Low interest rates and the recent stock market surge make this a challenging time to find the best places for your extra cash.
1. Top off your emergency fund
Given today's shaky job picture, you need fully six months' worth of expenses set aside in a liquid account that you can raid if calamity strikes. Fall short? Adding to that stash is a no-brainer. Because yields on many of the typical cash options look rotten -- six-month CDs are kicking off an average 0.62%, and money-market funds are hovering around 0.05% - your best bet is a high-yield online savings account. One example: Ally Bank (ally.com; 1.75% yield; no minimum).
2. Spend five hours with a financial planner
If you're like most investors, your portfolio has been through the wringer -- and while you may not want someone to run your money for you, you could use a pro to help you get back on track. Call a fee-only planner and ask for a simple checkup, which is likely to run around a grand. To find such a planner, go to garrettplanningnetwork.com; an hourly rate of $150 to $250 is typical.
3. Buy a top-notch stock fund
Very few no-loads let you in for a minimum investment of as little as $1,000 ($2,500 is typical). Here are three that do -- all of which have low fees, excellent long-term records, and strategies that make particular sense now.
4. Upgrade your home appliances
Replacing your old machines with energy-efficient ones will cut your electricity and water bills -- plus land you Cash-for-Clunkers-style rebates of up to $250 apiece. Each of the models below is highly rated by Consumer Reports and will set you back less than $1,000.
5. Help on a large scale (really!)
You can turn $1,000 into one of the following:
8 sheep for needy rural families: Heifer International (heifer.org)
40 microloans for would-be entrepreneurs in Third World countries: Kiva (kiva.org)
1,000 trees planted to stop erosion and green up the planet: American Forests
6. Join a gym
Getting fit doesn't just feel good: It can cut your bills. The typical obese American (209 pounds or above for someone 5 feet 10 inches) incurred $1,429 more in health-care costs in 2006 than someone with a healthy weight (174 pounds or less). So buy a health-club membership (median cost: $775 a year) -- and spend the remaining $225 on a personal trainer to get you off to a strong start.
7. Beef up your IRA (If you're 50 or older)
Take advantage of catch-up provisions that let you put an extra $1,000 into your individual retirement account each year.
8. Pay down credit card debt
For every $1,000 you carry from month to month on your card balances, you pay $150 a year in interest at today's average 14.99% rate. Knock down that debt and stop the bleeding -- plus you'll boost your credit score.
9. Update your estate documents
Just because the federal government can't seem to focus on what the estate tax should be next year doesn't mean you can ignore your plan. It needs tweaking every five years or so (sooner if your life situation changes). If you use the same attorney who originally wrote your will, health-care proxy, and powers of attorney, updating the whole shebang should cost less than $1,000.
10. Start a young investor off right
Sound impossible to create a diversified portfolio of funds with just $1,000? It was -- until May, when Schwab dropped the minimums for its index funds to a rock-bottom $100 apiece. That makes them the perfect teaching tool: Your child can deposit holiday or birthday money into a mix of funds that mimics the allocation a high roller might have.
Information derived from a Money Magazine article. See other suggestions on the CNNMoney.com website.
