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Now That You Make Good Money, What Are Your Options?


As they grow older and advance in their careers, many professionals start to find that they have more money in their pockets. If you’re in your 30s or 40s, this might sound like you. 

Those long nights and sacrifices you’ve made to move up the corporate ladder have finally paid off. For the first time in your life, you now have endless financial opportunities and the means to take advantage of them. 

You could purchase a new home, take a vacation, or buy a new car. On the other hand, you may be debating whether to pay off debt or put more money into your retirement fund.

So what should you do? 

Avoiding debt may not be optimal in a long-term financial plan, but finding the right strategy for handling your money depends on many factors. 

In this article, I will look at some processes and recommendations for approaching your financial well-being now that you making good money. 

Evaluate your financial goals and risk tolerance

Before you embark on making any big financial decisions, it’s important to understand how your financial goals and risk tolerance interact to inform financial decision-making. Typically, financial advisors look to understand what your goals are and what your risk level is. 

Goals are how much money you want to make from your investments or how much you want to have saved for retirement. On the other hand, risk refers to your tolerance for investments going sour. For example, younger people can tolerate greater risk levels because they have more working years to make up for bad investments.

Although this is a relatively simplified version of investment theory, it gives you a starting point to think about how you should manage your finances. While young, you can build a solid financial foundation and then reap the benefits of planning ahead later in life. 

In the next sections, we’ll look at some options for what to do with the extra cash you’re bringing in.

Emergency Fund

Most Americans have an emergency fund, but over half haven’t saved enough money. An emergency fund is a key first step in setting up your financial security. Opening a checking account is one way to kickstart your rainy day fund. According to recent surveys, 78% of respondents would open a new bank account for a $100 bonus. An extra hundred bucks can go a long way to starting your savings fund! Any way you cut it, an emergency fund is necessary for everyone to have. No matter your position in life, you should prioritize saving some money in case you encounter unexpected expenses.

Buying a car

If you find you’re making plenty of money, buying a car can be one way to spend that extra cash. 

Contrary to popular belief, cars don’t have to be just a liability. If you purchase a vehicle for your business, for example, you can usually write off the cost. Buying a new car can sometimes be necessary too – depending on where you live, you may need it to get to work. 

But having a car means having expenses. You may find yourself saddled with a new car loan; you need to pay for insurance, gas, yearly service, repairs, etc. Make sure to consider the total cost of owning a car before buying one.

Life Insurance

Another option to consider is purchasing a life insurance plan. Life insurance is a great way to guarantee you continue to have an income in case you become unable to work. In many cases, financial advisors consider a life insurance policy the cornerstone of financial security. 

Think about it this way; if financial planning is all about understanding your risk, the biggest risk is losing your income. A solid life insurance plan will help mitigate that risk. After all, we can’t prevent ourselves from getting old or sick, but we can take proactive measures to prevent the worst from happening. 

Buying a home

Purchasing a home can be a controversial investment decision. Many Millenials, for example, regret buying their first home. Houses are not always an excellent source of equity. Some financial experts even consider them a liability, especially if you find you’re unable to make mortgage payments. On the other hand, unlike renting, all of your mortgage payments go towards building equity. It’s worth considering selling the home you already own to buy a bigger one and build your assets.


One of the best things you can do with your extra cash is to find a way to invest it. Use a retirement calculator to figure out how much money you need to save to retire. Interest-paying bonds or investments that pay out dividends can be a great way to generate additional cash and increase your portfolio. Or you could consider riskier investments and put your money into crypto. After you’ve seen some gains, you can sell your crypto and increase your capital. Just be sure to pick investments that suit your level of risk and how much return you desire.

Have a little fun

If you’re still out of ideas of how to put your money to work, why not use it to have some fun? Maybe a date night is in order, and you can spend it on a nice dinner. Think of it as a way to reward yourself for all the smart financial planning you’ve done. 

You can also take a vacation. More and more Americans feel stressed these days, so if you have the money, why not give yourself a much-needed break. 

Finally, think about supporting a cause you care about. Remember, donations to nonprofits are usually tax-deductible, so you can save money on your taxes AND do some social good.

Putting it all together

These are just a few ways to maximize where your money goes once you’re financially stable. When thinking about any of these paths, remember to carefully consider your long-term goals and how much risk you’re willing to take. If you keep these two simple principles in mind, you’ll be sure to find your way to financial success and happiness.

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Financial Research Analyst
Kiara Taylor is a financial writer and Research Analyst. She is an expert at risk-based modeling having worked in the finance vertical for the past twenty years. She has a Master’s Degree in Finance from Ohio State and has worked at Fifth Third Bank, J.P. Morgan and Citi in emerging markets and equity research.

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