Everyone wants to be rich. Big homes, fast cars, exotic trips - what’s not to like?
There’s no harm in dreaming big, but setting unrealistic goals for your new business can make it hard to stay motivated.
Instead of worrying about your first million, think about what you could do with an extra $100, $500 or $1,000/month. Even a (relatively) small amount of extra income can make a big impact on your quality of life.
Unconvinced? I’ll prove it to you.
How to Spend an Extra $100/month
It may not sound like much, but an extra $100/month can significantly improve your long-term financial health. Here are a few helpful suggestions for newly-successful business owners.
Put it in a college fund
College and university are expensive, so give your kids a leg-up by putting your new earnings in a high-interest savings account. Joel Larsen, a certified financial planner, points out that “[saving] $100 a month over 20 years at a 7% rate of return [...] would amass $52,092.67.” Not a bad head start!
Grow your retirement savings
Don’t need a college fund? Start putting your newfound income towards your future and ensure a comfy retirement. T. Rowe Price, a global investment management firm, calculated that “if a young adult retiring in 40 years makes an initial contribution of $1,000 to a Roth IRA and adds $100 a month until retirement, he could have more than $250,000—all tax-free under certain conditions.“
Re-invest in your business (with upgrades)
Start a rainy day fund
Cars need repairs, roofs need patching, and pipes need fixing. It’s bound to happen at some point, and it pays to be prepared. Experts suggest putting away 3-6 month’ salary for an unexpected emergency, so start saving.
Take more time for yourself
See a movie every weekend, have a monthly couple’s night out, or upgrade your cable package to finally get HBO.
How to Spend an Extra $500/month
Bringing in an extra $500/month has the potential to significantly raise your standard of living. Debts start to shrink, broken things get fixed or replaced, and your confidence as a business owner starts to grow. Here are a few good places to start.
Accelerate your mortgage payments
Putting an extra $6,000 towards your mortgage every year can really lower the amount of interest you pay in the long run. According to the RBC, “when you select an accelerated weekly or bi-weekly payment option, you are essentially making the equivalent of one additional monthly payment each year which will help pay off your mortgage faster.”
Pay off your debts
We’ve already mentioned accelerating your mortgage payments, but other things like credit card debt and student loans should really come first. Learn how to prioritize your debts and make the most of your payments.
Re-invest in your business (by investing in yourself)
Build a home office
Nothing says “startup” like running your business from a laptop in your kitchen. Investing in a home office will help you get more done and add legitimacy to your growing empire.
Upgrade/renovate your home
Update your old bathroom with a new sink one month and a fresh coat of paint the next. The home you’ve always wanted is now within reach.
How to Spend an Extra $1,000/month
An extra $1,000/month can be life-changing. These suggestions are geared towards successful business owners who have already paid off outstanding debts and consider this money disposable income.
Pick up a few best-selling books about investing and start putting your money to work. Don't want to go it alone? Speak to a financial advisor about how you can make the most of your extra income.
Travel the world
See exotic places, visit family, or just spend some much-needed down time on a far-away beach. Wherever you're headed, you can definitely afford the trip. Plus, it's important to take some time to relax and recharge.
Re-invest in your business (with ads)
Splurge (in moderation)
Every successful entrepreneur deserves to treat themselves every now and again. Whether it’s a pair of designer shoes or an 80” big-screen, $1000/month can buy you big-ticket items you never thought you'd have.
Buy a new car
Is your gas guzzler on its last legs? An extra $1,000/month is more than enough to cover payments for a new, fuel-friendly ride.
That’s what we’d do with the money, but what about you? Tell us how your life would change with an extra $100, $500 or $1,000/month in the comments section below.