Experts: Here Are the 7 Best Ways To Spend an Extra $20

Depending on your financial situation, an extra $20 could be either a nice little monetary boost that can buy you another designer cocktail at the bar or a lifeline that helps you pay a monthly bill. No matter how wealthy (or not) you are, there are strategies that can give that $20 a lot more buying power.

The first thing you should do is assess how the $20 could be best used to fit your financial needs and goals, according to Todd Stearn — founder and CEO of The Money Manual, which provides tips, deals, strategies and resources for better money habits and money-saving solutions.

“When you know your financial goals, it’s easy to know what to do when you find an extra $20,” Stearn told GOBankingRates in an online interview.

Here’s a look at seven of the best ways to spend an extra $20, according to experts.

Hundreds of stocks trade at what’s considered a “low” price on both the Nasdaq and NYSE, according to Investors’ Business Daily. These range from penny stocks to those that trade for less than $15, $10 or $5 a share. The key is picking the right one. With an extra $20, you can theoretically buy 20 shares of a $1 stock or one share of a $20 stock.

As IBD noted, most institutional money managers “don’t touch cheap stocks.” IBD’s stock experts recommend avoiding stocks whose prices have stayed low for a long time because chances are those are “duds.” Instead, look for stocks that have attracted investor interest and are forming the right growth patterns.

When does an extra $20 turn into an extra $40? When you use the money on buy one, get one deals. Whether you go to a retailer, restaurant or some other business, getting a BOGO deal doubles your buying power. This is especially useful when buying essentials such as groceries, healthcare products or household items.

This is a great time to put your extra $20 into a high-yield savings account because the best accounts currently pay rates of 5% or higher. Another benefit is that you can get to certain savings goals quicker with a high return on your money.

“If your goal is to save for a vacation, that $20 can earn interest in a high-yield savings account,” Stearn said. “Or you may be building your emergency fund, so in that case the $20 would do best earning interest in a high-yield savings account.”

It’s no secret that the best way to get more bang for your buck is to purchase items in bulk quantities. Buying in bulk can save shoppers 27% compared to buying in lower quantities, according to LendingTree. Although an extra $20 might limit your ability to buy certain items in bulk, others are available for that price.

In terms of low-priced items, the experts at LendingTree recommend buying products like paper towels and bottled water to get the most savings. You can get especially good deals on store-brand items.

Although $20 might not pay a full bill, it can help put you over the top in case you just need a little extra money to pay the full balance. Stearn also recommends putting the money toward credit card debt if you are carrying a balance and want to whittle it down a little.

Summer veggie gardens can help you save hundreds of dollars on produce during the summer months — mostly because you just have to go pick it, instead of buy it. An extra $20 is plenty of money to buy soil and seeds for a vegetable garden. For example, Amazon has dozens of tomato seed packets on sale for $2 or less, while the Coast of Maine website recently advertised a 20-dry quart pack of organic vegetable planting soil for $12.99.

You don’t necessarily have to spend the extra $20 on yourself to put it to good use. Making a donation to a favorite charity is another option. In many cases, your $20 might be matched by the charity or one of its benefactors, which means the money goes even further. You might get a tax deduction out of it as well.