What to do with a Financial Windfall

There is no question about whether a financial windfall is a good thing or not. It, of course, is a great thing. What does come into question is what to do with it when you get it. By following a few simple steps, you can really make that windfall work for you.

*Bills. Start by taking care of your basic living expenses like utilities, insurance and other bills that are important. Buy groceries if you need them. The point is to take of those things before spending any of the money on frivolous things. You will have to maintain you living expenses again after your windfall money is gone. By using some of that windfall to pay those current (or past due) bills, you can save that much out your normal income. One suggestion is to pay things like car insurance for six months or a year. Pay whatever bills you can, ahead of time, and that way they will not be a concern for awhile after your windfall is gone.

*Home. Step two is to make any necessary repairs to your home, that you can afford with part of your windfall. Take care of your home since it will be there for you after your windfall is dipleated. Fix faulty wiring, plumbing, paint, or whatever kinds of repairs need completed. Ideally, if your financial windfall is large enough, you might consider buying a home. The purchase of your own home is simply peace of mind that you will have a safe place to hang your hat no matter what happens.

*Vehicle. Step three is to make necessary repairs to your vehicle and also perform maintenance on it (have it serviced). Again, if your windfall is large enough, you might consider purchasing a reliable vehicle. Either way, make sure you have a vehicle that is running properly and is reliable.

*Savings. The fourth step is to take at least half of what you have left from your financial windfall and put it into an interest bearing savings account. This is important even if you do not have a regular bank account. By putting money into a savings account, you are preparing for any emergencies that could come up. If you are lucky enough to never have to dip into that savings account, then you could end up with quite a nest egg for college (for yourself or your kids) or for retirement.

*Fun. So now you have done the responsible thing and took care of business, it is finally time to have some fun with some of that money. After all, what is the fun of getting a financial windfall if you cannot enjoy some it? Think of it as a reward for being responsible and taking care of the not so fun stuff. Go on a trip, buy that item that you have had your eye on for the last six months, but knew you could not afford.

When you get a financial windfall, it is so easy to be so excited that you want to run out and start spending it. The wise thing to do is stop and think before you act. There are always things you should consider first like paying off bills and putting money into a savings account.