What do you do with that extra generous birthday check or unexpected raise?
It can be tempting to splurge on a new iPhone or extravagant vacation, but excessive spending may not be the most productive way to handle an extra $1,000 or so.
Before blowing your check on gifts, trips, or gadgets, consider directing it towards these seven options:
SEE ALSO: 15 money lies you should stop telling yourself by age 30
Start, or contribute more to, an emergency fund
"If you do come into some money, the first thing you need to do is make sure you have an emergency reserve," Kathleen Grace, certified financial planner and author of "Prince Not So Charming: A Romantic Tale of Financial Independence," tells Business Insider.
If you haven't started an emergency fund — or don't have at least three months worth of living expenses tucked away — use your extra cash to start building your cash cushion.
Unsure where to put it? A high-yield savings account is a possibility, or you could try a short-term bond fund or money market fund.
Pay off lingering debt
If you have debt — whether it's student loans, car loans, or credit card debt — a bonus or birthday check can be a great way to start tackling it.
Attack what Grace calls the "expensive debt" first — the high-interest debt like credit card debt, as interest can end up costing you thousands of dollars in the long run.
If you aren't sure where to start, consider the advice from 13 real people who paid off thousands or this seven step guide to paying off any form of debt.
Put it to work
If you're debt-free and have a sound emergency fund, put any extra cash to work so it will compound and turn into more over time.
The simplest starting point is to invest in your employer's 401(k) plan if possible — and make sure to take full advantage of your company's 401(k) match if they offer one.
Next, consider contributing money towards a Roth IRA or traditional IRA, individual retirement accounts with different tax structures. If you still have money left over, you can research low-cost index funds, which Warren Buffett recommends, and look into the online investment platforms known as "robo-advisers," which manage your investments for you through unique algorithms.
See the rest of the story at Business Insider