What can I do with an extra $300?

Our Sun Life inspired Fall Challenge asked users to save $300 over the course of three months.

If you joined the Challenge, you may already have plans for your Challenge savings. But, have you considered making a strategic choice with that money? It’s important to save, but it’s also important to know how to use those savings to the best of your advantage too. If you’re looking for some inspiration on how to do so, we’ve got a few suggestions for you.

Put it in your emergency fund

If you’re unsure about what to do with a bit of extra money, putting it in your emergency fund is always a safe bet. This is particularly true if you don’t have an emergency fund yet or you’ve recently reduced yours to cover a financial emergency.

Plus, you may not know what they are yet, but you could face some unexpected expenses in 2022. An extra $300 might help to completely offset the cost of a surprise car repair or vet bill and help you get on with your life.

Pay for a year of life or health insurance

While an emergency fund can help to cover some expenses, it may not be sufficient to cover a major unexpected event. Part of any solid financial strategy is creating a safety net for yourself and your loved ones. One such way of doing so is to purchase insurance products, like life or health insurance, to ensure that you and your loved ones are taken care of in the event something happens to you.

When it comes to insurance, many people overestimate what it would cost to cover themselves adequately. Though premiums are determined on an individual basis, some people assume that a year of insurance coverage could cost them roughly three times what it actually would. Younger people, who tend to have lower premiums, tend to assume that insurance will cost them up to as much as seven times more than it does!₁

So, if you’re not already insured, know that it’s worth your while to take a closer look at health and/or life insurance to see if a policy makes sense for you.. If you’re unsure about where to start, a financial advisor can help explain the differences between various policies and assist you with making a choice that fits into your long-term strategy.

Put it in one of your registered accounts

If you’ve got a registered investment account, like a TFSA or an RESP, moving your $300 in Challenge savings into one is a great idea. Some people have registered accounts but fail to meet their contribution limits each year. So, while everyone’s situation calls for a different money management strategy, saving in a registered account can offer a clear tax benefit!

With an extra $300, you can choose to save your cash outright or purchase securities and move them to your registered account where they can flourish over time. Again, this is an area where the help of a financial advisor can be beneficial, as an advisor can provide advice on how your $300 would be best spent given your goals, risk tolerance and other preferences.

1 lifeinsurance.org/blog/many-overestimate-the-cost-of-life-insurance

*Sun Life Assurance Company of Canada and Sun Life Advisors do not provide legal, accounting or taxation advice to clients. Make sure you seek advice from a qualified professional, including a thorough examination of your specific legal, accounting and tax situation.