Chris O'Shea
According to a recent report, 71 percent of Americans purchased at least one lottery ticket within the last two years. That’s not surprising — the idea of getting a huge payday is exciting. An unexpected windfall of cash could be great, but only if you handle it correctly. And it’s not just lottery winnings we’re talking about. If you get a raise or a big bump in pay there are certain steps you should take. Here’s how to handle a big influx of cash.
Wait it Out
When you get a big, unexpected windfall of cash, you’re probably going to want to spend some of it. After all, what’s a little dent in a big wad of money? However, try to be patient. Instead of making purchases right away, list out some things you’ve been wanting to buy alongside your long-term savings goals. Make sure you have a plan for both categories before you do anything with the money. This will help you to have some fun with the money while also being smart with it.
Increase Savings
If you’re not hitting the employer match on your 401(k), now is the best time to do it. You should also increase your contributions to any other retirement vehicles or investments you have. Set this up right away, so that you’re taking care of your long-term financial health first.
Cut Out Debt
Use an influx of cash to eliminate any debts you have. Even if paying down your debts leaves you with little left of your cash bump, it’ll save you heaps of money in the long run. It’ll also help boost your credit score, which can help you financially as well.
Do One Thing: Before spending any big pay bump, be patient and think through what you really want to do.
Jean Chatzky
