Finance Globe

U.S. financial and economic topics from several finance writers.
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What To Do With an Unexpected Lump Sum of Cash

Bag of cash

 There’s no better feeling than a lump sum of cash unexpectedly arriving in your life. This could come from a work bonus, tax refund, winning lottery ticket, or inheritance (and that’s just the start).

Before you do anything with the money, take a step back to consider the best path forward. You don’t want to make a rash decision that you’ll regret in the future. 

Here are some of the better things to do with an unexpected lump sum of cash:

  • Save it: You can’t go wrong if you decide to save the money. There are many ways to do so, ranging from a high-yield savings account to an IRA. 
  • Pay off debt: Review all your debt, along with the balance associated with each type. This can include things such as credit card balances, student loans, personal loans, and more. If you’ve received enough money to pay down or eliminate a specific type of debt, strongly consider doing so. It may not be the most exciting way to use your unexpected funds but it’ll immediately improve your financial circumstances. 
  • Invest in yourself: This takes on many forms, such as starting a business or going back to school. It’s never a mistake to bet on yourself. For example, if you receive an advanced degree, it may allow you to obtain your dream job or earn more money in your current position.

Along with the above, it’s okay to treat yourself as long as you don’t go overboard. Use a portion of the money to buy something you’ve had your eye on for a long time. Or perhaps you can use it to take a trip. You can decide how you use it. Just make sure that you don’t overspend. 

What would you do with an unexpected lump sum of cash? Have you ever found yourself in this position? Did you face any challenges? 

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Sunday, 25 September 2022

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