Wall Street sign in New York City
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Whether you inherited some cash or got a hefty tax refund, coming into a bit of extra money can feel pretty nice. But what are you supposed to do with the windfall?

When it comes to investing $10,000, you have plenty of options.

The right one for you may be different than what is best for someone else, but here are some great financial decisions to consider when investing your newfound cash.

1. Get out of debt

If debt is weighing you down and keeping you from achieving financial freedom, now is the time to pay it off or pare it down. Making minimum payments on your credit cards can keep you in debt longer and cost you more in interest. Using a hefty chunk of your cash windfall to reduce debt can free you up from some financial obligations — and free up cash flow.

Getting out of debt allows you to put your money into the things that matter most, whether that’s saving for retirement and other financial goals or taking time to travel. Owing less each month also frees up your budget so your bills aren’t so constraining.

2. Launch your own business

If you’ve been going to a job that you don’t love, you now have the cash needed to get a new business off the ground and start working for yourself. Starting your own business may have been a far-off dream, but with an extra $10,000 in seed money, you have working capital to do just that.

Constructing your website, prospecting for clients or customers and building your brand takes time and money. If you were hesitant to take the leap before your windfall, you can breathe a little easier now. Quality is important to people who want to buy what you have to sell, so make it count.

If you’re not quite ready to launch your side-hustle into a full-time job, you can still invest in yourself. Think about taking some courses for certification or going back to school for a degree in your desired field. It may be what you need to jump-start your career or business.

3. Invest in the stock market

Investing in stocks is a good way to build long-term wealth. You have your pick of individual stocks, mutual funds run by professional stock pickers or low-cost index funds that track broad stock gauges like the Standard & Poor’s 500. Stocks are an option for pretty much everybody, from expert stock pickers to people that have never looked at the market.

To get started, you can open a brokerage account or set up an account through a robo-adviser to do the hard work for you. Your investing time frame, risk tolerance and expertise will determine your choice, and the right answer is the one that’s right for you. There are many different types of investment accounts, including taxable brokerage accounts and traditional or Roth IRAs, to name a few. In short, you have your choice of accounts, who manages your money and the type of investments you want your money to go towards.

Investing in the stock market, however, is a long-term commitment. Some experts say you shouldn’t put money into the stock market if you will need to access the cash within five years, as stock prices are volatile in the short term and can fall in value. You’ll need to accept the periodic fluctuations and market dips while also tweaking your portfolio every so often. If you’re unsure about how to make those changes, you can consult a financial adviser or planner.

4. Open a high-yield savings account

High-yield savings accounts or money market accounts tend to have a much higher interest rate than regular savings accounts. For example, while the average national interest rate on a savings account is just 0.10 percent, many banks offer much higher APYs.

The more you have to put into a high-yield savings account, the more your interest grows. Interest you earn on $10,000 in the average savings account paying 0.10% would be $10 per year, vs. $250 in interest in the higher-yielding account paying 2.5 percent.

Not all banks and lenders have the same benefits, though. See which ones have fees or minimum account balances you may not be able to meet before signing up. The last thing you want is for your money and interest to disappear due to unexpected costs from fees.

5. Save for your family

If you have children, opening a 529 college savings plan can help you pay tuition bills and give your kids peace of mind when they head off to college.

While contributions to a 529 plan aren’t tax-deductible, your earnings are not taxed. Withdrawals are tax-free, as long as they are for education-related expenses.

That means whatever your cash earns while growing in the 529 plan doesn’t get eaten up by taxes.

If you don’t want to limit your children’s post-secondary education, you may want to consider setting up a custodial or Coverdell account instead. You can save for your child’s future without limiting them to only a college fund.

Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.