a way to REALLY live life how I want. Perfect!

As far as the $2,000, I think it would go straight to investments. I just installed my new toilet with another FI friend today, and just ordered my new fridge, so I think my home improvement projects are done for a while. So I think I would put those little employees to work making me more money!

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21 J. Money August 27, 2019 at 6:20 am

Haha…. those little employees are great because they never stop or sleep or get sick!! ;)

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