Better Ways to Spend Your Black Friday Budget

Here are 7 ways to put your Black Friday cash to better use.

More than 154 million Americans spent money over the Black Friday weekend in 2016, according to the National Retail Federation. The shoppers spent $289.19 per person on bargain holiday gifts — or treats for themselves.

Of course, giving gifts is something many people enjoy. However, retail merchandise might not be the best use of your hard-earned cash. There are plenty of ways to use that nearly $300 to contribute toward a real change in the world or to your future. Read on to find out why you should stop Black Friday shopping.

Invest in Stocks

When you purchase a stock, you buy into a publicly traded company. If the company profits, you come out ahead, as well. Although there is always a risk of losing money, wise investments can lead to growth that far surpasses interest paid on the average savings account. Yes, stock investing can be intimidating and confusing, but knowing where to start can go a long way toward growing your savings.

“For new investors, I suggest growth-oriented, no-load mutual funds,” said Sharon Marchisello, author of “Live Cheaply, Be Happy, Grow Wealthy.” “They can be purchased directly from a company like Vanguard or Fidelity. For people more interested in individual stocks, open an account at a discount brokerage like Scottrade.”

As a new investor, you should take time to learn about the business and do your research on how the market works.

“One of the best ways to learn about investing is to join an investment club,” Marchisello said. “The group researches investment products together, and then decides as a group what and when to buy and sell. Many of the mutual fund companies, like Vanguard and Fidelity, also have online tools to evaluate investments, as well as a lot of articles covering various investment topics.”

See: How to Invest in Stocks Like a Pro

Establish a College Fund for Your Child

Higher education is one of the best gifts you can give your child, but college isn’t cheap. The average cost to attend an in-state public college is $9,650, according to CollegeData. It costs $24,930 for out-of-state residents attending a public university and a whopping $33,480 to attend a private institution. Moreover, graduates of the Class of 2016 left school with an average of $37,172 of student loan debt, according to Forbes. Those costs are for tuition and fees only and don’t include room, board and books.

“As an alternative to purchasing flashy electronics for a child, think about giving them the gift of education,” said Divam N. Mehta, a certified financial planner and founder of Mehta Financial Group. “529 college plans are a great option for investors who are looking to save for children’s college education. The account can be opened by parents, grandparents and even uncles and aunts for the benefit of a child.”

If you want to open a 529 savings plan, there are two different options: the college savings plan and the pre-paid tuition plan. They’re sponsored by all 50 states and Washington, D.C.

“Investment-style 529 plans offer clients a very flexible and tax-efficient method to save for college education, as they provide for tax-free growth and tax-free withdrawals as long as the funds are used for qualified college expenses,” Mehta said. “In addition, 529s are also portable … so, if one child does not use all of the funds, the proceeds can be transferred to another child tax-free and penalty-free.”

Pay Down Your Debt

The average American household owes about $139,500 in combined debt, according to Nasdaq. Furthermore, with the average cost of a wedding topping $35,000, many newlyweds start off their marriage in debt. With that in mind, you might be better off paying down some of what you owe to credit card companies and mortgage lenders than going on a Black Friday buying binge.

“When you decide to pay off your debt, the first thing you need to do is make a list of all your outstanding debt,” said JeFreda R. Brown, CEO of Goshen Business Group, LLC. “In order to know how much of your income is going to debt payments, you can calculate the debt safety ratio. This is the total monthly debt payment (except mortgage payments) divided by the total monthly net pay. A ratio of 10 percent or less is best. If it’s close to 20 percent, this tells you that you are paying too much in debt.”

Brown has also developed a systematic approach to paying debts.

“Place the debts in order from smallest balance to largest balance,” Brown said. “Focus in on paying off the smallest debt first. You will have to pay more than the minimum amount. Compiling this list also helps you see how much you need to pay each month to pay each debt off. If you want to pay off a debt in 12 months, divide the balance due by 12.”

Open a Roth IRA

Roth IRAs are retirement savings vehicles that enjoy a special tax status. The IRS website outlines the differences between Roth IRAs and traditional IRAs. It’s especially important to open an individual retirement account if you don’t have an employer-based 401k.

“Depending on your income … you can contribute up to $5,500 ($6,500 if you’re 50 or older),” said ReKeithen Miller, certified financial planner, enrolled agent and portfolio manager with Palisades Hudson Financial Group. “The great thing about a Roth IRA is money invested in the account grows tax-free, and qualified withdrawals are not subject to taxation, either.”

As with traditional investment accounts, you can choose from a wide selection of investments to add to your Roth IRA.

“Roth IRAs are powerful savings vehicles for younger individuals who have more time to let the investments in the account grow,” Miller said. “As for what to buy in your Roth IRA, I’d recommend investing in low-cost index funds, or for those who don’t want to manage their own investments, a target-date retirement fund that is close to the date you expect to retire.”

Find Out More: A Beginner’s Guide to Roth IRAs

Beef Up Your Emergency Fund

From broken appliances to car repairs, having a few hundred bucks in savings — for example, the amount the average American spends on Black Friday — could prevent a minor emergency from becoming a major setback.

“When looking for a place to stash your cash, bypass the brick-and-mortar banks and look online,” Miller said. “Online banks don’t have physical branches, so they can offer much higher interest rates than what you can find at traditional banks. Instead of getting paltry 0.01 percent rates offered at many traditional banks, some online banks offer rates that are 100 times higher at 1 percent.”

Ally Bank, named the Best Online Bank of 2017 by GOBankingRates, offers 2.10% APY on savings accounts — one of the highest rates in the industry. Your Black Friday funds are a good place to start, but if you could grow a few hundred dollars into a few thousand, that would be even better.

“I emphasize with clients that an emergency fund should be six months of fixed costs, including insurance, groceries and rent or mortgage,” Mehta said. “While it might take time to build this emergency fund, many people fail to install this major step during their budgeting and financial plan.”

Take a Class to Further Your Skills

MOOC is an acronym that stands for massive open online course. Unlike courses at your local community college, though, MOOCs can be taken without qualifying or being accepted into a program. There is also no limit to the number of people who can sign up, hence the name.

When MOOCs first began appearing online, they were lauded as a new format that had the potential to eliminate social, class, economic and geographical barriers to education. Many of them come with a fee.

Consider using your Black Friday money to pursue an exciting and eclectic range of courses that could help you develop your career, learn a new skill or simply expand your mind. For example, one of the biggest and best-known MOOC platforms, Coursera, offers classes in subjects such as cloud computing, medical neuroscience, market research, Greek and Roman mythology and game design.

Explore the Country

No matter where you live in America, it’s likely that you’re close to a national park. In 1916, President Woodrow Wilson signed a law that created the National Park Service as part of the Department of the Interior. The National Park Service oversees hundreds of national parks, battlefields, monuments, recreation areas, seashores and other areas.

Although $300 in Black Friday money likely won’t be enough to cover a full-fledged vacation, it is more than enough for admission to a national park. For $80, you can score an America the Beautiful pass, which gains you entry to more than 2,000 federal recreation sites.

It’s nice that you want to buy things for the people you love. But instead of splurging on Black Friday bargains and doorbusters, spend that cash on any number of self-improvement pursuits that could secure your future, improve the lives of your children and make you a better person.

Up Next: 6 Reasons to Skip Christmas and Travel Instead