How to Manage a Financial Windfall

There is no better feeling than coming into money you weren’t expecting. Whether it is a check or cash in the form of a gift or you find luck with a winning lottery ticket, knowing how to manage extra cash is important.

Put the Money in Savings

The most obvious thing to do when you come into extra money is to put it in savings. Make sure that you are getting the most of your savings account by comparing interest rates and finding an account with a low-to-no monthly maintenance fee.

Pay Off Debt

Another great thing to do with a financial windfall, whether it be a small amount from a lottery ticket or a sizable inheritance, is pay off debt. If you’ve struggled with debt, you know how crippling it can be. Using a financial windfall to pay off your debt is always a great idea.

Buy Something You’ve Been Meaning to Buy

Maybe you’ve been meaning to fix something in your home, buy yourself some new clothes or get something done on your car. Investing the money back into yourself is never a bad idea. If you have some cash left over after you make your long-awaited purchases, you can always toss it in savings or pay off a little debt.

Consider a Retirement Fund

If you come into a sizable amount of money, you may consider placing it in a 401K or Roth IRA. Most of these types of accounts have a $1,000 initial deposit minimum. However, any cash you put into a retirement fund is not taxed until you withdraw it from the 401K or IRA account.

Nourish Your Current Investments

If you are currently investing money in the stock market, have a retirement account or even own a home, you can use financial windfalls to nourish your investments. Add some more money to your retirement account or finally get the remodel done in the kitchen. Whatever the case may be, taking your windfall and contributing to your current investments is never a bad idea.

Distribute the Money

If you’re having a hard time deciding what you should do with your windfall, you can always distribute it across some of your accounts. For instance, maybe you have some debt you’d like to pay down as well as investments and a retirement account to contribute to. If the windfall is sizable enough, you may be able to distribute the cash across all of your accounts (or accounts you are trying to grow).

Conclusion

Making the decision about what to do with a financial windfall can be difficult. But, no matter how much money you come into, making a solid financial plan for the extra cash is necessary. Oftentimes, individuals who win a lot of money on a lotto ticket or come into an inheritance waste the cash on unnecessary things. Don’t let that happen to you. Have a plan when it comes to how to manage your financial windfall.

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How to Manage a Financial Windfall

There is no better feeling than coming into money you weren’t expecting. Whether it is a check or cash in the form of a gift or you find luck with a winning lottery ticket, knowing how to manage extra cash is important.

Put the Money in Savings

The most obvious thing to do when you come into extra money is to put it in savings. Make sure that you are getting the most of your savings account by comparing interest rates and finding an account with a low-to-no monthly maintenance fee.

Pay Off Debt

Another great thing to do with a financial windfall, whether it be a small amount from a lottery ticket or a sizable inheritance, is pay off debt. If you’ve struggled with debt, you know how crippling it can be. Using a financial windfall to pay off your debt is always a great idea.

Buy Something You’ve Been Meaning to Buy

Maybe you’ve been meaning to fix something in your home, buy yourself some new clothes or get something done on your car. Investing the money back into yourself is never a bad idea. If you have some cash left over after you make your long-awaited purchases, you can always toss it in savings or pay off a little debt.

Consider a Retirement Fund

If you come into a sizable amount of money, you may consider placing it in a 401K or Roth IRA. Most of these types of accounts have a $1,000 initial deposit minimum. However, any cash you put into a retirement fund is not taxed until you withdraw it from the 401K or IRA account.

Nourish Your Current Investments

If you are currently investing money in the stock market, have a retirement account or even own a home, you can use financial windfalls to nourish your investments. Add some more money to your retirement account or finally get the remodel done in the kitchen. Whatever the case may be, taking your windfall and contributing to your current investments is never a bad idea.

Distribute the Money

If you’re having a hard time deciding what you should do with your windfall, you can always distribute it across some of your accounts. For instance, maybe you have some debt you’d like to pay down as well as investments and a retirement account to contribute to. If the windfall is sizable enough, you may be able to distribute the cash across all of your accounts (or accounts you are trying to grow).

Conclusion

Making the decision about what to do with a financial windfall can be difficult. But, no matter how much money you come into, making a solid financial plan for the extra cash is necessary. Oftentimes, individuals who win a lot of money on a lotto ticket or come into an inheritance waste the cash on unnecessary things. Don’t let that happen to you. Have a plan when it comes to how to manage your financial windfall.

Enjoy Plunged in Debt?

Pid

Subscribe to get our latest content by email.

Powered by ConvertKit

Speak Your Mind

*