Have you recently joined the ranks of those who enjoy expendable income? Perhaps you got a raise at your work, or maybe you’ve started a part-time business that brings in an extra $1000 or so.

Even if you don’t have a large amount of expendable income, investing something every month can add up to huge sums over time.

When you have some extra money each month, wise financial management requires a few preliminary actions first, before conventional ‘investing.’

Consider the following ways to put that money to good financial use:

1. Pay off your high interest debts first. It’s hard to find a better investment than paying off credit card or other high interest debt.

* The stock market might average 10.5% over time, but that’s just the average. Additionally, there’s some risk.

* Paying off a debt with a 19% interest rate is a 19%, risk-free return.

* Paying off debt isn’t always exciting, since you’re left with nothing to show for it. But remember that you’ve stopped a significant loss, which will allow greater gains later.

2. Create your emergency fund. Put away at least a few thousand dollars in case of an emergency. This will be a cushion in case you lose your job or your car needs a major repair.

3. Consider the end use for the money you’re investing. It’s time to actually ‘invest,’ but what will the money be used for in the end? Is this to pay for your child’s college tuition or your retirement? Is the money going to be used for a down payment on a home?

* Knowing the end use will tell you the timeframe and the amount of risk to consider.

* Those uses with shorter time horizons should favor investments with less risk. You won’t have the time to realize the gains necessary to offset any significant losses.

* In most cases, opening a brokerage account makes sense for most people, as long as you choose investments based on the end use of your investment dollars.

4. Visit your HR department. If your company offers a 401(k) or an equivalent, it’s certainly something to consider. Not only can you invest pre-tax money, but also all realized earnings are tax-free until you start taking them out.

* You can even borrow money from these accounts to use for a house down payment without additional penalties.

5. Diversify your investments, but try not to get carried away. Diversification is always touted, but there’s a catch. Just as diversifying helps to prevent an investor from realizing significant losses, it also helps to prevent an investor from realizing any huge gains, as well.

6. Keep your eye on any investing-related fees. If you’re interested in mutual funds or other investments with fees attached to them, be certain to consider those fees in your investing decisions.

* The fees can mean higher performing investments are really only average performing investments when the fees are taken into account.

Having extra money come in each month is a blessing that can really be put toward the accomplishment of a variety of objectives. Ensure that your high-interest debt is laid to rest and that you have some cash reserves for emergencies. Then invest the money appropriately after determining your needs. Using this money wisely can change your life.