What to Do with a Sudden Windfall

Being lucky enough to come into some money all of a sudden is exciting, but it can also make you feel anxious. Suddenly having more money than you’re used to, whether it’s hundreds, thousands, or hundreds of thousands, can be a bit of a shock. You might feel a lot of things and be uncertain about what to do with your newfound fortune too. If you’re not sure where to start, there are a few things you could do to make sure you use your money wisely. Whether you’ve won, inherited, or acquired your money some other way, here are some steps to take.

Pay Off Debts

The first thing that many people will want to do if they come into some money is pay off some debts. Paying your debts can give you a sense of financial freedom, especially if you’re finding it difficult to meet the necessary payments. You might have credit card debts, loans, a mortgage, or other debts that you want to pay off. However, not every debt should be your first priority if you get a windfall. Putting some money toward your mortgage might help you pay it off sooner, but won’t necessarily help you pay it all straight away, so you have to consider if it’s the right choice.

Improve Your Life

Making long-term improvements to your life is a good idea if you’ve got some extra cash. This could mean doing a number of things that help to make circumstances better for you. You might take a look at some options at Edmunds and get yourself a new car so you can get around more easily. You could put the money toward a down payment on your own home. Or maybe you could use the money for education, whether you go to college or pursue some kind of qualification or course.

Start Some Savings

Do you have any savings? If you haven’t got any money saved, now is your chance to make sure you have something put aside. The first thing that you should do is ensure you have an emergency fund. An emergency fund gives you a financial cushion that helps to protect you if you ever have any unexpected expenses. You can feel a lot more financially stable if you know you have that money there. If you already have an emergency fund, you might want to consider saving for something specific, whether it’s buying a house, traveling, or retirement.

Use Some for Fun

Using your money for practical things is a good start, but there’s no rule that says you can’t use it for fun too. While you might not want to spend all of your money on fun and frivolity, you can definitely use some of it to treat yourself and maybe some other people too. You could use your money to go on a trip, buy yourself something you’ve been wishing for, or just go out for a good meal or night out.

If you get a sudden windfall, spend some time thinking of what to do with it. You might want to see a financial advisor if it’s a significant amount.