Have you seen your income increase in recent years? The extra boost to your bank account will help you build wealth, but a salary increase could also make things more confusing. After all, what are you supposed to do with all this extra income?
To make the most of your money and maintain your financial fitness, here are 15 essential money moves to help you grow wealth and enjoy your money once you make $250,000.
If you’re over 50, take advantage of massive discounts and financial resources
Over 50? Join AARP today — because if you’re not a member you could be missing out on huge perks. When you start your membership today, you can get discounts on things like travel, meal deliveries, eyeglasses, prescriptions that aren’t covered by insurance and more.
How to become a member today:
- Go here, select your free gift, and click “Join Today”
- Create your account (important!) by answering a few simple questions
- Start enjoying your discounts and perks!
Important: Start your membership by creating an account here and filling in all of the information (Do not skip this step!) Doing so will allow you to take up 25% off your AARP membership, making it just $12 per year with auto-renewal.
Max out your retirement accounts
Investing is a great way to secure your future financial situation and boost your bank account, and one way to do that is by contributing to your retirement accounts.
Max out your retirement accounts, including your 401(k), so you can get the most out of your company’s potential matching funds.
It’s also important to review how much you can contribute. Making $250,000, for example, will stop you from investing in a Roth IRA or other types of retirement accounts with maximum income limits.
Contribute regularly to a brokerage account
You can still invest in the stock market after you’ve maxed out your retirement contributions in a 401(k) or IRA.
Open a brokerage account to help you invest additional funds in the market. You can contribute money to an index fund or pick specific stocks you want to invest in based on how much you have to contribute and what you want to focus on.
Meet with a financial advisor
A financial advisor would be a good person to add to your team now that you’re making more than $250,000.
Find a planner familiar with specific aspects of your strategy, such as retirement or short-term investment plans.
It’s also important to find an advisor who has experience in different areas like investing, real estate, or other topics, depending on what you want to do with your money.
Resolve $10,000 or more of your debt
Credit card debt is suffocating. It constantly weighs on your mind and controls every choice you make. You can end up emotionally and even physically drained from it. And even though you make regular payments, it feels like you can never make any progress because of the interest.
National Debt Relief could help you resolve your credit card debt with an affordable plan that works for you. Just tell them your situation, then find out your debt relief options.1
How to get National Debt Relief to help you resolve your debt: Sign up for a free debt assessment here. (Do not skip this step!) By signing up for a free assessment, National Debt Relief can assist you in settling your debt, but only if you schedule the assessment.
Set up a meeting with a CPA about tax strategies
Making more money could also mean spending more money to cover your tax bills. It’s a good idea to check in with a CPA who understands the different changes your higher income may pose.
There may be tax benefits and burdens you might not have considered before when making less money.
Buy your dream house (within reason)
Now that you can afford it, it might be time to sell your starter home and move up in the housing market.
Consider a house that fulfills your current needs, but remember to factor in the monthly mortgage costs, utilities, property taxes, and other housing costs.
The extra income can help you move up, but you don’t want to go overboard and not be able to cover the additional expenses.
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Invest in other real estate
Now that you have extra money coming in, consider investing in other real estate options. Consider adding a rental property to your portfolio, either with long-term tenants or as a short-term property, such as an Airbnb.
You can also invest in real estate investment trusts (REITs) and buy and flip houses for a profit, especially if you can save extra cash by doing some of the work on the house yourself.
Buy a nicer car
You may have always dreamed of driving a specific car once you could afford it, so feel free to upgrade your vehicle if you have the extra cash on hand now.
Remember to factor in all of the monthly costs of car ownership. You may not be able to afford the fanciest model, but perhaps you can upgrade to something nicer than your current ride.
You should also factor in other costs, such as maintenance, repair, and gas, which may cost more if you use premium options for an upgraded car.
Increase your insurance coverage
Build up your insurance coverage if anything catastrophic happens so you’re well covered.
You can add to your life insurance policy or increase your health care coverage. You’ll also need to remember to boost your homeowner’s policy or car coverage if you move to a new house or buy a new car.
Take a nice vacation
Build up your insurance coverage if anything catastrophic happens so you’re well covered.
You can add to your life insurance policy or increase your health care coverage. You’ll also need to remember to boost your homeowner’s policy or car coverage if you move to a new house or buy a new car.
Earn cash back on everyday purchases with this rare account
Want to earn cash back on your everyday purchases without using a credit card? With the Discover®️ Cashback Debit Checking account (member FDIC), you can earn 1% cash back on up to $3,000 in debit card purchases each month!2
With no credit check to apply and no monthly fees to worry about, you can earn nearly passive income on purchases you’re making anyway — up to an extra $360 a year!
This rare checking account has other great perks too, like access to your paycheck up to 2 days early with Early Pay, no minimum deposit or monthly balance requirements, over 60K fee-free ATMs, and the ability to add cash to your account at Walmart stores nationwide.
Don’t leave money on the table — it only takes minutes to apply and it won’t impact your credit score.
Set up college funds for your kids
Consider saving some cash for your kids to help them with a major expense like college. Setting up college funds could help you save cash to pay for their education while keeping them out of student debt.
But make sure to also pay yourself. After all, your kids have plenty of years to pay off their loans if they have to take on debt compared to your need for retirement funds.
Build up your emergency fund
An emergency fund is an important tool for covering unexpected expenses such as home repairs, car accidents, or healthcare emergencies.
Experts suggest you have enough cash in your emergency fund to cover at least three to six months of expenses. But you may want to make sure you have closer to six months to pad out your emergency fund now that you’re making more money.
Save money with a high-yield savings account
Check with your bank or financial institution to find out what high-yield savings account options might be available.
A high-yield savings account is great because it makes money for you without you having to do anything except let it sit and generate interest.
The more money you can add to it, the more you’ll earn in interest, so consider putting extra cash in it to help you earn more.
Renovate your home
Instead of buying a new place, it may be time to give a small refresh or do a major update to your house.
Think about moving forward with that big addition you’ve wanted to add to give yourself more space, or hire painters and an interior designer to freshen up the look of your current home.
Pay off debt
Debt can be difficult to pay off, especially if you have debt with a high interest rate or have been working for years to try and pay it down.
Use some of your extra cash to crush your debt for good. You don’t want that debt following you around, particularly as you get closer to retirement.
Consider retiring early
Retirement could be closer to your grasp than you think now that you’re making more money. Instead of retiring in your 60s, you might be able to retire in your 50s or even sooner.
Sit down with your current budget to see how much you can save for retirement and where you can keep it.
It’s important to compare your current budget to your estimated retirement budget and decide if you have the savings and investments to retire early or at least earlier than you originally expected.
Bottom line
It can be daunting to start making more money and not know what to do with it.
A financial advisor may be a good place to start to get an idea of where you should put your money to protect your wealth.
Stick to a budget to help you plan how much you can spend and save. Don’t think that making more money means you can abandon a basic budget to help you stay on target for your goals.
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