MONEY

What to do with $1,000 now

After 5 years of self-imposed austerity, now is the time to think about upgrading rather than cutting back. When it comes to home, travel, finances, or your career, the key is still to find the best value for your money.

  • Spruce up your home

    As home prices rise — they were up more than 10% this year — small upgrades can have a big impact on both resale value and your own enjoyment. Try these:

    Add a fresh coat of color. Nothing spruces up an interior like a paint job, says designer Mary Liebhold of Durham, N.C.

    Research shows that certain colors in certain rooms can elevate your mood. Try a soft yellow in the living room, a cooling gray in the kitchen, and an airy cream in small spaces like the bathroom. Budget $1,000 for the main floor of a house, or about $200 a room.

    Install hardwood floors. “They really up the chances of your house selling faster,” says California realtor Maria Jeantet. Of course, it’s pricey to deck your whole house with new flooring, but Debbie Gartner, a flooring specialist in Westchester County, N.Y., says that adding hardwood to key rooms can make a big difference.

    A 250-square-foot living room near your front entrance, for example, is a good choice. You can find quality interlocking walnut flooring at a big-box store like Lowe’s for $3.89 a square foot–or $900 for the living room.

    Related: It pays to keep up with the Joneses

    Go with granite. Granite countertops add value and almost never need replacing, says real estate consultant David Rounick. Think beyond kitchens: Countertops for bathroom vanities come precut and ready for easy installation; a nice single-sink piece can run about $250, while a dual-sink unit goes for about $700 to $950 before installation.

  • Be energy efficient

    Another key home upgrade: optimizing your heating, cooling and lighting to help counter rising energy costs. These purchases can help cut your bills:

    LED bulbs. In January, new energy standards spark the phaseout of traditional 60-watt light bulbs (higher-watt models are already vanishing). LEDs are the best substitute; they use less juice than fluorescents and last up to 25 years.

    Prices start at $10 but go as high as $50 for LEDs you can dim and fully enclose in a fixture. “The more features, the more expensive they are,” says Mark Costigliola of the EarthLED online store.

    The typical home has more than 40 light sockets, says the Energy Department, so installing LEDs could easily cost $1,000.

    The savings: $3.80 in electricity per bulb per year, plus fewer replacements. You’d recoup the cost of an $18 Philips A19 11-watt LED, as bright as an old 60-watt, in four years.

    A professional audit. While DIY energy audits are a good start, a pro’s more exhaustive audit can save you 30% in annual energy costs, reports the nonprofit Alliance to Save Energy.

    You can get a full analysis — including a sophisticated test to pinpoint money-wasting air leaks — for $500 to $700, says Dan Chiras, director of the Evergreen Institute green-building instruction firm. A contractor can seal leaks for around $300, he says. “That’s the most important thing you can do.”

    A smart thermostat. Programmable thermostats can save as much as $180 a year in heating and cooling costs — if you can figure out how to set them. The hassle-free choice is the Nest ($249 apiece). All you have to do is dial the temperature you like, and the units will learn your behavior in days. Installation costs up to $250 for the first unit, plus up to $50 for each additional one; adding new wiring could cost $100 to $300 more.

    “This is the direction the technology is moving in,” says Siobhan Spain of the nonprofit Center on Sustainable Communities.

  • Prepare for emergencies

    Don’t forget to prepare for the worst when improving your home. There have been nearly 30 weather disasters causing at least $1 billion in damages in the U.S. over the past three years — more than in the entire decade of the 1980s.

    These disasters almost always come with a loss of electricity, as people who suffered through Superstorm Sandy can attest. At least portable generators are a lot more affordable than just a few years ago.

    Related: Tips on homeowners insurance

    Matthew Stein, author of the guide When Disaster Strikes, recommends the Honda EU2000i ($999). The quiet unit generates enough power for a refrigerator, computer, and some lights. And with a reduced load, it can run for nine hours on just a single gallon of gas.

  • Upgrade your portfolio

    Take a flier on dirt-cheap stocks. Companies with low share prices tend to be beaten-down values. They’re usually smaller than their peers too — and smaller-cap stocks, on average, beat larger ones. “The low valuations and small-cap effect work in your favor,” says Morningstar analyst John Rekenthaler.

    These stocks sport lower price/earnings ratios than the S&P 500, plus double-digit earnings growth:

    Xerox
    XEROX CORP. XRX 0.0338%

    What it does: Sells copiers while shifting into tech services.
    Price/Earnings: 9.2
    Earnings growth rate: 10%

    LSI

    What it does: Designs chips and software for data centers and other applications.
    Price/Earnings: 11.7
    Earnings growth rate: 15.5%

    Contemplate the next big thing. Forget chart reading or day trading. The classic route to investment success is finding companies on the leading edge of innovation. Here are three picks by the father-son team Sam and Joshua Stewart from their holdings in the Wasatch World Innovators Fund, which has beaten 99% of its peers over the past five years:

    Vocera Communications
    VOCERA COMMUNICATI COM USD0.0003 VCRA 1.3873%

    What it does: Provides voice, text, and other mobile communications for doctors and nurses.
    Price/Earnings: 111

    WisdomTree Investments
    WISDOMTREE INVESTMENTS INC WETF 2.6616%

    What it does: Manages exchange-traded funds that invest in stocks, bonds, and alternative investments.
    Price/Earnings: 26

    Activision Blizzard ACTIVISION BLIZZARD INC. ATVI 1.9123%
    What it does: Designs multiplatform videogames, including the Call of Duty franchise.
    Price/Earnings: 17

  • Save more for retirement

    If you’re 50 or older, you can contribute an extra $1,000 a year to an IRA or a Roth IRA, meaning you’re free to sock away a total of $6,500 in these tax-advantaged accounts this year. (You can also put an extra $5,500 in your 401(k).)

    While catch-up provisions have been around for years, few people actually take advantage of them; at Fidelity only about one in 10 eligible IRA account holders saved the full amount last year. That’s a mistake.

    Related: How much do you need for retirement?

    Assuming a 6% annual return, that extra $16,000 in savings from age 50 to 65 will be worth $27,200 at retirement.

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