If You Make $1K a Month in Passive Income, These Are 5 Smart Ways To Put It To Work
It’s always ideal to have multiple income streams, and if possible, at least one of those income streams should be passive. Once you have a passive income stream up and running, it’s time to decide what to do with those extra funds.
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If you’re bringing in $1,000 a month in passive income, here are some ideas for how to best utilize it.
Build an Emergency Savings Fund
Experts recommend keeping three to six months’ worth of living expenses in an emergency fund. This will keep you afloat if you need to pay for a major expense such as a medical emergency or urgent home repair, or in the case of job loss. If you don’t have an emergency fund established, it’s a good idea to put your $1,000 a month into this fund until you have a sufficient amount saved.
Pay Off Debt
Once you have an emergency fund established, focus on paying down debts. It’s best to start with high-interest-rate debt, like credit card debt. An extra $1,000 a month can make a big difference in paying off any existing debts you have.
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Invest It Back Into Your Home
Whether you want to buy a new piece of furniture or put your money toward a renovation project, using the money to fund something within your home is always a good idea.
“Adding to your home can pay off in the long run,” said Scott Lieberman, founder of Touchdown Money. “You’ll live more comfortably, and you’ll increase the home’s value.”
Upgrade Your Appliances
If you have older appliances, chances are they are not energy efficient.
“If your appliances aren’t producing the way they should, making an upgrade now can prevent a major bill later,” Lieberman said.
Take a Vacation
If you’re in good financial shape, invest the money in your happiness by taking a vacation.
“Everyone needs time to recharge,” Lieberman said. “Getting away for a few days and having the money to do it makes for a truly relaxing time by yourself or with family.”
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This article originally appeared on GOBankingRates.com: If You Make $1K a Month in Passive Income, These Are 5 Smart Ways To Put It To Work
