Lesson #3: What now?

There are better ways to use your money than on a sports car. Via Flickr user Toyota UK.

There are better ways to use your money than on a sports car. Via Flickr user Toyota UK.

You’re probably swimming in cash by now. Am I right?

I’ve already told you how to keep track of your expenses and identify in which area you spend the most money. And now your bank account is just overflowing with all this unspent bullion.

Where should you spend it? Clothes? A new TV? Margaritas?

Pause.

That type of thinking needs to be destroyed. If you have extra money, don’t automatically get rid of it on the trappings of consumerism. Commercials and media preach that newer is better, and it’s our duty to buy new in order to drive the economy. But are you really going to trust a commercial?

Unless unforeseen expenses crop up (car repair, medical bills, or the like), where that money will best serve you is away from you.

The healthy fiscal options don’t seem as sleek and sexy as the latest iPad, but they make more sense. Put your money in a 401K or Roth IRA retirement plan or invest in stock, if you’re into that. (I’m terrible at stock investment, and I’m convinced everyone who says they’re good uses magic.) Put the money in a fund for a rainy day or use it toward paying off loans early. Save up for a big purchase you know is down the road, like a car or a vacation.

Whatever you do, leftover money is not an excuse to splurge in the moment. If you spend it all, your efforts to scrimp and save were for naught.

Back away from Amazon.com. Don’t spend your money on impulse purchases. Figure out where your money will best serve you — a retirement plan, emergency fund, etc. — and don’t give in to the temptation to spend your cash on the biggest, newest thing.

No matter what those car commercials tell you.

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