Unexpected Income – What To Do With It

If you have recently run into a situation where you have some unexpected income, you need to do some well-thought-out planning on what you are going to do with it before you start spending.

There are some questions that you should ask yourself before planning out where the money will be spent.

Planning with your unexpected income

Here are some tips that you can use as a guideline to help you use the money wisely.

1. What are your financial goals?

If you don’t have any financial goals, now is the best time to sit down and figure some out. Even if they are vague at this point, start writing them out and they may become more clear as you go along. The important thing is to set up some type of pool to work towards so that you have some kind of financial planning set in place for the future.

If you already have a goal set in place, you should take a look at the unexpected income you have received and how it would best be used to reach that goal. You may have an investment, an education fund for your children, a savings account or an emergency fund that could use some extra money.

Look at your financial goals and determine which ones need the money the most. If you only have $500, for instance, set aside as an emergency fund, you may want to put some of your unexpected income into that savings pool. Determine where the money is needed the most and then add to that goal.

2. Are there prior intentions for the money?

If this money was given to you as a gift then you need to use the money the way it was intended. Your honor and integrity are on the line and you need to fulfill the wishes of the giver. If that gift had no intentions, you should still analyze what it would be best spent on to make the giver happy. It would be nice to let the bearer of the gift know that you spent the money on something they would appreciate.

If you knew the money was coming and had your heart set on spending it in one direction, sit back and take a deep breath and reanalyze the situation. If the money could be better spent elsewhere, it’s okay to change your mind and put the money where it’s most needed.

3. Pay it forward

If you have received a large amount of money unexpectedly it may be a good time to start thinking of others as well. Your fortunate situation can be used to help another person, perhaps a family member that could use a helping hand as well. You don’t have to give all of your money away but giving a small portion to help another that is struggling financially would be a nice gesture of goodwill.

If you have had the good fortune of receiving some unexpected income, don’t waste the opportunity to put the money to good use. Tuck the money away in a safe spot where you can’t access it until you have made a final decision about where it will be spent.