You sell a valuable collector’s item. You receive an inheritance. You land a major account at work, leading to an impressive bonus. Your trip to Vegas results in a surprise at the slot machines. Whatever the reason, there are times in life when we might receive a sudden windfall of cash. It can be tempting to take off to Aruba or upgrade to a fancier vehicle, but before you let that money burn a hole in your pocket, stop to consider how it can help you build an even more secure future.
Pay off debts. No, this isn’t the most fun thing you could do with a windfall of cash, but because debt can follow you for years, paying it off actually buys you years of happiness. Just imagine how great it would feel to retire free of all debts.
Set up an emergency fund. No matter how comfortable you are, everyone needs some liquid assets in the bank. In the event of an emergency, you won’t be tempted to borrow and rack up debt, and you won’t be forced to sell something valuable or downsize your lifestyle. Stashing the money in savings doesn’t sound as fun as a cruise, but you will probably thank yourself one day.
Invest in your business. If you’re self employed or own a business, consider how a sudden windfall could be put to use. Upgraded equipment or an advertising blitz could result in higher net income for months or even years after the initial investment. This could be your chance to grow.
Pad your nest egg. Even if you’re already building a comfortable nest egg for the future, you really can’t be too careful about retirement. Putting the money into your retirement fund (or opening a new account) can help you ensure a more comfortable income in your later years.
Earn a valuable tax deduction. Donating the money to charity can help you to achieve a personal goal, but also help you earn an income tax deduction.
Most importantly, remember to research before making a decision about any unexpected cash. Give us a call, and we can help you identify your options, and decide which one holds the most benefit for you.