1000. We made it to 1,000! To celebrate this massive milestone, Laura Adams is sticking with the "1,000" theme to help you make the most of your next windfall. Whether it’s a tax refund or a work bonus, discover seven high-impact ways to manage an extra $1,000—from building a bulletproof emergency fund to the power of a Roth IRA. Plus, stay tuned for special guest appearances and tips from long-time listeners and financial experts who have been part of the “Money Girl” journey!
1000. We made it to 1,000! To celebrate this massive milestone, Laura Adams is sticking with the "1,000" theme to help you make the most of your next windfall. Whether it’s a tax refund or a work bonus, discover seven high-impact ways to manage an extra $1,000—from building a bulletproof emergency fund to the power of a Roth IRA. Plus, stay tuned for special guest appearances and tips from long-time listeners and financial experts who have been part of the “Money Girl” journey!
Find a transcript here.
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Welcome back to Money Girl–this is a special show, episode 1,000! It’s a huge milestone that would not be possible without you. So, I can’t thank you enough for sharing this journey with me, whether you’ve listened to one or 1,000 episodes!
I'm Laura Adams, an award-winning author, spokesperson, content creator, and founder of The Money Stack, my Substack newsletter. You can learn more at LauraDAdams.com.
Today, I’m sticking with a “1,000” theme and sharing seven smart ways to manage an extra $1,000. And along the way, I’ll feature a few comments and tips from listeners who have been part of the Money Girl journey!
I think whenever you get extra money, whether it's a tax refund, a bonus at work, or have been diligently saving, having an extra $1,000 can be a powerful moment to make this surplus go even further. I’ll review the best ways to make this cash work hard for you, depending on your financial situation. And even if you don’t have that much extra money, these tips will still help you prioritize your finances.
1. Build your emergency savings.
When you have extra money, my first recommendation is to review your savings. And I know you've heard me say this before if you've been listening to Money Girl. If you don't already have a healthy cash reserve, building it should be your top priority.
So if your emergency fund doesn’t exist yet or it's just too small, moving $1,000 (or any amount of extra money) into an FDIC-insured high-yield savings account (HYSA) is the smartest way to use it.
And last week’s podcast, episode 999, called “What Is the Best High-Yield Savings Account,” covers what you need to know about choosing and using these terrific high-interest accounts.
A cash cushion helps you manage financial hardship, avoid debt, and reduce stress. Even a small fund is better than nothing, and itcan be your most valuable safety net when something unexpected happens. And you know that happens to all of us.
I know saving extra money instead of spending it on something fun might seem like a downer. But it’s an important move for navigating unexpected changes in your financial life, like having a large expense or even a loss of income.
While you won't earn a huge amount of interest, even with a high-yield account, that's not the goal for this bucket of money. Your cash reserve should never be invested or exposed to market risk because it could lose significant value. Having funds available when you need them that's the purpose of an emergency fund.
Ideally, you should have a cash reserve equal to at least three months' worth of your living expenses. However, depending on your work and family situation, you might need more or less.
One tip to make saving easier is to automate a direct deposit to your emergency savings account. It could be a percentage of your paycheck or a flat amount each week or month. You can ask your employer to set it up or create your own recurring transfer from checking to savings. That way, you slowly and consistently build a cash cushion without having to think about it.
2. Purchase needed insurance.
Like building an emergency fund, purchasing insurance with an extra $1,000 is another admittedly dull but smart way to protect yourself against potential disasters! For instance, if you’re a renter and you don't have renters insurance, you need a policy. Coverage for renters is surprisingly affordable, averaging less than $180 a year nationwide.
A renters policy doesn't cover your dwelling, but it does cover your personal belongings and liability, up to certain limits. When you rent, your landlord is not responsible for your possessions—they're only responsible for the dwelling. So, you having renters insurance is critical.
If you need extra liability protection, let's say beyond the limits of your existing policies, like your auto, home, or renters insurance, consider purchasing an umbrella liability insurance policy. It covers you up to a higher liability limit after other policy limits are exhausted.
Life insurance is critical when your death would create a financial hardship for dependents you leave behind, like a spouse, children, or aging parents. They can be set up as beneficiaries and receive a payout upon your death.
If you're single or no one depends on your income, you either need a minimal funeral expense policy or none at all. And if you have a stay-at-home spouse who cares for your children, you also need a policy on their life to cover future childcare costs.
Life insurance is most affordable when you're young and in good health, so you don't wait to get coverage if you need it. If you don't have access to life insurance through an employer (or if you do, but it's just not enough), you can get life quotes at a site like Policygenius.
These are just a few types of insurance that are often overlooked yet provide a financial safety net for you and your loved ones if something unexpected happens.
And speaking of being financially prepared, here’s a message from my friend and fellow author, podcaster, and financial literacy advocate.
[AUDIO CLIP 1] “Hi, Laura. This is Tony Steuer, host of the Get Ready Before Life Happens Podcast. And my tip is for people to be curious and to ask questions. This helps in a lot of different ways. Asking questions allows you to get the right answers. And that's where financial literacy comes into play, as it helps people understand the right questions to ask. And the curiosity comes from wanting to change the way we think about money and about life. And when we're curious, we do have that drive to ask questions. When we think about asking questions, we can think about it in all the ways asking questions helps us in different areas of our life like when we're trying to learn a new game or a new skill. Anyway, I hope this is helpful. And congratulations again on reaching episode number 1000!” [END CLIP]
Thanks so much, Tony! Tony is a great guy who created The Get Ready Movement to empower financial pros, educators, and individuals to change how they think about money and to take action. You can check him out at TonySteuer.com.
LISTEN ALSO: 7 ways to cut healthcare costs
3. Pay down high-interest debt.
Another smart way to use your extra money is to pay off high-interest debt. That could be credit cards or maybe loans. For instance, if your card charges 20% APR, paying it off is equivalent to a guaranteed 20% return on an investment!
In general, I recommend tackling your highest-interest debts first to drastically cut your interest expenses. If you have high-interest loans or credit card debt, they challenge your ability to achieve financial success. So, don't accept expensive credit card debt as a way of life, or let it rob you of the ability to save and invest.
Not only will reducing expensive debt help you save money, but having lower debt balances also improves your credit scores. That's important because higher scores are the ticket to lower-interest loans and credit cards and cheaper insurance premiums, helping you save money.
RELATED: 7 tips for excellent credit scores and more savings
4. Contribute to a retirement account.
The next-best use of an extra $1,000 is to invest it in a tax-advantaged retirement account, maybe it's an individual retirement account (IRA) or a workplace retirement plan, like a 401(k) or 403(b).
Let’s say you’re 30 and put $1,000 into an after-tax Roth IRA and never contribute another penny. If you invest it in an index fund with an average return of 7%, by the time you’re 65, so 35 years later, the account will be worth nearly $12,000–and that's all tax-free.
But if you contribute $1,000 a year to a Roth IRA for 35 years at an average 7% return, you’ll have over $150,000 of tax-free funds to spend in retirement. And if you contribute the current IRA maximum of $7,500 a year for 35 years at a 7% average annual growth rate, you’ll have over $1.13 million in your nest egg!
Since few people have guaranteed pensions or the desire or ability to work into old age, investing for retirement is essential. In addition, the earlier you begin investing for retirement, the less you actually need to invest, thanks to compounding. You're never too young to begin planning for your future, and even regular, small investments are better than nothing.
Regularly contributing at least 10% of your gross income to a retirement account is an excellent goal. But there’s no rule that you can’t invest a lump sum for retirement when you have a cash windfall.
[AUDIO CLIP 2] “Hi, Laura. I really enjoy your Money Girl Podcast–my name is Maram. And something that I was thinking about in terms of previous money tips was when you mentioned in episode 779, “9 Surprising Tips to Build Wealth,” you were talking about investing in index funds. And something that really stood out to me was that long-term passively managed index funds can actually deliver better returns than active funds, and that they require less effort and time to grow wealth over the long-term. That’s something that surprised me and stood out to me.
I think in terms of money advice overall, the fact that you considered the nuance of time and effort and how much it’s worth it in the end for growing wealth is something that I really appreciate about your show. So, thank you and congratulations on 1000 episodes!” [END CLIP]
Maram is the QDT network’s terrific podcast associate, and I really appreciate everything she does behind the scenes to ensure all our shows are created and published. I really appreciate your thoughtful message Maram and am so glad that tip about simple investing was helpful for you!
5. Boost a child’s education fund.
If your emergency savings and retirement investments are on track, you might consider using an extra $1,000 for a child’s education. For instance, you could open a 529 savings plan, which allows tax-free withdrawals for qualified education expenses.
There’s a wide range of education costs you can pay for with a 529, including tuition, room and board, books, supplies, and technology. It also covers various academic paths, like trade schools and professional certifications. In addition, you can use up to $10,000 once in your life to help repay federal or private student loans.
And starting in 2026, 529 plans allow you to withdraw up to $20,000 per student per year for elementary and secondary school expenses. You can even use 529 funds for tutoring, testing fees, homeschooling supplies, and educational therapies.
[AUDIO CLIP 3] “The Money Girl is rich with content that is! 1,000 episodes is quite an achievement, Laura. Congratulations. This is John Lanza of The Art of Allowance Podcast, with a massive tip of the cap to the Money Girl and this amazing achievement.” [END CLIP]
Thanks so much, my friend! Check out John’s show, The Art of Allowance Podcast, where I was recently a guest. We had a great conversation about which accounts families should use to save and invest for a child’s future. John is dedicated to youth financial literacy, helping parents raise money-smart kids. He's written some books. One is The Art of Allowance: A Short, Practical Guide to Raising Money-Smart, Money-Empowered Kids and a terrific children's book series called The Money Mammals. Check him out.
6. Get advice from a financial professional.
If you have an extra $1,000, one of the smartest ways to spend it might be hiring a financial pro, like a Certified Financial Planner (CFP). To earn this designation, you must meet rigorous education, examination, experience, and ethical standards as set by the Certified Financial Planner Board.
CFPs are trained to help you manage finances through a comprehensive approach that integrates all areas of your finances to achieve your life goals. They create a detailed financial plan with actionable recommendations and points to review your progress.
CFPs are paid in different ways, including commission-only, fee-only, salary, or a combination of these methods. They can create a one-time financial plan or work with you on an ongoing basis.
Be sure you understand an advisor’s level of experience, their legal obligation to protect your financial interests, and how they are paid. A great place to start your search for a CFP is LetsMakeAPlan.org, which is run by the CFP Board, a nonprofit organization that sets and enforces certification standards.
[AUDIO CLIP 4] “Hi, Laura Adams! Calling to wish you congratulations on your 1,000 podcast milestone. Wow! Thank you so much for positively impacting the world with your actionable education. This is Marie Burns, a colleague in the financial education world at Mindmoneymotion.com, offering women podcasts, blogs, and digital money tools for less worry and more life.” [END CLIP]
Thanks so much, Marie! Marie is a CFP and has been advocating for her clients’ financial health for over 20 years. At her site, you can learn more about her financial services, checklists, and her Mind, Money, Motion Podcast.
READ ALSO: Am I saving enough for retirement?
7. Spend a portion on something fun.
Since this episode celebrates a milestone, it’s important for me to say that money is for living, too! You might allocate 90% of $1,000, or $900, to one of my previous six responsible options, and take the remaining 10%, or $100, for something you enjoy.
Rewarding yourself is also part of preventing burnout and making your wealth-building goals sustainable.
[AUDIO CLIP 5] “Hey, Laura, it's Chris Hill, the long-time host of Motley Fool Money. There's only one way someone can host 1,000 episodes of a podcast. They love what they're doing, they have to be great at it, and they have to consistently make it worth the listener's time. And you have done that from the very start. And now you're on the very short list of people who have hosted 1,000 episodes.
I'm so happy you're gonna be joining me later this month on my new show, Money Unplugged, because every time we talk, I end up being smarter about money, and I've got a smile on my face. Congratulations, Laura!” [END CLIP]
Thanks for your kind words, Chris! Chris is a veteran podcaster and financial pro, and I’m excited to be an upcoming guest on his show, Money Unplugged, where he focuses on the emotional side of personal finances.
Again, thank you for letting me be a part of your financial journey. Here’s to the next 1,000 shows!
That's all for now. I'll talk to you soon. Until then, here's to living a richer life!
Money Girl is a Quick and Dirty Tips podcast, and we've got a great team! Steve Riekeberg audio-engineers the show. Holly Hutchings is our director of podcasts, Morgan Christianson is our advertising operations specialist, Rebekah Sebastian is our marketing and publicity manager, Nathaniel Hoopes is our marketing contractor, and Maram Elnagheeb is our podcast associate.