The Best Ways to Deploy Your Extra Cash

Whether you’re experiencing a windfall of money or you simply have some extra cash these days, here are some smart things you can do with it.

So, you have some extra cash and you’re not quite sure how best to use it? Now, that’s a fortunate dilemma to have. I find many high-earning individuals run into this situation at some point, especially when they are checking off all the boxes for living a financially successful life.

Having excess money is an amazing moment in anyone’s financial journey, but it is an especially amazing moment when someone stops to consider how best to deploy their extra cash. Having that level of money awareness can only help you to continue making smart personal finance decisions that support your success.

Whether you’re experiencing a windfall, like a crazy month of commissions or an inheritance, or you earned a promotion and now have more income these days, here are some intelligent (and fun) things you can do with your extra cash flow.

The Responsible Ways to Handle Extra Cash

Let’s first make sure you have all your financial bases covered. Extra cash can easily go toward funding existing financial goals and priorities.

  • Pay-Off Any Outstanding Debt. Paying off debt is a perfect way to use extra cash, especially if you have any high-interest debt such as from a credit card or loan. Nothing screams financial success like being debt-free. Pay down or off your car, knock a few months or years off your mortgage, and get rid of that student loan. Whatever the case may be, free yourself from any existing financial obligations as soon as you can.
  • Top-Off Your Emergency Fund. Having three to six months’ worth of your living expenses is recommended in case, for any reason, your income stops coming in. If you have some cash set aside, but it’s not quite enough to cover you and your family’s needs in the event of lost wages, consider treating yourself to some peace of mind knowing you’re covered by deploying extra cash to finish funding this financial goal.
  • Max Out Your Retirement Contributions. The earlier you contribute to your retirement accounts the better. The more time your money has to grow, the more compounding interest you earn, helping you to reach financial goals faster or even surpass them. You can contribute up to $18,500 into your 401(k) in 2018. Here is a complete list of retirement account contribution limits for 2018 for your reference.
  • Save for Future Purchases through a High-Yield Savings Account. Have a household project you want to tackle or a vacation you want to book? You can use your extra cash to open a high-yield savings account to save for these types of future, but relatively soon, purchases. Interest rates are ticking up and you could earn upwards of 1.85 percent APY in some instances. Remember, you can have anything you want if you’re willing to wait long enough and save for it. Patience really does pay.

Other Ways to Handle Extra Cash

If you have your basics covered and are funding all the important buckets of your financial life like savings, retirement, and taxes, then there is no harm in splurging a little. I find that when there are brackets on how much your lifestyle can cost, and you know those brackets, you can get really creative with what lights you up and makes you feel great.

Spending money on things, experiences, and causes that bring you the most joy is a great way to deploy your extra cash. You don’t have to be in excess of thousands of dollars either to align your spending with what makes you happiest.

For example, you may not be able to afford a full weekend at a hotel spa with bottomless champagne, but maybe you can afford a spa day or local masseuse at a discount and then some bubbly with friends. Maybe you don’t have enough extra cash to fund a new wing at the children’s hospital, but you can still make a sizable donation to benefit children there.

Think about what excites you, gets you energized and puts a smile on your face. It could be a latte or it could be buying something for someone else. Only you know the answer. So, take your extra cash and make yourself happy with it!


The big takeaway about ways to deploy extra money is if the cash or windfall is big enough, you can really get serious about having it change the course of your savings. I have a young client who inherited $100,000 from a relative a few years ago. To her credit, she did not spend it, rather she saved it and invested it. By my calculations, she is actually done saving for retirement. This is because she was so young when she earned the money. Now, all she has to pay for is her life and short-term wants like a house and a car, but her retirement is fully funded. Now, that’s fun!

If extra cash is handled in a way that aligns with funding goals, priorities, and values, I think that is when people can reap the highest intrinsic reward with their wealth.