How To Use A Leap Year To Maximize Your Finances

Leap Year's extra day can serve as a reminder to stop and evaluate. An extra day in the year represents an opportunity to earn more money, pay off debt, or think long term about your finances.

Here are a few of the best ways you can use a Leap Year to maximize your finances.

Check In On Your Budget

It’s easy to fall into bad financial habits, especially when it comes to budgeting. With an extra day at your disposal, use it to check in on (or make!) your budget.

Review your expenses from 2023. Did your spending align with your goals and values? How is 2024 going so far? If you aren't thrilled with how you used your resources now's the time to get things into alignment.

If you haven’t done so already, download a budgeting app to keep track of your expenses. Budgeting apps easily sync with your accounts, allowing you to keep tabs on how you’re spending your money right from your phone. Spend some time this month reviewing your budget to look for an opportunity to improve your habits.

Also, take a look at recurring expenses like your car insurance or monthly subscriptions. Could you negotiate a lower rate with a different company? Or, if there’s a service you use regularly is there an annual payment option that can help you save money?

Tackle Your Debt

You can also use the extra day in a Leap Year to take on your debt. A lot of high-interest debts – like credit cards – compound daily. Making just one extra payment can help you reduce the interest that’s accumulating on any balances you owe, helping you pay off your debt faster.

If you can’t make an extra payment on February 29, you can still take action to tackle your debt. Sit down with a notebook and write everything out. Make a list of all your debts and include the total balance, minimum payment, and interest rate. 

Once you have a clear view of your situation, brainstorm your options. Can you use a 0% interest balance transfer to move debt off of a high interest credit card? Have you looked into consolidating all of your debts into a personal loan? Could you refinance one of your loans?

Check out our loan payoff calculator to see how different options affect the overall plan.

Use the extra day to consider your options and come up with a plan to reduce your debt in the months to come.

Increase Your Income

An extra day in the year means an extra day to earn money. If you don’t have a side hustle already, now is a good time to start one.

For gig workers, spend the extra day delivering meals or giving rides. If you’re a freelancer, commit to spending some time looking for new clients. And if you have a creative side hustle – like building digital products – spend the day developing a new product or optimizing ones you already offer.

If you don’t have a side hustle but work hourly, ask your boss for some extra hours. Use your extra earnings to make an extra debt payment or to work toward a savings goal.

Implement An Investment Strategy

A Leap Year can also be a good opportunity to boost your net worth. According to financial advisor Mark Hebner, Leap Year has been a historically good year for the stock market. His analysis reveals that there have been no negative returns during a Leap Year since 1940.

While historical performance isn’t always indicative of a positive future outcome, these are pretty good odds to work with. If you haven’t started investing yet this could be a good year to implement an investment strategy.

One of the easiest ways to get started is to sign up for your company’s 401(k). Not only will this help you begin investing, but employers usually provide a match as part of your compensation package. This is free money you can use to grow your net worth.

If you want to try your hand at building your own portfolio, there are a number of apps you can use to do that. Fortunately, it's never been easier to get started. You don’t need a lot of money to begin investing – you can do so with less than $100.

Review Your Goals

The extra day in a Leap Year also gives you a chance to review your financial goals – or even set new ones. This could mean adjusting how much you need to save in your emergency fund or reviewing the amount of money you need to put aside each month for retirement.

One of the easiest ways you can start making progress on your goals is to automate your savings. You can do this by designating a portion of your paycheck to go to a specific savings account every pay period.

You can also create special savings accounts by setting up designated savings buckets. Ally is one example of a bank that allows you to do this. You can allocate some of your savings toward vacation while putting the rest of it toward another goal like your emergency fund. By automating the savings process you avoid the temptation of spending it.

Think Long Term

Have you ever sat down and considered where you want to be in 10 years? 20 years? 40 years? At what age would you like to retire and what do you want your lifestyle to look like in the future?

Do you want to live in the city, in a cabin in the woods, or something in between? Do you want to travel frequently or spend time tending your garden? Do you want to work hard, play hard – or are you more relaxed?

Dream up an ideal life and then put some numbers to it. How much will this lifestyle cost and when would you like to achieve it? Understanding where you want to be in the future can make today's sacrifices a little easier to bear. So, put some time into being more strategic with your money. 

If you don’t know where to start, look into working with a Certified Financial Planner to help you come up with a plan. It can save you in the long run.

Use Your Money to Enjoy Your Life

While an extra day in a Leap Year is a great way to make extra money or work towards a financial goal, you don’t have to hustle if you don’t want to. Taking a day off to do something fun can be a powerful way to maximize your finances too.

Use the extra day to go to your favorite coffee shop and plan a dream trip or create a financial vision board. This will help you establish a ‘why’ to align with your financial goals. Doing this will keep you motivated even on days you don’t feel like working.

You can also use the day to do something nice for someone else. Plan on making a home cooked meal or take a stroll in the park.

Time is the most valuable resource we have. You can maximize your finances by spending the extra day recharging. When you’re ready to dive back into work, you’ll be refreshed to work toward your goals.