There is a particular daydream that almost everyone on the planet has indulged in: the windfall daydream.
It’s such an attractive thing to imagine. Life changed overnight; an influx of cash that doesn’t have to specifically be worked for; a new dimension in the management of your family finances. Most of us will have, at some point, imagined what we’d do if we won the lottery (would two houses in Florida be too much or quite sensible given how pleasant the weather is there?); and a windfall is a chance to really live out such a scenario.
Considering the viable sources of windfalls
Of course, it doesn’t have to be a lottery — or lottery-esque numbers — to constitute a windfall. Essentially, a windfall is a lump sum that is usually unconnected to your normal occupation. So that could mean a lottery win, but it could also mean an inheritance, a payout after you were involved in a car or truck accident and sort additional details on how to obtain recompense, or any unexpectedly profitable day on the stock market.
Whatever the source of your funds, you now have your windfall. Does this mean you should abandon your thrifty ways forever? And what should you actually do with this sudden arrival of cash? When presented with a scenario you’ve dreamt about, it can be surprisingly tough to actually implement a plan of action.
Securing your future
If you find yourself in the situation where you have a windfall to do with as you please, by far the more important step is to secure your future as much as you can. How do you do that? Simple— get rid of debt, and especially if you went into debt to deal with the cause of the windfall; for example, if you paid for medical treatment after a car or truck accident.
So for both thrifty and non-thrifty people alike, settling debt is a key component of making the most of a windfall. That debt is holding you back, and there’s literally no scenario where ridding yourself of any debt you are carrying wouldn’t be a positive.
The next steps
With debt gone, things are less clear cut, and it’s tough to choose your next path. However, it is worth remembering that one of the best ways to use windfalls is to… act like you didn’t actually receive a windfall. Take the money you have and save it, make a few improvements to your home if needed, but otherwise carry on as normal. Keep being thrifty; keep being careful with your cash and saving money where you can; and — arguably most importantly — stick to your existing financial plans for the near future.
This is absolutely the best way of making the most of your windfall. Sure, take a little cash to have some fun with if you must, but mostly, just keep doing what you have been doing. You can use your windfall funds if and when needed, and the rest of the time, just enjoy the feeling of security knowing that the additional funds are there if you need them in future.
Wait for the opportunity; don’t seek it
Being circumspect and waiting for an opportunity (or necessity) to present itself is far preferable to actively seeking something to spend your windfall on. Events, needs, and possibilities will eventually present themselves naturally, so for thrifty people, setting the majority of your windfall aside for such eventualities is likely to be the best decision for you.