14 Great Ways to Spend or Invest $1,000

The holidays have come an gone, and if you've stuck to your budget there's a chance you have a few extra dollars in your account. Here are some great ways to make that money work for you.

Jan. 12, 2017 Kiplinger

If you have a stash of cash earning practically nothing, take a gander at the 14 ideas we present in this slide show. We put our entire staff to work brainstorming and researching suggestions to unlock the power of your money. These ideas require only a small stack of bills, and all of them are either timely or practical or worthy of a splurge. Take a look.

Instant Diversification
For $1,000, you can own a little bit of everything with Vanguard Star Fund (symbol VGSTX), a collection of 11 actively managed, low-expense Vanguard funds. Star has roughly 60% of its assets in stocks and the rest in bonds. Within the eight stock funds, you’ll find large- and small-company U.S. stocks; fast-growing companies and slower growers that trade at bargain prices; and nearly 20% in foreign stocks. Star also holds funds that invest in short-term, medium-term and long-term bonds. Star beat similar funds in nine of the past 10 calendar years.

Buy Inflation Protection
To hedge against rising rates and prices, invest in Treasury inflation-protected securities. TIPS, which are issued by Uncle Sam, pay a fixed rate of interest on a principal that is adjusted for inflation. When your bond matures, you receive the inflation-adjusted principal. You can buy TIPS, which are sold in $100 increments in maturities of five, 10 and 30 years, directly at TreasuryDirect.gov.

Caribbean Beach Weekend
You can scoop up great deals to the Caribbean for a long weekend getaway this winter. We recently found a package to Riu Montego Bay in Jamaica on CheapCaribbean.com for $679 per person (four nights, airfare included), with travel through June. You can relax by the expansive pool with the “drink of the day” and eat jerk chicken from a local shack, or head to nearby Dunn’s River Falls for zip-lining, hiking and snorkeling.

Contribute to an HSA Account
If you have an eligible health insurance policy, you can invest the HSA money (see HSASearch.com) and let it grow tax-free for future eligible expenses (save your statements so you can claim the expense later). You can’t make new HSA contributions after you enroll in Medicare, but you can use the money you’ve already saved tax-free for Medicare premiums plus out-of-pocket medical and drug costs.

Support a Local Charity
Although $1,000 is a drop in the bucket for major charities, it could make a huge difference to your local arts council, food bank or animal shelter. Most small charities aren’t rated by watchdog groups such as Charity Navigator and CharityWatch, so check out the charity’s website to see the financial information it provides potential donors, says Sandra Miniutti, a spokeswoman for Charity Navigator. Ask the group for a copy of its Form 990, the annual report charities are required to provide to the IRS. You can find the report online free at Guidestar.org, but requesting a copy from the charity “is a good litmus test of how transparent they’re willing to be,” says Miniutti. Ask the organization for biographies of board members and top executives, says Daniel Borochoff, founder of CharityWatch.