When people are lucky enough to come into a large monetary windfall, they often have no idea what they should do with it. Some people go nuts and spend it all within a short period of time while others hold onto it tight-fistedly as if they are afraid that it will disappear as soon as they blink. The trick is to find a happy medium between those two extremes so that you can have some fun today while still saving money for your future. Here are some tips on how to correctly handle a large monetary windfall and avoid wasting the money on unnecessary purchases.
Put Most Aside For Saving
When receiving any large amount of money, it is important to put a portion of it away to be saved for the future. If it is placed into savings right away, you will not miss it because you didn’t really have it to spend. Exhibit discipline and do not touch the money that you have placed into your savings account unless it is a reason already predetermined by your spending plan. Putting most of the money from a windfall payment into savings allows you to boost the balance of your savings account significantly without having to expend much effort.
Pay Off Debt
If you are carrying any debt, you should use a portion of your monetary windfall to pay it off. Debt can be very expensive to hold on to, especially credit card debt and any other debt with a high interest rate. Hopefully, your debt levels are not so large that paying them off would require the entire amount of your windfall payment. If so, put about half of the amount towards establishing an emergency fund and dedicate most of the rest to paying down your debt.
Have Some Fun
It is also important for you to take a small portion of the money that you receive and spend it on having some fun for yourself. For example, you may choose to click on a promo that says, “possibly the best live casino offer we’ve ever seen…” and invest a few dollars in the games. Or there may be an inexpensive concert coming to town that you would like to attend. It is important to do something good for yourself every once in a while to reward yourself for a job well done and curb the temptation of dipping into your savings account for unnecessary purchases.
Get Your FREE Book Now
Enter your name and email to get the "365 Day Money Challenge" straight to your inbox.