What Should You Do with Expendable Income
UK households now have more disposable income compared to a few years ago, with the average worker now able to spend just over £1,000 on whatever they choose each month.
After paying taxes, bills and food expenses, the recreational and cultural habits that hoover up large swathes of that leftover money include meals out, package holidays, subscription services and general hobbies.
While these can bring happiness in the short term, there are perhaps better ways to make use of expendable income.
Pay off debts
If you haven’t already, paying off any outstanding debts should be a top priority, especially if you have a healthy portion of funds to allocate as you see fit on a weekly or monthly basis. High interest rates on a £2,000 credit card balance, for example, will build up quickly over time.
You don’t need to pay off everything at once but try to reduce your arrears steadily by making payments on a regular basis. When you have finally settled your debts, you will have even more money to put towards other worthwhile pursuits.
Save for the future
Saving money is always a good idea. This doesn’t mean putting cash in a cupboard or leaving it in your debit account. You want to make your money work for you. Many people live pay cheque to pay cheque, so if you are fortunate enough to have disposable income, consider putting more into a pension or opening an Individual Savings Account (ISA).
The right investments can really turn that expendable income into a nest egg that can support you in later life or increase your standard of living right now. Forex trading is an excellent option if you already work full time and want to trade currency pairs at a time of your choosing. You can set up an account for a relatively small sum and start trading straight away. Reading Avatrade reviews will help you to make a decision about the best broker for your circumstances.
Invest in your Education
Expendable income is very useful if you want to change your career and need to attain a degree or accreditation in a specific niche to get a new job. Investing in education could boost your earning capacity further and help you to achieve a better work-life balance. It’s never too late to learn new skills. There are a variety of courses available in the UK, both at colleges and institutions and online.
Plan for retirement
Retirement may seem far away depending on your age,but it is never too early to think about how you will get by in later life. The earlier you start diverting funds into a pension, the better. Personal and stakeholder pensions are available for those that want to top up their workplace pension or do not have one in place.
It is okay to enjoy the fruits of your labour by spending disposable income on temporary pleasures but try to mix in some more worthwhile investments and savings to build a better future for you and your family.