32 Smart Ways to Spend $1,000
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32 Smart Ways to Spend $1,000

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You may have your own priorities for what to do with $1,000: pay down debt, add to your emergency fund, stash it in retirement savings. We applaud the impulse to bolster your finances—and list these and other staples as part of our collection of ideas. But we also offer surprising suggestions that are equally rewarding.

Want to invest it? We assembled ETF, fund and stock picks. Want to spend it? You could splurge on a romantic getaway, improve your home or invest in yourself. Does an extra thousand bucks spark the philanthropist in you? We have tips for smart giving, too.

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All ETF and stock prices are as of December 5, 2014.

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32 Smart Ways to Spend $1,000 | Slide 2 of 33

Build a High-Yield ETF Portfolio

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This package of three exchange-traded funds yields 4.5%. Start with three shares of junk-bond fund iShares iBoxx $ High Yield Corporate Bond (HYG, $90, 5.2% yield). Add 10 shares of iShares US Preferred Stock ETF (PFF, $39, 5.6%), which invests in preferred stocks—stock-bond hybrids that pay fixed dividends.

Finally, buy four shares of Vanguard REIT ETF (VNQ, $81, 2.5%). This fund tracks an index of real estate investment trusts that own malls, hotels, apartments and other kinds of property. (Money-saving hint: If you have a brokerage account at Fidelity, you can buy the two iShares ETFs commission-free. Likewise for Vanguard brokerage clients and the Vanguard ETF.)

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32 Smart Ways to Spend $1,000 | Slide 3 of 33

Buy a Top-Notch Fund

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You don’t need a lot of cash to own top funds. These five funds have performed better than their category average over the past 10 years, and each requires $1,000 or less to get started. Both Oakmark Fund (OAKMX) and Oakmark Select (OAKLX) invest mainly in large U.S. companies selling at bargain prices. Comanager Bill Nygren has been at Oakmark Fund since 2000 and at Select since 1996.

Homestead Small-Company Stock (HSCSX) is a member of the Kiplinger 25. At the end of 2015, Mark Yockey will celebrate his 20th anniversary as manager of Artisan International (ARTIX), which invests mainly in large, growing foreign companies. For an all-in-one option, try Vanguard STAR (VGSTX). The fund holds 11 actively managed Vanguard funds, with 60% of its assets in stock funds and most of the rest in bond funds.

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32 Smart Ways to Spend $1,000 | Slide 4 of 33

Be a Lender

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At peer-to-peer lending sites such as Lending Club and Prosper, you can invest in personal loans and receive monthly payments and interest as borrowers repay the loans.

To mitigate risk, create a portfolio of loans with a range of credit ratings. Prosper lists average investor returns of 5.5% to 11.4%, and Lending Club’s historical returns range from 4.7% to 9%.

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32 Smart Ways to Spend $1,000 | Slide 5 of 33

Take a Flier on a Low-Priced Stock

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You can buy 100 shares of any of the following seven stocks for less than $1,000. They all carry a fair amount of risk, but if things go right, you could make a bundle:

Aptose Biosciences (APTO, $7.08). Business: biotechnology.

Aurinia Pharmaceuticals (AUPH, $3.82), biotechnology.

Groupon (GRPN, $7.27), daily deal provider.

Kratos Defense & Security Solutions (KTOS, $5.10), maker of electronic components.

ParkerVision (PRKR, $0.91), semiconductor designer.

Rite Aid (RAD, $5.69), drugstore chain.

Sirius XM Holdings (SIRI, $3.49), satellite radio.

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32 Smart Ways to Spend $1,000 | Slide 6 of 33

Grab 10 Shares of a Blue Chip

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Prefer more-established companies? You could buy 10 shares of any one of the following five stocks for roughly a grand. The reward: healthy dividends now and the likelihood of share-price gains as earnings grow.

CVS Health (CVS, $91, 1.2% yield). The drugstore chain is getting a boost from its rapidly growing pharmacy-services segment.

Danaher Corp. (DHR, $85, 0.5%). Danaher makes everything from medical devices to measuring systems. It has $12 billion in the till for making acquisitions.

Walt Disney (DIS, $94, 1.2%). The smashing success of Frozen proves that we are all kids at heart. The entertainment conglom­erate owns theme parks, TV stations, ESPN and more.

MasterCard (MA, $89, 0.7%). The credit card company boosted its dividend by a stunning 45% in December and increased its share-buyback program.

Pepsico (PEP, $98, 2.7%). Besides its namesake soft drinks, Pepsi owns Frito-Lay, Quaker and other great brands.

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32 Smart Ways to Spend $1,000 | Slide 7 of 33

Create a Kitchen Command Center

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Check recipes, watch videos and stream music with a wall-mounted tablet. The Apple iPad Air 2 (starting at $500), the Amazon Fire HDX 8.9 (starting at $380) and the Samsung Galaxy Note 10.1 (about $500 for the Wi-Fi edition) all have the bright HD displays and sturdy construction required for kitchen duty. Attach your choice to the wall (and out of range of splatters) with TMS 1030 Tablet Flex Pack ($100).

For sound that will shake the spice rack, pair your slate with Jawbone’s Big Jambox Wireless Bluetooth Speaker ($240 online), which is compact enough to fit on most countertops.

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32 Smart Ways to Spend $1,000 | Slide 8 of 33

Upgrade Your Home Office

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Studies show that a standing desk can lower the risk of obesity, diabetes and even cancer. We like the WorkFit-S Single LD with Worksurface+ from Ergotron ($450 to $500). It’s height-adjustable for standing and sitting, and it’s equipped with a mount for an LCD monitor plus a separate keyboard tray and workspace.

Every office needs a color scanner for digit­izing paper documents, photos, logos and even stacks of business cards. The Epson WorkForce DS-510 ($350) can scan up to 26 pages per minute and both sides of a page in one pass. The Logitech Bluetooth K810 illuminated keyboard ($100) is a versatile addition. It works with Windows, Apple iOS and Android devices; simply press a button on the keyboard to switch between PC, smartphone and tablet. If you’re pulling an all-nighter, you’ll appreciate the backlit keys.

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32 Smart Ways to Spend $1,000 | Slide 9 of 33

Indulge Your Fantasy at a Camp

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If you’ve always secretly wondered what it would be like to be, say, an astronaut or captain of a sailboat, get a taste by going to camp. At the Adult Space Academy, in Huntsville, Ala., you can train in simulators, launch model rockets and more. The price for four days, including meals and lodging, is $599, plus a $50 registration fee.

Or spend time on the ocean instead of in (simulated) orbit. The Offshore Sailing School has locations in Florida, New York, New Jersey and the British Virgin Islands. The two-day Intro to Sailing Vacation teaches the basics; depending on the season, you’ll pay $695 to $895 (including double-occupancy lodging) to take the course at the Pink Shell Beach Resort & Marina, in Fort Myers Beach, Fla.

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Wine connoisseurs can sample the Wine Lovers Boot Camp (Taste Like a Pro) from the Culinary Institute of America, learning about tasting techniques and wine varietals. The two-day course, in St. Helena, Calif., runs $895.

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32 Smart Ways to Spend $1,000 | Slide 10 of 33

Get Wine by the Month

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For an easier way to become an oenophile, join Club W, a subscription service that recommends wines based on your preferences for flavors and foods, such as lemon and coffee, then refines its suggestions after each order you make (you can also make your own selections).

The company buys small-lot wines from farms and vineyards, eliminating the middleman. Six bottles a month at $13 each (the club covers the $6 flat shipping rate on orders of six bottles or more) for 12 months brings you to $936.

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32 Smart Ways to Spend $1,000 | Slide 11 of 33

Splurge on a Spa

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You don’t have to spend a fortune to go to a romantic spa. Here are three where the pampering comes in at $1,000 or less (prices are based on a one-night stay and vary depending on the services you choose).

Balboa Bay Resort, in Newport Beach, Calif., is a waterfront hotel with a full-service spa that includes skin treatments, massages, a eucalyptus steam room, a sauna and a lounge with a fireplace. Try the body scrub paired with a massage, and then explore the bay in a kayak. Travaasa Austin, an all-inclusive resort on the edge of the Balcones Canyonlands Preserve in Austin, Tex., offers spa treatments as well as more-strenuous activities, such as sunrise horseback riding. Mohonk Mountain House, in New Paltz, N.Y., is a historic Victorian castle near the Catskill Mountains. It has 16 treatment rooms, a solarium with a stone fireplace, an outdoor heated mineral pool and an assortment of services.

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32 Smart Ways to Spend $1,000 | Slide 12 of 33

Take a Class

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Give your career a boost by, say, polishing your public-speaking skills or learning basic coding for software programs. Most community colleges have good options at affordable prices.

The University of Northwestern Ohio, for instance, charges $205 per credit hour for courses in its College of Business, Health Professions and Occupational Professions. If you took three credit hours, you’d have money left for textbooks, supplies and any fees. Many colleges allow senior citizens to take classes free.

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32 Smart Ways to Spend $1,000 | Slide 13 of 33

Remake Your Bed

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Want to feel like a king for eight hours out of every 24? Outfit your bed with high-end sheets. Start with those made of long-staple Egyptian cotton: The extra-long fiber makes for a smooth, soft fabric that improves with washing and won’t pill. A high thread count doesn’t necessarily signify better quality. You can find high-end sheets with a thread count as low as 200.

Marissa Murphy, of Pioneer Linens, in West Palm Beach, Fla., recommends sheets made by Matouk, a top-quality U.S. manufacturer whose fabrics are woven in Italy. A king-size percale set by Matouk that includes a top and bottom sheet, a duvet cover and a pair of pillowcases in the Butterfield pattern runs $1,069 at www.pioneerlinens.com.

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32 Smart Ways to Spend $1,000 | Slide 14 of 33

Reap Credit Card Rewards

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Pack plastic in your wallet that tacks on a generous helping of bonus points. The Gold Delta Skymiles and United MileagePlus Explorer cards (each has a $95 annual fee, waived the first year) hand over 30,000 points if you make $1,000 in purchases in the first three months.

The Barclaycard Arrival World MasterCard (no annual fee) offers a bonus of 20,000 miles for $1,000 of spending in the first 90 days.

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32 Smart Ways to Spend $1,000 | Slide 15 of 33

Take a Language-Immersion Trip

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Learn a foreign language by going straight to the source. During the low season, La Mariposa Spanish School & Eco-Hotel, in Nicaragua, charges $450 plus tax per week for a hotel stay (or stay with a host family for $380).

Included are Spanish classes, meals and afternoon outings to explore and practice your language skills. That leaves room in a $1,000 budget for airfare. Look for other programs at www.studyabroad.com.

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32 Smart Ways to Spend $1,000 | Slide 16 of 33

Make Catch-Up Contributions

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If you’re 50 or older, you’re eligible to stuff an extra $1,000 into a traditional or Roth IRA in 2015, in addition to the standard $5,500 contribution limit for the year. People 55 and older can make a catch-up contribution of $1,000 to a health savings account in 2015, on top of the standard $3,350 limit per year for individuals.

Contributions to an HSA are tax-deductible (or pretax in an employer’s plan); the money grows in the account tax-deferred; and you don’t pay taxes when you withdraw funds for qualifying medical expenses.

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32 Smart Ways to Spend $1,000 | Slide 17 of 33

Beef Up Your Emergency Fund

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Stash the money in a no-fee, interest-bearing savings account, such as the GE Capital Bank Online Savings account (yield: 0.95%).

When your fund is flush, raise the deductible on your home-insurance policy by $1,000 and lower your premiums. You’ll have enough cash in the bank to cover any losses.

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32 Smart Ways to Spend $1,000 | Slide 18 of 33

Pay Off a Chunk of Debt

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This could save you a bundle in interest. Say you started with a credit card balance of $5,000 with a typical 13.18% annual percentage rate and you’ve already made six $125 payments. Pay off another $1,000, then continue paying $125 monthly until the balance is paid off.

You’ll save $567 in interest compared with just paying $125 each month for the life of the debt.

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32 Smart Ways to Spend $1,000 | Slide 19 of 33

Prepay Your Mortgage

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If you owe more than 80% of your home’s original value, you have to pay for private mortgage insurance.

Putting an extra $1,000 toward your payments will push you closer to the 20% equity you need to request a cancellation of PMI.

Plus, you’ll trim some interest off the debt.

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32 Smart Ways to Spend $1,000 | Slide 20 of 33

Strengthen Your Estate Plan

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To have a lawyer draw up a simple will, durable power of attorney and advance medical directive should cost about $1,000, says Jordon Rosen, a certified public accountant and accredited estate planner in Wilmington, Del. Or use the money to make updates to your existing estate documents.

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32 Smart Ways to Spend $1,000 | Slide 21 of 33

Take an Early Spring Vacation

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Icelandair offers several vacation packages to the land of fire and ice that start near the $1,000-per-person mark. The Hot Springs & Northern Lights Iceland tour includes a round-trip flight, a three-night hotel stay, an evening dip in geothermal baths and a guided hunt for the northern lights. One adult could recently travel from Boston to Reykjavik in early April for $953 (prices include taxes and fees).

If you prefer a warmer destination, head to Hawaii, suggests Anne Banas, executive editor of SmarterTravel.com. Search for deals at www.applevacations.com and www.pleasantholidays.com. Recently, a couple departing from Los Angeles in mid February could fly to Honolulu and stay at the Luana Waikiki hotel for four nights for $976 per person. The price includes a rental car.

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32 Smart Ways to Spend $1,000 | Slide 22 of 33

Book an Off-Season Cruise

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Score deals on cruises for $1,000 or less per person by avoiding peak season, says Carolyn Spencer Brown, editor in chief of travel Web site Cruise Critic.

In the Caribbean, that means sailing during portions of the spring and fall. Norwegian Cruise Line recently offered a seven-day western Caribbean cruise departing in late March from New Orleans on the Norwegian Dawn for $777 per person (with two guests sharing an interior cabin); upgrade to a room with a view for $957.

Or look for Alaskan cruises in April, May or September. Recently, two adults could depart from Vancouver on Royal Caribbean’s Radiance of the Seas ship in mid May for a seven-day Alaska tour (interior cabin) for $857 per person.

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32 Smart Ways to Spend $1,000 | Slide 23 of 33

Rent an RV

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Cheaper gasoline is fueling a resurgence in RVing. Rental fees generally run $200 to $250 per night and include full insurance coverage. No special driver’s license is required. Most RV rental companies offer housekeeping packages with dishes, pots and pans, and linens, or you can bring your own.

A standard 25-foot RV rental from Cruise America sleeps five people. Factoring in rental costs and gas, you could take a seven-day trip in mid July from Charlotte, N.C., to Great Smoky Mountains National Park for about a grand. A trip around the same time from Denver to Pike’s Peak for five days costs about $860.

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Find information about rental companies and camping at GoRVing.com.

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32 Smart Ways to Spend $1,000 | Slide 24 of 33

Power Up During an Outage

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Keep the lights—and fridge, TV and sump pump—on with a portable generator. Buy a unit with an electric starter, such as a 6,500-watt model from Generac (about $899) or a 7,500-watt model from Westinghouse (about $979). They’ll provide enough juice to power most of a 2,000-square-foot house (not including central air conditioning). Look for size calculators on manufacturers’ Web sites.

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32 Smart Ways to Spend $1,000 | Slide 25 of 33

Belly Up to a Home Bar

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A bar will create a focal point for entertaining and a place to stash your stash. Pottery Barn has several options: For a traditional but simple style, check out the Metropolitan Buffet ($699); for a contemporary look, consider the Hillary Mirrored Bar ($999).

And if you want to get behind the bar to serve guests, you might like the Inwood Contemporary Bar by Coaster Home Furnishings ($699 at Amazon.com). If you have any leftover bucks, buy a couple of bar stools, bar tools or glassware.

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32 Smart Ways to Spend $1,000 | Slide 26 of 33

Let There be Natural Light

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Tubular skylights, such as the sun tunnels by Velux, will brighten a dark space, such as a windowless bathroom or walk-in closet. A tubular skylight is simpler and less expensive to install than a traditional skylight: A tube with a mirrorlike interior delivers light from a clear dome (usually acrylic) mounted on the roof to an opaque diffuser set in the ceiling. The installed cost runs from $500 to $1,000, according to www.costhelper.com.

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32 Smart Ways to Spend $1,000 | Slide 27 of 33

Spruce Up for Airbnb

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Thinking about sharing a spare bedroom or two? Start with linens. You can dress a bed in hotel-style linens (queen-size mattress pad, sheets and duvet cover, down-alternative comforter and two pillows), and provide two sets of plush cotton towels and two terry bathrobes for about $850 at The Company Store.

With the remaining money, buy a four-cup coffeemaker, a hair dryer, an iron and ironing board, and a couple of luggage racks. Update your Airbnb listing to include the new amenities and earn back your money with more bookings.

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32 Smart Ways to Spend $1,000 | Slide 28 of 33

Hire Organizing Help

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Organizers can help you set up a filing system, sort and catalog family photos, decide which possessions to keep or discard, or prepare you to move or sell your home. To find one, visit the Web site of the National Association of Professional Organizers. Many organizers charge by the hour (typically $30 to $80 per hour, according to www.costhelper.com), but some charge by the day or project.

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32 Smart Ways to Spend $1,000 | Slide 29 of 33

Join the Fight Against Ebola

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Conditions have improved in some countries, but groups on the front lines of this battle still need help.

For a list of nongovernmental agencies that are working in areas affected by the Ebola virus, go to the Web site of the Center for International Disaster Information, a part of the U.S. Agency for International Development, and click on Donate Now-Ebola.

You’ll find information on 62 organizations that focus on disasters overseas, including Doctors Without Borders (Medecins Sans Frontières) and the CDC Foundation.

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32 Smart Ways to Spend $1,000 | Slide 30 of 33

Help an Underfunded Cause

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Diseases that affect fewer than 200,000 Americans are considered rare, yet their impact can be as devastating to those affected as ailments that cut a wider swath (and attract more funding). You can help people suffering from one of 7,000 such diseases by contributing to the National Organization for Rare Disorders. It works with other groups to support research and provide information to patients and families.

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32 Smart Ways to Spend $1,000 | Slide 31 of 33

Open a Roth for Your Kid

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As with all Roth IRAs, custodial Roths are funded with after-tax money, and contributions can be withdrawn at any time, tax- and penalty-free. Say you contribute $1,000 to a Roth when a kid is 15, and he or she continues to save $1,000 each year. By age 67, the account will have hit $726,031, assuming an 8% annual return.

After age 59½, if the account has been open at least five years, withdrawals including earnings are tax- and penalty-free. Your contribution is limited to the amount the child earned during the year, up to $5,500 in 2015, but you can match the amount and let the child keep the earnings. Several firms with low fees and investment minimums, including TD Ameritrade and Charles Schwab, let you open custodial IRAs.

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32 Smart Ways to Spend $1,000 | Slide 32 of 33

Contribute to a 529 Plan

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