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Here’s what to do if you have an extra $100?

If you’ve just received $100 and you’re wondering what to do with it, there are several options to consider that can help you maximize its value. Whether you want to invest it, save it, or spend it, here’s a quick rundown of various ways to use your money wisely.

Investment options:

Investing your $100 can be an excellent way to grow your money over time. Here are a few investment options you might consider:

1. Stock market: If you’re willing to take some risks, investing in the stock market can be a great way to grow your money. With just $100, you can buy shares in a company that you believe will perform well in the future. Before investing in the stock market, consider setting a financial goal and time horizon, researching potential companies, and understanding your risk tolerance. 

2. Mutual funds: Mutual funds are an investment option that allows you to pool your money with other investors to purchase a diversified portfolio of stocks, bonds, or other securities. With just $100, you can buy into a mutual fund that aligns with your investment goals.

3. Exchange-traded funds (ETFs): ETFs are similar to mutual funds in that they offer a diversified portfolio of investments, but they are traded on stock exchanges like individual stocks. ETFs can be an excellent way to get started in investing with just a small amount of money. Understandably, investing can be intimidating – and might feel that you don’t have a lot to invest long-term.

For beginners, I recommend starting with Acorns (a micro-investing platform). After investing your initial $100 you can make one-time or recurring investments into your account at anytime starting at $5. You can also opt into the round up program and invest your spare change. Simply link a credit or debit card, and each time you use your linked card Acorns will round up the purchase to the nearest dollar and invest the difference. As a bonus, use my referral link and Acorns will give you $10 to start.

Savings options:

If you’re not quite ready to invest your money, you might consider putting it into a savings account. Here are a few savings options to consider:

1. High-yield savings account: A high-yield savings account offers a higher interest rate than a traditional savings account, which can help your money grow faster over time. One recommendation is CIT Bank’s Savings Connect. There’s no monthly fee and as April 2023 the account earns 4.50% APY (much better than 0.01% offered by regular savings accounts).

2. Certificate of deposit (CD): A CD is a type of savings account that requires you to leave your money untouched for a set period of time. In exchange, you’ll receive a higher interest rate than you would with a traditional savings account.

3. Money market account: A money market account is a type of savings account that typically offers a higher interest rate than a traditional savings account. However, there may be minimum balance requirements and fees associated with this type of account.

Spending options:

If you’re looking to spend your $100, there are still ways to use it wisely. Here are a few spending options to consider:

1. Pay off debt: If you have high-interest debt, such as credit card debt, using your $100 to pay it off can be an excellent way to save money in the long run.

2. Treat yourself: While it’s important to be responsible with your money, it’s also okay to treat yourself occasionally. Whether you want to buy a new book or go out to dinner with friends, using your $100 to do something you enjoy can be a great way to improve your quality of life.

3. Invest in your education: If you’re interested in learning a new skill or taking a course, using your $100 to invest in your education can pay off in the long run.