You work hard every month and yet it can feel like you never really have much money to spend freely. Rent, household bills, car insurance, weekly food shopping and many more costs add up to consume much of your monthly salary. With the cost of living increasing, disposable income is further shrinking for many individuals and households. If you’re fortunate enough to have any sort of spare income, you may wonder what to do with it sometimes. Below we explore some of your options.

Treat Yourself

When payday rolls around you should feel free to treat yourself with your disposable income. Rewarding yourself after a long month can be a good way to keep yourself motivated and feel a sense of achievement. Perhaps you fancy updating your wardrobe, going out for a nice meal or booking a weekend away? The great thing about disposable income is that you don’t have to worry about not being able to afford any of your usual expenses – so as long as you can afford something, you can spend your money freely and without guilt.

Save

Saving is an important thing to do at every stage of life. For young adults, it’s an important step to help achieve financial stability and start on the journey towards buying a house, a car or any other significant purchase. For adults, and parents especially, saving should be at the forefront of your mind to save for emergencies and those big life events and responsibilities. You can put money away in an easy-access savings account if you may need to withdraw quickly. Or you can opt for fixed-rate bonds if you’re comfortable putting your money away for a set period with a guaranteed return. If you can get in the habit of saving some of your disposable income, you’ll be more likely to achieve life’s big milestones down the line.

Invest

Perhaps you want to put your extra money to work? Investing is a popular way to use disposable income because it can generate more cash in the long term, but it’s not risk-free. There’s a variety of options available now for people wanting to do more with their money, whether it be the best compound interest investments, hands-on stock or forex trading,  or hands-off investment in a fund or business venture. All kinds of investing can be done online these days, but you should do some research to determine which is best suited to you. You may even have a business venture that you want to invest in or start yourself – the possibilities are endless.

Pay Off Debt

Disposable income can be valuable in allowing you to pay off existing debts that you may have. If you have debts that are racking up interest, it’s always better to pay these off as soon as possible to avoid you paying more back than you need to. Every bit of debt you pay off in a certain month is less debt that you’ll have to pay off in the future, so it will benefit you massively with regard to disposable income down the line.