4 Times It’s Actually Smart to Spend Money or Take Out a Loan Right Now

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Achieving an A+ financial strategy and building a comfortable net worth seems pretty straightforward — make some sacrifices, cut your costs and save as much as you can.

But we spoke to Certified Financial Planner Robin Hartill. (She’s also an editor and financial advice columnist here at The Penny Hoarder.) She explains that while cutting costs is often a good way to meet your short-term goals, it can only go so far.

For the big, long-term goals like retiring comfortably, living debt-free and protecting your family’s future, there are times when it’s smart to spend money.

So while yes, saving money and cutting unnecessary costs are absolutely important parts of your financial strategy, here are a few times when it’s smart to pull out your wallet.

1. When You Want Your Money to Grow

Investing is a smart way to grow your money. “Spending money by investing it in the stock market and earning returns can compound into even more money,” Hartill says.

While the stock market does go up and down over days, weeks and months, over time, the returns tend to rise.

If you haven’t started investing and have some money to spare, you can start small then build your way up. In fact, you can get started with as little as $1 with an app called Stash.*

We like Stash because it lets you choose from hundreds of stocks and funds to build your own investment portfolio. But it makes it simple by breaking them down into categories based on your personal goals. Want to invest conservatively right now? Totally get it! Want to dip in with moderate or aggressive risk? Do what you feel.

Plus, with Stash, you’re able to invest in fractions of shares, which means you can invest in funds you wouldn’t normally be able to afford.

If you sign up now (it takes two minutes), Stash will give you $5 after you add $5 to your investment account. Subscription plans start at $1 a month.**

2. When You Want to Save Money

This might sound counterintuitive at first, but you can often save money by spending it.

Here’s an example: Your car insurance? You’re probably paying too much. That’s why it’s time to cancel your existing policy and spend money on a new one — it could save you hundreds of dollars a year.

Use a website called EverQuote to see all your options at once.

EverQuote is the largest online marketplace for insurance in the US, so you’ll get the top options from more than 175 different carriers handed right to you.

Take a couple of minutes to answer some questions about yourself and your driving record. With this information, EverQuote will be able to give you the top recommendations for car insurance. In just a few minutes, you could save up to $610 a year.

3. When You Want to Leave Your Family $1.5 Million

Have you thought about how your family would manage without your income after you’re gone? How they’ll pay the bills? Send the kids through school? Now’s a good time to start planning for the future by looking into a term life insurance policy.

This is one of those occasions when spending a little bit of money each month can pay off later.

You’re probably thinking: I don’t have the time or money for life insurance. But your application can take minutes — and you could leave your family up to $1.5 million with a company called Bestow.

Rates start at around $20 a month.* The peace of mind knowing your family is taken care of is priceless.

“Your life insurance needs are greatest when you have young children,” Hartill says. “Fortunately, this is often a time when you’re still young enough that life insurance is relatively inexpensive.”

If you’re under the age of 54 and want to get a fast life insurance quote without a medical exam or even getting up from the couch, get a free quote from Bestow.

4. When You Want to Get Out of Debt

To stay out of debt, you need to spend less than you earn, but if you’re already battling credit card balances, Hartill says a debt-consolidation loan can help you shed that debt faster.

You might be wondering how getting a loan when you already have out-of-control credit card balances makes sense. The answer lies in lower interest rates — and a website called AmOne wants to help.

If you owe your credit card companies $50,000 or less, AmOne will match you with a low-interest loan you can use to pay off every single one of your balances.

The benefit? You’ll be left with one bill to pay each month. And because personal loans have lower interest rates (AmOne rates start at 2.49% APR), you’ll get out of debt that much faster. Plus: No credit card payment this month.

AmOne won’t make you stand in line or call your bank, either. And if you’re worried you won’t qualify, it’s free to check online. It takes just two minutes, and it could help you pay off your debt years faster.

 Kari Faber ([email protected]) is a staff writer at The Penny Hoarder.

*For Securities priced over $1,000, the purchase of fractional shares starts at $0.05.

**You’ll also bear the standard fees and expenses reflected in the pricing of the ETFs in your account, plus fees for various ancillary services charged by Stash and the custodian.

The Penny Hoarder is a Paid Affiliate/partner of Stash. Investment advisory services offered by Stash Investments LLC, an SEC-registered investment adviser. This material has been distributed for informational and educational purposes only and is not intended as investment, legal, accounting, or tax advice. Investing involves risk. 

*Bestow: Policies are issued by Bestow Life Insurance Company, Dallas, TX on policy form series BLI-ITPOL. Bestow Life Insurance products may not be available in all states. Policy limitations or restrictions may apply. Not available in New York. Our application asks lifestyle and health questions to determine eligibility in order to avoid requiring a medical exam. Prices start at $10/month based on an 18-year-old male rated Preferred Plus NT for a $100k policy for a 10-year term. Rates will vary based on underwriting review.