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What I Would Do With a Windfall

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I will admit that I have spent some time daydreaming about what I would do with millions of dollars.  It’s fun to just sit back and think about how easily my husband and I could live off the interest of our investments for the rest of our lives.  But I haven’t given as much thought to windfalls that we actually may have to handle.  What if we were just given $500?  How about if we sold something for $5000?  What would we do if we inherited $50,000 or more?  In short, would I handle a windfall any differently depending on the amount?

What Would I Do with an Extra $500?

We do sometimes have $500 or more leftover at the end of the month if my blogging income or my husband’s sports officiating income was higher than expected.  We split up any monthly extra between multiple accounts.  Specifically, we divide it between the Emergency Fund (25%), the Extra Cash for Investments account (35%), the Vacation account (20%), and our two individual Fun Money accounts (10% each).

By splitting it up between savings and entertainment, we figure we get to enjoy the best of both worlds.  This also drives us to earn extra money as often as possible since we enjoy watching the Vacation account grow.  Whenever it hits beyond the $1000 mark, we start thinking up our next big trip.

What Would I Do with an Extra $5000?

We haven’t ever had $5000 just leftover at the end of a month.  We’ve Craigslisted our old car for $5000, but we used it as a down payment on our new one.  My in-laws gave us the rest of my husband’s college fund, but we used it along with our own cash as a down payment for our home.  If we were just handed $5000, I bet we would place it directly into our Emergency Fund while we thought about it.  It would then either get divided up like our normal monthly extra or we may just put it towards our mortgage.

What Would I Do with an Extra $50,000?

If we ever came across $50,000 or more via an inheritance or a home sale, we’d probably have to split it up just because I would want to pay off the house and my husband would want to invest it.  We only have about $64,000 left on our mortgage and I crave the feeling of being completely debt free.  My husband loves the fact that stocks and mutual funds are comparably super cheap right now and would drool over being able to invest even more so we can sell higher later.  In short, we’d argue about how to properly use the money in responsible ways and would ultimately split it 50/50 between the mortgage and our investment account.  Compromise keeps us happy.

What would you do with windfalls?  Would you do something differently with a smaller amount than you would with a larger one?  What?

{ 12 comments, please add your thoughts now! }

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12 Responses to “What I Would Do With a Windfall”

  1. STRONGside says:

    I also find myself dreaming about how easily my wife and I could live off of even $2 Million for the rest of our lives.

    However, more practically, I think if I were to inherit $50,000 I would also take about 60% and put it towards our home, then put 30% towards investments, and leave the remaining 10% to finish off our adoption fund!!

  2. Dave says:

    90% Debt/Investments. 10% Vegas. You only live once.

  3. STRONGside says:

    Thank you Crystal!

  4. David S says:

    I simply take 50% and place it into the emergency account (Nicknamed the Payday Loan account) then look at the list of items that we have been saving for and divide it among those (this list includes paying off the mortgage early).

  5. It’s easy to get caught up in the “what if’s”, and it is fun to think about. But remember that any windfall you receive is only going to amplify the exact same spending habits you currently have. If currently you take an extra $100 and spend it, than you will likely due the same with a larger amount. However if you are like the author and already allocate extra funds towards predetermined categories, than any windfall will likely be handled in a wise and responsible way. Remember money doesn’t bring with it the ability to handle it, those lessons are learned well in advance.

    • Surewhitey says:

      Not quite true. We’ve had a “windfall” of great jobs here in SoCal and after 4.5 years, we’re taking off for a 2+ year volunteering trip to Mexico. If it works out to our liking, we’re staying longer.

      We’ve stayed in a simplified life even though we could have spent like drunken sailors…depends on your discipline.

  6. Shirley says:

    We did receive an inheiritance (10k) from a family friend and after hosting a family gathering in his honor, the remainder went into investments.

    If we ever came into a really large windfall (like millions in the lottery) I’m sure we would be sharing it with our grown children in one way or another and also boosting our emergency savings. Since we are quite content with our simple lifestyle as it is right now, I doubt that it would change much, other than to perhaps help friends in need and increase our charitable donations.

  7. HKenkins says:

    what if you have a extra 1700 ..i had it a draw for a few years at my parents house..i already have my saving acct for rainy days …the 1700 accumulated from work bonus that i had planned on doing something fun with just nevr picked something to do ….and my debt is all covered ….wondering if i should put it in a CD til i figure it out ?

  8. skylog says:

    some split between savings/investments/bills with about 10% towards something fun for smaller amounts. for large amounts it would be similar, but it would take some more thought. there would almost certainly be less “fun” in that case.


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