What to Do with a Windfall – Lottery Luck!
Have you been lucky enough to come into a surprise chunk of change? It can be tempting to blow it all on a luxury vacation or the latest shiny tech object. But, you’ll be much better off if you use the money to improve your financial health. A few suggestions:
- Got an emergency fund? If not, stow at least some of your money in a savings account so you will have it the next time you have an unexpected car repair or other minor calamity.
- Take an inventory of your debt. Throw a good chunk of your windfall at your highest interest debt that has no early repayment penalties. The amount that you’ll save in interest payments will beat any investment by miles.
- Do you have too many installment loans? More than a few, and it decreases your credit rating. If you owe just a bit more on one installment loan, consider paying it off.
- Use a small amount of it to buy something fun. Is there a pricey restaurant you’ve been dying to try? Do you have enough to spend a couple hundred on a romantic weekend away? Spending a bit of money on an experience that you will enjoy is a better investment than buying a toy that will lose its luster in a few months.
By putting some of the money into pleasure, some into security and some into debt management, you’ll maximize the benefit from your surprise cash.