You can do a lot with $1,000. In fact, we came up with 39 surprising ways to use a grand. For example, you can grow your nest egg or build your brand, feather your nest or nurture a relationship, or just invest in yourself. Read on for more ideas.
Grow Your Investments
Consider these funds, stocks and ETFs for your portfolio.And open a Roth IRA, if you don't already have one.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Be a Philanthropist
Here's how you can start your own charitable fund, give to a classroom, volunteer on vacation and invest in a new company.
Spiff Up Your Home
With a grand, you can convert a fireplace to gas, add a backsplash with pizazz, install a putting green or buy a fire-resistant home safe.
Buy or Sell Smart
If you're buying a home, prepay interest on a mortgage to bring down the rate. If you're selling, enlist the help of a home stager.
Invest in Your Love Life
Splurge on a night at a great hotel, take a couple's cruise or nurture your marriage with therapy sessions.
Advance Your Career
Polish your professional image, take technology classes or prepare for a post-retirement career.
Invest in Yourself
Buy a bicycle and bike to work, self-publish a book, hire a personal trainer or learn a new language.
Improve Your Finances
You can't go wrong by paying down debt, building an emergency fund or hiring a lawyer to draft a comprehensive will for you.
[page break]
Grow your investments
Buy two great funds with low minimums
Put a little extra cash to work in a couple of funds with low fees and low minimums. Homestead Small Company Stock (HSCSX), a member of the Kiplinger 25, requires only $500 and charges just 1.06% a year in expenses. The fund’s 17.9% three-year annualized return (through November 30) outpaced the Russell 2000 index by an average of four percentage points per year. Nicholas Equity Income (NSEIX), which has a $500 minimum and a 0.79% expense ratio, invests in dividend-paying firms of all sizes, with a goal of delivering a higher yield than Standard & Poor’s 500-stock index. The fund’s recent yield of 2.9% is indeed higher than the S&P’s 2.3% yield, and over the past five years the fund returned 6.8% annualized, compared with 1.3% for the S&P 500.
Take a flier on low-priced stocks
All three of these stocks sell for less than $10 a share, meaning you can buy 100 shares of one company, or a mix of two or three, for less than a grand. Prices are as of November 30.
To make tiny semiconductors you need a super-clean manufacturing environment because a single speck of dust can destroy a chip. Entegris (symbol ENTG) offers contamination-control, shipping and storage services. Softness in the semiconductor business made for a rough 2012, but analysts expect earnings to resume rising in 2013. At $8.96, the stock sells for 15 times estimated 2013 earnings.
Erickson Air-Crane (EAC) builds helicopters used for firefighting and heavy-construction projects that are capable of lifting up to 20,000 pounds per load. At $7.62, EAC sells for just 5 times estimated 2013 earnings. D.A. Davidson & Co. analyst J.B. Groh thinks the stock will hit $10 within a year.
Verastem (VSTM), like many early-stage biotech companies, is not profitable. But UBS analyst Matthew Roden thinks the company has a formula likely to prove crucial in the fight against many types of cancer. The treatment, which targets stem cells that spread cancer, is still untested and could take more than a year to develop, but Roden thinks the stock, now $6.81, could reach $20 within two years.
Build an ETF portfolio
With exchange-traded funds, you can put together a well-rounded portfolio for less than $1,000. Start with 16 shares of Vanguard Total World Stock (VT, $48), which tracks an index of nearly all the globe’s publicly traded companies, then add two shares of Pimco Total Return (BOND, $110), an actively managed ETF that invests primarily in high-quality U.S. bonds. Not only will you hold positions in almost 4,000 stocks—including stakes in emerging-markets and small-company stocks—but you’ll also benefit from the investment ideas of Bill Gross, one of the world’s most renowned bond managers. This mix will give you a 78% allocation to stocks and a 22% allocation to bonds, appropriate for a long-term investor in his or her thirties or forties.
Open a Roth IRA
If you invest $1,000 in a fund that earns an 8% annual return and continue to invest $100 a month, in 30 years you’ll have nearly $160,000. Withdrawals are off-limits to the IRS after you turn 59½. TD Ameritrade requires no minimum investment for a Roth IRA, and many funds have low minimums for Roths.
For 2013, you may contribute to a Roth if your income is less than $127,000 if you’re single ($188,000 for couples who file jointly). If you earn more than that, you could convert a traditional IRA to a Roth. You must pay taxes on any pretax contributions and earnings.
Give a kid a jump-start on retirement
As long as your child has earned income of at least $1,000, you can give him or her that amount to invest in a Roth IRA. Target-date retirement funds are good choices for a young adult’s Roth. The funds’ mix of stocks and bonds gradually becomes more conservative as the investor nears retirement. Vanguard’s target-date funds have some of the best returns and lowest expenses in the category.
[page break]
Be a philanthropist
Start your own charitable fund
A number of community foundations let you funnel as little as $1,000 a year into donor-advised funds, sometimes called acorn funds, that build value over time and let you choose the recipient of your largesse. You contribute cash, stocks or other property—and take a tax deduction for your contribution each year—until you reach a certain threshold, typically $5,000 or $10,000. After that, you recommend an IRS-approved charity to the community foundation trustees. Although you no longer have direct control over the gift, the foundation usually respects your wishes. Community foundations with annual minimums of $1,000 or less include the Eau Claire (Wisconsin) Community Foundation and the Community Foundation of Washington County (Maryland). You can find a directory of community foundations nationwide at www.cof.org/locator.
Give to a classroom
What better way to spend your charitable dollars than to help teachers help kids? At DonorsChoose.org, you get your pick of teacher-proposed projects, from outfitting a media center with computer chairs to buying magazine subscriptions for seventh-graders. You can donate to one project or spread the wealth among several; Donors-Choose makes the purchase and sends it to the teacher. For your contribution, which is tax-deductible, you’ll get pictures of the students and feedback on how the project is helping them.
Volunteer on vacation
Use your next vacation to give something back. The Sierra Club offers environmental and historical-preservation trips throughout the country starting at about $400. For example, the program fee is $545 for a weeklong habitat-restoration project in May to remove non-native plants in Point Reyes National Seashore, in California. Round-trip flights from Washington, D.C., or New York City to San Francisco run about $300. Meals and accommodations in a rustic boathouse are included. Other weeklong projects include wildlife habitat work in Arizona’s Altar Valley ($695) and restoration of historic homesteads in Antietam National Battlefield, in Maryland ($695).
Be an angel
Thanks to the government’s approval in 2012 of “crowdfunding” as a way for businesses to raise capital, it’s easier than ever (not to mention cheaper) to invest in new companies. Upstart allows you to give money to entrepreneurial college graduates from a pool of 30 universities, including Harvard, Stanford and MIT. You can invest in $100 increments in one “upstart” or as many as you choose. You’ll receive a modest portion of the company’s income -- up to an annual rate of return of 14.99% -- or ten years (or lose your stake if the project goes under). You can also contribute to projects through Kickstarter, which focuses more on creative individuals who want to raise money to produce films, music and art. The biggest difference from Upstart: Projects keep 100% of the funding, so there’s no financial return to backers.
[page break]
Spiff up your home
Convert a fireplace to gas
Don’t want the muss and fuss of a wood fire in your fireplace? Install gas logs. For $600, you can get 2-foot-long, realistic-looking ceramic logs in your choice of wood type and arrangement (stacked neatly or askew), including a gas burner (www.gaslogguys.com). Installation costs $200 to $350, and it’s about $15 to $25 per foot to run a line to service the gas logs.
Add a backsplash with pizazz
An average, 10-by-10-foot kitchen requires about 33 square feet of backsplash coverage. You’ll pay about $28 per square foot, including installation, for midrange-quality “subway” tiles (like those used in New York City subway stations) or for basic-quality mosaic glass tile. Money left over? Update your sink faucet (try www.faucetdirect.com), cabinet hardware (www.knobdepot.com) or lights (www.lampsplus.com).
Channel Jack Nicklaus
Improve your short game (indoors or out) with a Pro Putt Trainer ($995 plus shipping). You get a 4-by-12-foot swath of Mirage TourPutt, a synthetic turf used by Ping at its testing facilities. TourPutt looks and acts like bent-grass turf, so your ball will roll perfectly straight in any direction and a chip shot will land and roll naturally. It requires no messy infill of sand or pelletized rubber for the grass to stand straight. The turf lays atop a 2.5-inch-high base of interlocking panels. The package comes with two cups and flags; spend another $17 for side moldings to keep your ball from falling overboard. The whole thing assembles or disassembles in less than a half-hour.
Keep cash safe in a safe
When electrical power goes down, so do ATMs and merchants’ ability to accept debit and credit cards. That’s why you should have enough cash at home -- preferably in tens and twenties -- to cover the cost of a week’s worth of groceries and emergency supplies, as well as gas and a motel room in case of an evacuation. A rule of thumb is to have $500 to $1,000 on hand. But where to safeguard it, as well as important documents and perhaps some valuables? You’ll pay about $200 to $500 at www.valuesafes.com for a home safe that’s fire-resistant (rated for one hour of fire) with a bit more than 1 cubic foot of space. For a two-hour rating and 2 cubic feet of space, the price jumps to about $700.
[page break]
Buy or sell smart
Buy down the mortgage rate
On a $200,000, 30-year fixed-rate loan, $1,000 paid at closing as prepaid interest will typically buy down the rate by 0.125%. That would save $5,168 in interest over the life of the mortgage. When you’re loan shopping, ask first for a rate with no points (a point is 1% of the loan amount), then ask how much the lender will adjust the rate per point.
Stage to sell
A home stager can boost the appeal, and the sale price, of your home. Stagers declutter and rearrange furniture to improve traffic flow and make rooms appear more spacious. You can find a stager at www.stagedhomes.com. Stagers charge $250 to $500 for a walk-through and consultation; they generally charge $50 to $150 an hour for additional services, and $500 to $1,500 a month for rental of furniture and accessories.
[page break]
Invest in your love life
Splurge on romance
A quick way to accomplish couples therapy (or celebrate Valentine’s Day): Spend $1,000 on a night at a great hotel with a terrific restaurant. The Inn at Little Washington, a five-star inn in rural Washington, Va., is famous for its world-class restaurant. Saturday prices bust the $1,000 budget, but a Friday-night stay with a prix-fixe dinner for two comes in at $971. Canoe Bay Hotel, in Chetek, Wis., is a haute-rustic resort on 300 wooded acres. You get a fireplace, a private deck and a lake view. The Treetop Cottage runs $695 a night; a prix-fixe dinner for two costs $150. Total: $845. Willows Lodge, in Woodinville, Wash., has a 2,500-square-foot spa and two acclaimed restaurants. A three-course dinner for two with a bottle of wine at the bistro-style Barking Frog costs about $200; rooms start at $239. Total: $439.
Nurture your marriage
Getting through a rough patch, or just deepening your relationship, may require help from a licensed marriage and family therapist. A one-hour session ranges from $75 to $200 and averages $100, according to the National Directory of Marriage and Family Counseling. Treatment typically runs 12 weeks, but ten sessions, at $100 each, should put you on the right track. To find a therapist in your area, go to www.therapistlocator.net.
Take a vacation for two
Whoever calls it “flyover country” hasn’t teamed his way through forests, between mountains and across rivers on a cross-country train trip. On the California Zephyr, you can journey on Amtrak from Chicago to San Francisco in about 50 hours. When two passengers share a sleeping car, both pay a rail fare but they split the cost of the room. We found fares for about $899 one way, including a shared roomette. Spend your extra $100 on an intimate meal in San Francisco or put it toward your return flight.
Rekindle romance with a cruise holiday
We found a five-night trip for two, including an evening in Miami and four nights on a Bahamas cruise ship, starting at $1,045 (including airfare from New York’s LaGuardia, plus taxes and fees) at Gate1Travel.com. Your itinerary acquaints you with Miami’s caliente nightlife and gives you a chance to enjoy the Bahama classics, including snorkeling and strolling along white sand beaches.
Keep the kids happy
Build your own rear-seat entertainment system with two iPad 2 Wi-Fi tablets (16 GB; $399 each) and headrest mounts. The Griffin Technology Cinema Seat mount is just $12 on Amazon. More heavy-duty mounts, such as the TouCoul CV1002 CoolVue and GripDaddy v2ARM (both $60), attach with brackets and have extensions, so you could place one screen between the front seats. Invest in two 6-foot charge cables ($6 each) and a dual car-charging port, such as Energizer’s Universal USB Charger ($15), so that you never run out of juice. You can cut the cost by $400 if you go Android instead. The Google Nexus 7 and the Amazon Kindle Fire HD are each $199. Or buy a refurbished tablet; they’re tested to meet manufacturer specs.
[page break]
Advance your career
Build your brand
Job hunting or not, you can stay poised for new opportunities -- and boost your standing at the office -- by polishing your professional image. A career adviser, such as a counselor or coach, can help with matters such as updating your résumé, networking and identifying strengths you can showcase in the workplace and in interviews. Costs vary by region and adviser, but you might pay about $500 for a few sessions with a career coach. Consider hiring a photographer to take professional headshots (about $200); use your favorite photograph on sites such as Facebook, LinkedIn and Twitter for a cohesive online presence. Want to share your expertise on a blog or personal Web site? You can create one free using a platform such as WordPress.com. But for $99 a year, you can upgrade to the WordPress Value Bundle, which includes a domain name of your choice, high-definition video uploads and custom design options. Those looking for work may want to invest in a LinkedIn Job Seeker Premium account ($180 for six months). Among its benefits are five monthly “InMail” messages, which you can use to contact anyone on LinkedIn. Need business cards? Design a card at a site such as Vistaprint.com, where you’ll pay $15 for 500 premium matte cards.
Awaken the geek within
Many community colleges offer classes that could help you learn the technical skills you need to get ahead in your job (or find a better one). For example, Montgomery College, a community college with three campuses in Montgomery County, near Washington, D.C., offers more than 100 technology classes, ranging from digital literacy to programming for mobile devices. For county residents, your $1,000 will cover tuition and fees for seven credits.
Prepare for a post-retirement career
If you’re already doing taxes for family members, consider becoming an enrolled agent, a licensed tax professional who has the right to represent taxpayers before the IRS. For $995, you can take an online course that will prepare you for the exam you must pass to obtain the designation. For more information, go to the Web site of the National Association of Enrolled Agents.
There’s a certificate program for just about every second-act career imaginable, from landscape design to writing grant proposals, says Kerry Hannon, author of Great Jobs for Everyone 50+. The International Fitness Professionals Association offers a senior fitness specialist certificate for $479, which leaves plenty left over for new exercise equipment. You could find a second career as a geriatric care manager, a person who helps seniors navigate their health care options. The application, handbook and exam to become a certified care manager costs $270. You can use the rest of your money to buy two years of membership ($345 per year) in the National Association of Professional Geriatric Care Managers.
[page break]
Invest in yourself
Buy a bicycle and ride to work
Commuting by bike has both physical and financial benefits (see our bicycling commuter cost calculator). For $1,000, you can buy a good bike and a good helmet (think of it as cheap life and health insurance). If your ride to work isn’t too onerous, consider the eight-speed Jamis Commuter 4 ($950). Its curved handlebars position you upright as you navigate through traffic, its padded seat is comfy, and it’s equipped with fenders and a luggage rack. It comes in a top-tube or step-over design. For longer commutes, the Raleigh Port Townsend (about $900) is a better choice. It has drop-style handlebars and 18 speeds, as well as commuter-friendly fenders and a front rack.
Self-publish a book
Maybe you’ve dreamed of seeing your name on the cover of a novel or sharing your expertise in a book. Making a paper or digital version of your masterpiece is free at Amazon’s CreateSpace.com (the publisher takes a percentage of your sales), but you’ll have to pay if you want help with editing and design. Among CreateSpace’s services, for example, is the $728 Total Design Freedom Standard package, in which a professional team designs the book’s cover and interior based on your input. Tack on Comprehensive Copyediting for $160 (up to 10,000 words; 1.6 cents per word thereafter).
Hire a personal trainer
Fortify your New Year’s resolution to get and stay fit by hiring a personal trainer. A one-on-one session with a certified trainer, in your home or at a club, ranges from $40 to $100 an hour, according to the American Council on Exercise, the largest U.S. certifying agency. If you share a coach with a few friends, you can bring the hourly price to $20 to $30 each (giving you at least 33 sessions for $1,000). Find an ACE-certified trainer here.
Learn Chinese
Expand your language skills (and impress your friends!) with lessons in Mandarin Chinese, the world’s most widely spoken language. Beijing Language and Culture University’s four-week language programs for international students cost as little as $950 for tuition and dorm accommodations. You’ll pay extra for the application fee (about $95), airfare and food. For more information, visit www.studyinblcu.com.
Closer to home, try a 12-month subscription to Rosetta Stone’s TOTALe Online (regularly $299, but look for specials at www.rosettastone.com).
[page break]
Eat your veggies
You can’t go wrong using an extra thousand bucks for one of these personal finance staples:
Pay down debt. If you pay, say, a credit card balance with an 18% interest rate, you get an 18% return -- plus the priceless feeling of being more in control of your finances.
Add to an emergency fund. Or start one, if you don’t have one yet. Ideally, your account will eventually have enough to cover at least six months of expenses.
Write a will. A lawyer will charge about $300 for a simple will. You could pay $1,000 for a more comprehensive estate plan that includes a living will or health care directive and a power of attorney.