A Christmas bonus, a tax refund, or maybe a few hundred left in the bank — it’s easy to find yourself with a bit of spare cash around this time of year. The question is, what should you actually do with it? While it’s tempting to spend, experts say there are smarter ways to make your money work harder in 2026.
Choosing Where Your Cash Goes
The first step is to decide what matters most to you — paying off debt, investing for the future, or boosting your retirement savings. According to finance experts, that choice often depends on your age, your income, and how comfortable you are with risk, reports SBS News.
If you’re juggling a credit card balance or personal loan, start there. High-interest debt can quietly eat into your earnings faster than any investment can grow. Clearing it first can feel less exciting than buying shares, but it’s the most immediate financial win you can get.
Once that’s under control, it’s time to think longer term. Investing, super contributions, or extra mortgage payments can all stretch your dollars further — but each comes with its own set of pros and cons.
Investing in Stocks
Investing in the stock market is one of the most popular ways to build wealth, but it’s also one of the most unpredictable. Markets move fast, and emotions can make people jump in and out at the wrong times. Experts say diversification is the secret — spreading money across multiple companies or industries instead of betting everything on one stock.
For beginners, exchange-traded funds (ETFs) are a simple entry point. They offer exposure to a mix of shares, helping balance out risk. Still, it’s worth remembering that any money invested in stocks should be money you won’t need soon. Short-term market swings can be rough, and patience is key.
Building Super for the Long Haul
If you’re thinking decades ahead, superannuation remains one of the most tax-friendly options available. Contributions and earnings inside super are taxed at only 15%, which is lower than most people’s income tax rate.
Putting even a small extra amount into your fund each year can make a big difference by the time you retire, thanks to compounding returns. The catch, of course, is that your super is locked away until retirement — so this strategy suits people who can afford to wait.
Paying Down Your Mortgage
For those with a home loan, using extra money to reduce debt can be a stress-free way to save. With average mortgage rates sitting around 5%, paying off part of your loan gives you a guaranteed return of the same value — something the stock market can’t promise.
Finance lecturer Rakesh Gupta explains it simply: extra mortgage payments bring “certainty.” You may not see huge short-term growth, but reducing debt builds stability and frees up cash later in life.
A Balanced Approach Works Best
There’s no single right answer. Some people prefer to split their money — a bit toward super, a bit toward their mortgage, and maybe a small slice for investing. That way, you’re building wealth while keeping your financial life balanced.
Other low-risk options include term deposits and bonds, which offer modest but steady returns. Meanwhile, property and even cryptocurrencies remain on the riskier side — potentially rewarding, but unpredictable. Whatever you choose, the golden rule is to have a buffer. An emergency fund protects you from dipping into investments during tough times, giving your money space to grow.
In the end, making smart use of extra cash isn’t about being an expert investor — it’s about being deliberate. The holidays might come and go, but a few thoughtful choices now could make next December feel a whole lot more comfortable.
