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I’m a big fan of free money – who isn’t? But unless you’ve got generous relatives or a lucky ATM, free money is hard to come by. Until now.
Country Financial is hosting the Own Your Future Challenge, a contest where you can win $5,000 for yourself and another $5,000 for a local school. Not sure what you would do $5,000? Go party in Vegas? Buy a new Louis Vuitton purse?
If you’re struggling to come up with ideas, here are some responsible ways to spend that $5,000.
Starting an Emergency Fund
About half of Americans wouldn’t be able to find $400 in cash in case of an emergency. Are you one of them? If so, $5,000 could buy you the ability to sleep at night knowing that you can handle whatever life throws your way.
That amount could pay for a new water heater for your home, a last-minute flight for a family funeral or a set of new tires. It could also help tide you over in case you lose your job or your wife lands in the ER for a couple days.
Creating a 529 for Your Kid
College tuition grows at double the rate of inflation every year, and student debt continues to grow with each graduating class. Remember when I was still paying off $28,000 worth of loans?
That trend means that if you want your child to graduate college debt-free, they’ll need some extra help. Many families cannot afford to pay for a college education, but $5,000 could be a good start.
529s are special accounts where you can invest money to be used solely for education purposes. Like other investment accounts, they will grow every year, so that initial $5,000 could be worth almost $15,000 once your child is 18.
Funding a Retirement Plan
About a third of Americans don’t save for retirement. With the state of Social Security in flux, providing for your own retirement is key. Not sure how to begin? Well, $5,000 would be a great first start to a retirement account.
That number might seem small, but in 40 years, that $5,000 could be worth more than $50,000 with 6% interest. You could put it in a low-fee index fund and watch it grow, without any more contributions. Plus, if you save it in a traditional IRA or 401k, you could also deduct that on your taxes, which means more money for you!
How to Enter
$5,000 isn’t a million dollars, but it could change your life. It could be the difference between a college education, a happy retirement or not worrying about a small emergency.
Got an idea now for what you’d do $5,000? Now it’s time to hit record. Using any kind of video camera (including your cell phone) say your name, what you would use $5,000 for and how you would use $5,000 to help a local school.
The video should be less than one minute and you can upload it here. Share it on your social media channels and ask your loved ones to vote. Only the most popular videos will make it to the next round. The contest ends June 5 so get your video out today!
It’s super easy to create your own video. Don’t believe me? See my demo here. I literally just turned on my video camera on my cell phone and started recording. For more information about the contest and to submit your video, go here.