So you just won $500! Your first thought might be a shopping spree or a weekend get-away. But hold on, there are ways to stretch that $500 which can really pay off in the long run.
Save it for retirement: If you can wait a couple of decades to spend that $500, then it may be worth much more! If you put $500 into a Roth IRA account at age 30, then by the time you retire at age 65, it could reach $5,338 (based on an expected rate of return of 7%), according to Bankrate.com’s Roth IRA calculator.
Invest in your child’s education: Consider a 529 prepaid tuition plan. Basically it locks in tuition prices (for eligible school) at whatever the current rate is. If you bought shares worth half a year’s tuition, those shares will always be worth half a year’s tuition, no matter how much the price goes up.
Pay it forward: Find an organization that will match your donation. Not only will you feel good about your money doing some good, but you can potentially double its value. The first step would be to check with your HR department and see if your company offers a matching program. Many do.
Get acquainted with the stock market: Some people think they can’t dive into the stock market with only $500, but that’s not true. It can be difficult to diversify with $500, but it’s still possible. Avoid individual stocks and go with an exchanged traded fund (ETF). This will spread your $500 across multiple stocks, and as an added bonus, fees are typically low. With stock you can make money but remember there is always the risk of losing money too.
Before you shop: Now that we’ve told you how to stretch $500 and get the most out of your money, maybe we should tell you how you can have a chance to win $500! Enter our SuperheroMom Giveaway this final week to win a $500 Visa gift card.