Comments on: 7 prudent things to do with small windfalls

By: mario@bathroom vanity sink tops

mario@bathroom vanity sink tops — Sat, 05 Sep 2009 18:10:10 +0000

Very smart ideas. Less upbeat times can also be put to use. It’s just a question of making the choice of a purpose adapted to the circumstances at hand.

Lulls are certainly not the time to have no purpose.

By: reverend j'iam

reverend j'iam — Thu, 27 Sep 2007 02:16:54 +0000

gift 10% to a favourite charity, someone in need or to someone you love. If gifting to an individual remember to verbally “offer the gift” and make sure the recipiant accepts it and you are then guaranteed another return on that gift (as you sow, so will you reap multiplied). Of course gifting to established charities automatically ensures the return.

Kindest regards,

J’iam (reverendjiam@hotmail.com)

By: Patricia

Patricia — Wed, 19 Sep 2007 15:06:17 +0000

On the parking item. If a saving account is not the best and I do have credit card balances at 25% or more.

By: Virginia

Virginia — Tue, 18 Sep 2007 03:02:59 +0000

Good job K! There’s absolutely nothing wrong with wearing 5 year old clothes or not getting your haircut every 6 weeks. Replace your clothes as you need to, when they start getting holes in them. The kitchen is a much better investment.

As for the 7 prudent things…the “park it” method should only be used if you are getting a good return on your savings, ie, your interest earned is greater than inflation the taxes you have to pay on the interest. Otherwise, your money is becoming worth less and less as it sits there. If you’re paying 25% on your credit card balance and only earning 5% (or less) in a savings account, then putting your spare change in savings doesn’t make a whole lot of fiscal sense, or cents…

By: Aimee

Aimee — Sat, 15 Sep 2007 19:16:32 +0000

I think the debt paydown is great, that’s what we do with every windfall we get. Once we are out of debt we will use it them for bigger items, vacations, or maybe do a half and half thing (invest half, spend half).

By: K

Sat, 15 Sep 2007 18:44:14 +0000

2007 has been good to me (OK, except for that internet matchmaking phase I went through). I had several small unexpected windfalls. 10 years ago I would have gone on a shopping spree. With these windfalls I re-did my kitchen. Not like on HGTV mind you – no new appliances here. I had the textured ceiling taken down ($600) and replaced the worn flooring ($1300) but did everything else myself, from painting to refinishing cabinets to replacing electrical sockets and rotten window trim. It needed it AND was an investment. I will replace my one countertop and the sink in about a year when I have saved for it.

The majority of the rest of the money went into emergency savings ($6000) to make monthly interest babies.

With the other I paid down credit card debt to a very manageable amount and now have an aggressive payoff plan for the little that remains. In 4 months I will be debt-free (except for the mortgage and HELOC), I have 4 months of living expenses in the bank, and I have a gorgeous kitchen which I enjoy.

Yes, I am wearing 5 year old clothing and shoes and have not had a haircut in 6 months but hey – can you say “telecommuter?”

By: Katherine

Katherine — Fri, 14 Sep 2007 17:41:41 +0000

I like all the above suggestions, but I also like the idea of having fun with your money (you know what they say about all work and no play).

As a compromise, you could decide to spend a certain amount of your windfall (10%, maybe?) on something fun. Even that small amount will probably give you more psychological incentive to work towards that bonus than spending 100% of it on boring (but prudent) things.

By: Matt Hutter

Matt Hutter — Fri, 14 Sep 2007 14:35:31 +0000

I wrote about unexpected cash windfalls a couple months ago and unfortunately most Americans make an impulse buy with the money (and spend it on the world’s worst investment – a car!) or they treat it like “bonus money” and view it as outside of their normal spending constraints and purchase something they shouldn’t.

By: megatron ninja

megatron ninja — Fri, 14 Sep 2007 14:28:08 +0000

When a lottery win fell into my lap I splurged. I got it out of my system. I didn’t go out and buy new cars or anything like big like that. Just a new Bigsreen and a laptop. Then I paid off my student loans, gave family 10% and 10% tithing. Then an emergeny fund was established and I invested the rest. That was two years ago and I have about 60% of the orignal amount in Saving’s CD’s and stocks. I hope to buy a house in a year. I know others that have won and are now the same finaicially before they won…

By: -m

-m — Fri, 14 Sep 2007 02:55:03 +0000

Very timely article. I also am thinking on what to do with my ‘windfall’.

From all I have read paying off as much high interest debt as possible is a sound move. Although my Aunt always said that when you get a few thousand dollars (ie a bonus) it is special and you should do something significant with it. We will always have debt (not my plan just a modern proverb)…

I had planned to do some home improvements (build a patio) but now I think a better move would be to get my wife some life insurance, I am already covered. Getting it early will assure we are locked into a low payment. Some day we may thank our foresight.

My plan at this point is to divide my sum into 3 parts. One to pay off debt, one to invest in some way (savings acct or mutual fund) and third to secure life insurance.

Keep up the great work on this blog and thanks to everyone who leaves comments to enhance the articles.

-m