8 Ways to Put Left Over Money in A Budget to Good Use

Last updated on September 21st, 2024 at 10:28 am

When you come up with ways to put left over money in a budget to good use, it’s a sound financial decision towards money. Preparing a budget complicates some people’s lives but it’s one of the most important things in controlling income and expenditure.

And through proper budgeting, it’s possible to come up with leftover money which can be used to cover other needs in life. Discretionary income or left-over money in a budget can be put to good with best money practices.

Financially sound practices should be stressed to improve our finances. Some people can’t tell anything about leftover money though they’re income earners.

And that’s because they lack a defined track record of their expenses and incomes. Yes, they spend but don’t understand spending best practices hence struggling financially.

In case you’re finding challenges defining income and expenditure patterns, budgeting is the way to go. This will enable you to come up with informed financial practices toward your money.

And by doing things correctly in most cases you’re going to have some leftover money. That’s a positive balance in the checking account which can be saved or invested.

What Is Left Over Money?

This is the amount of money that remains after you’ve paid off taxes and other necessities in life. And usually, this money can be further spent or saved for future investment goals.

Leftover money is most times known as discretionary income. Money that is spent on luxuries and non-essential goods and services should be leftover money.

What about disposable income? This is a take-home pay that you use to cover essential and non-essential expenses. Leftover money is derived from disposable income after expenses such as transport, food, and insurance.

Leftover money and disposable income shouldn’t be confused because they’re different income types.

Bests Ways To Put Left Over Money in A Budget to Good Use

When you make sound decisions with money it’s possible to have some left-over money on the side. In budgeting, it’s known as surplus having catered for all the other expenses on the list.

Sometimes it’s hard to specifically determine how best to put that money to good use. Though it’s surplus budget money, there’re different ways in which it can be effectively utilized.

1. Pay Off Debt

In case you have debt always think about getting yourself out of debt in the best way possible. Some of the strategies you can use are debt snowball where you clear the smallest debts first.

And another one is debt avalanche where you clear high-interest debts first. Paying off debt it’s a sound financial practice that leads to financial freedom when you do things correctly.

Leftover money can help you to reduce on debt payment period hence clearing debt in a short period. Whichever kind of debt you could be paying, leftover budget money can help in paying it off fast.

Paying off debt accordingly is a healthy financial practice for your budget. Everyone in debt wants to pay it off to become debt free but it requires commitment.

2. Put Left Over Money in An Emergency Fund

Sometimes we’re burdened by costs that come up unexpectedly and in case you don’t have an emergency fund you’re most likely to end up in debt. Saving for emergencies using leftover money will help you grow the emergency fund and have the potential to cover expected costs.

Emergency savings should be among the top list items to consider in case you have some leftover budget money. Most people are living in debt just because they don’t have a fund that caters to costs that come up unexpectedly.

There’re different types of costs that you may incur as emergencies say uninsured medicals, water heater repairs, and uninsured car costs. Even though you don’t know when they will happen, there should be clever ways to save money to cater to emergencies.

And where possible you can put up an emergency fund in stages about low, medium, and high costs. Yes, when you’re a low-income earner you should start small and after some time grow it to a medium fund and further to a high-level fund.

3. Invest Left Over Budget Money

Another better way to save leftover budget money, right? Investing is also one of the bests ways to put leftover money in a budget to good use. It doesn’t matter whether you have to clear debts or not but investing is a sound financial practice.

The fact that you have debt doesn’t stop you from putting money aside to buy shares of stocks to add to your portfolio. And if you think leftover money is too little to invest now then put it in a high-interest savings account to grow.

Let’s look back in history with Amazon when its share was priced as low as $100 but after some years it’ went up to $3000 per share. This means that the share of Amazon stock appreciated 30 times its previous value over the years.

Leftover money can work for you when you invest in shares of fundamentally good companies. There’s also another option in case you don’t have time to analyze company fundamentals, you can invest in index funds.

An Index fund is a basket of companies say the S&P 500 index, Nasdaq QQQ, and others. And one of the good things about investing with index funds is the low expense ratios on the side of the investor.

So, another alternative to investing leftover money is the 529 plan college fund. Here you don’t incur any taxes on savings for the child’s future education.

4. Reward Your Efforts with LeftOver Money

This is what most people rarely do yet it’s among the motivating factors in life. Sometimes you need to have a life outside normal work days to refresh your mind and soul.

Of course, having some fun requires money and which can be raised through saving leftover money. Usually, in my budget, I have to cater for fun to have a life and refreshing minds has helped me to keep going every other day.

You don’t need to have a lot of money to save for fun it’s about commitment. There’re different ways in which to have a fun time say shopping, partying, going out on a date, and other ways.

All these can best be done when you’ve surplus saved aside to spend. It’s rewarding yourself in a financially sound manner on a budget.

5. Start A Side Hustle

Even this blog is a side hustle business and it requires less capital to start. If you can have some surplus money in your budget, you should spend it on productive things.

And a side hustle that will generate an income is a better option. There’re lots of side hustle activities nowadays say blogging, freelancing, YouTube, and more yet costing less to start.

I started my blog with less than $100 which was surely left-over money gotten in a single month. If you want to learn any business skill online you can use the leftover money to pay for courses.

Though it starts as a side hustle, in most cases some people end up quitting their day job to full-time a side hustle.

6. Offer Financial Support

Some people think that to help others in need of financial help you must be earning a lot. But that’s not true, left-over money can sometimes be given to people that are in need.

Having cleared most of your expenses it’s not bad at all to share the little you have with the community. And you’re considered to be of financial importance to the community at large.

Therefore, I would say putting up a fund for leftover money is a good idea too.

7. Add To Your Sinking Fund

Saving leftover money to a fund that caters to expenses that you expect to occur is putting money to good use. There’re different sinking fund categories to which you can allocate money say medical, home and household costs, pets care, kids, family, and others.

When you find that you have money left, other than spending it on unproductive items it’s better you put it into a sinking fund. Leftover money enables you to have funds readily available to cover expenses you expect to incur.

And it also saves you from debts and pressure to look for money in case the incident happens. There’s no need to wait for an expense you expect to happen then look for money yet left-over money can be saved.

Since money is always taken out of the sinking fund, leftover budget money can be used to save more in the fund.

8. Save In a High-Interest Savings Account

Interest rates right now are very small in most banks in the United States and they vary depending on the banks. However, you can invest money in the federal deposit insurance corporation bank account for better rates.

Sure, even though the interest rate isn’t much but it’s worth it other than just wasting leftover money on things that won’t yield. Money left can be deposited for some time to compound so long as you’re sure you won’t need it anytime soon.

Ensure to go through the certificate of deposit process with the bank to authorize it to use the funds for some time to earn more interest.

What Are Some of The Expenses Covered Before Spending Left Over Money?

You must first clear basic items before spending any money left in the checking account. For money to be considered leftover budget money, you must have paid the bills, rent, insurance, and other essential needs.

You have to spend on basic needs first then you can use the leftover money to work on discretionary expenses as you would wish.

Insurance

Though there’re different types of insurance expenses, those that are most essential should be covered first. Insurance is also an expense in the budget and has to be prioritized among items.

Paying insurance on time ensures that in case of any emergency, you’re covered. Before spending any leftover money make sure your insurance costs are covered first.

Living Expenses

Any item that you can’t do without in a budget it’s a living expense. Some of these expenses include food, water, electricity, medical, and others.

However, living expenses vary in different places among people take the example of people living in Boston and New York. A budget can accommodate several expenses but not every item is a living cost to be prioritized.

Credit Card Debt

Before you think about leftover money you need to first clear credit card debts. A credit card debt can either be paid off in full amount or slightly higher than the minimum amount due.

You need to clear credit card debts fast since they negatively impact your finances. With debts to pay it will be hard to save and invest because the checking account is always wiped out by debts.

How To Calculate Left Over Money?

Having made all the tax payments from your income, the money left is disposable income. And when all the basic expenses are deducted from disposable income then the balance is left over money.

Leftover money can be put into savings, spent, or maybe invested, and of which all depends on your preferences. Therefore, according to the 50% – 20% – 30% rule, 50% of net income is meant to cover basic needs, 20% is meant for savings, and 30% is spent on wants.

Leftover money is by right considered to take a 30% share of your net income in theory.

FAQs

How Much Can I Save a Year with LeftOver Money?

Because we all have different incomes, how much to save depends on the basic expenses you need to cover and the level of commitment.

A high-income earner’s left-over money is most likely to be way more than that of a low-income earner. And that means a high-income earner is most likely to save more but the discipline to save is most important.

Is It Possible to Start a Side Hustle Business with Left Over Money?

Yes, I started my blog with less than $100 and there’re very many others of the same kind where you won’t spend more than that. However, always invest in yourself to get knowledge about any online business you intend to start up.

Can I Use Left Over Budget Money on Minor Expenses?

This money can be further spent on any expense after all most basic expenses are covered in the first place. Leftover budget money can be saved or may be invested whichever you prefer to undertake.

 Closing

Whether budgeting is your style or not but coming up with surplus money is not that simple. And having gotten the surplus then another task would be how to put it to good use.

Of course, using leftover money productively in the best way possible. It’s therefore not as hard as we think, leftover money can be used to make more money

Or it can be used to make your life better to make more money.

• Pay off debt
• Put leftover money in an emergency fund
• Invest leftover budget money
• Reward your efforts with leftover money
• Start a side hustle
• Offer financial support
• Add to your sinking fund
• Save in a high-interest savings account