For no apparent reason other than the planetary systems were correctly aligned or some “karma” had returned in your favour, you find yourself with a bunch of money.
Suddenly, choices rip through your mind faster than Dr Who’s time travel as does the subsequent doubt reminding you off past poor decisions.
What to do?
Well you have three options;
1. Spend it
The first option is the easiest and less confronting. In fact spending it can actually be comfortable (if you’re already conversant with spontaneous spending, that is).
Spending a windfall isn’t always bad though and sometimes it can actually be the best alternative. If you’ve been saving and scraping for [insert the item here] then using some of your windfall to purchase it is great. Don’t listen to all the experts who give financial advice bully you into saving it.
Money is to be enjoyed as much as it is to be used wisely. Consider this: too much frugality and the one and only life you have becomes boring. Too much spending and your life becomes hard work. Somewhere in the middle is a compromise that satisfies us.
2. Invest It
Make your windfall work for you. Find some investments that you can pour some, or all, of your windfall into. This could be reducing your high-charging credit cards or other personal loans. Pay off more of your mortgage. Buy some shares or invest in upcoming companies. Use it as a deposit toward some land or another piece of property.
Better still, use it as capital for that business you always dreamed about having. Investing your money can be as exciting as spending it if you be creative.
3. Save It
Now this is the least interesting option which is why I saved it for last. When we receive a windfall of any sort, we’re usually wired to do something with it. However, the best option may be just to hold onto it for another time. Repress the desires to spend or invest and place it in a high interest bank account until you’ve had time to process your thoughts.
This windfall may even be the start of your emergency fund that you had always hoped for.
Whatever you choose to do with your windfall, consider each of these three options first. Find which one suits your needs at the moment and then feel empowered to act on your choice knowing that you made the best decision.