What to do with a windfall

March 24, 2009

in money,paying off debt,savings,spending

Yesterday we got a check in the mail for over $2,000. I was expecting it, so I had budgeted for it, but we also received a $30 check and $150 for selling a bedroom set we no longer need.

In the past I would have jumped up and down, and then immediately squandered the $150 in cash, the $30 check would have been eaten by the checking account, and the $2000+ would have caught us up on bills or paid off some debt (so I could go out and spend it again!).

I still jumped up and down, but then I immediately planned where it would go.

Here’s what we did with our mini-windfall.

$30 check: cashed for allowances

$150 in cash: being used for our expenses for the next 10 days (this is also a way for us to try a cash only diet, the debit cards have been put away)

$2200 check:

  • $750 to swingset for the kids
  • $1000 to debt repayment
  • $500 to Emergency Savings (I padded this so we would have a nice round number)

I had originally planned to use the whole check to put towards debt, but I feel like this was a good balance. The swingset was much cheaper than we originally thought it would be (which is why it was purchased now), and will provide the kids with hours of play which means more quiet and time for the hubby and I to get stuff done. Of course we have to a lot of work to do to get the yard ready, and put it together, but it’s good exercise.

More and more I find that seeking balance with how we use our money leads to feeling positive about where we are headed. Cutting out EVERYTHING doesn’t work, though it does provide a good starting point to see how much we are truly overspending (a No Spend Month helped us tremendously with this).

We are seeking a lifestyle change right now, not just a diet that will help us lose the weight of the debt we carry. By seeking balance with our money, we will be able to enjoy some of what we have while cutting the really stupid expenses (SBUX anyone?), and aggressively paying off debt.

I spent some time today setting up some savings goals, including important stuff like paying off debt, building an emergency fund, and other goals like home improvements.

What do you do with a windfall? If you have had one in the past what did you do with it?

Kelly

© 2009, Whalen Media LLC. All rights reserved. To repost or publish, please email Kelly.

About Kelly


Kelly Whalen is the founder of The Centsible Life, a blog where motherhood and money meet. Her goal is to help readers live well on less. Kelly is a mom to 4, and loves that she can stay at home with her kids, and still pursue her passions for writing, personal finance, and social media. You can often find her on twitter and Facebook talking money and motherhood.

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Tagged as: balance, money

  • http://www.flyawayfamily.com/ MB

    I just realized I meant to post these comments in the other post about what I’d do with a million bucks. Oops! Sorry!

  • MB

    I just realized I meant to post these comments in the other post about what I’d do with a million bucks. Oops! Sorry!

  • http://www.flyawayfamily.com/ MB

    Oh yeah, another thing. I would spend a ridiculous amount on organizing items so my house would be uber organized and uncluttered. That IS a dream!

  • http://www.flyawayfamily.com/ MB

    Oh, I dream about a windfall all the time! I would pay off my house (possibly rent it out and buy another one, more suitable for our living style, to live in) . I would probably do a bit of renovation as well. I would set up my kids for college. I would take a few months off (see if my husband could take unpaid leave) and go traveling around the states (and the again in Australia a few years later) in an RV. I would invest some as well.

    Also, on another note, just wondering what kind of swingset you got for $750? I’ve been looking for a wooden swingset with a fort/climbing wall and can’t find one for less than about $1300. I’ve been looking on Craigslist too…no luck.

  • MB

    Oh yeah, another thing. I would spend a ridiculous amount on organizing items so my house would be uber organized and uncluttered. That IS a dream!

  • MB

    Oh, I dream about a windfall all the time! I would pay off my house (possibly rent it out and buy another one, more suitable for our living style, to live in) . I would probably do a bit of renovation as well. I would set up my kids for college. I would take a few months off (see if my husband could take unpaid leave) and go traveling around the states (and the again in Australia a few years later) in an RV. I would invest some as well.

    Also, on another note, just wondering what kind of swingset you got for $750? I’ve been looking for a wooden swingset with a fort/climbing wall and can’t find one for less than about $1300. I’ve been looking on Craigslist too…no luck.

  • Pingback: What would you do with a $1,000,000? | the ¢entsible life

  • http://chieffamilyofficer.com Cathy @ Chief Family Officer

    I totally agree! It’s all about balance. I usually direct windfalls to savings or debt repayment, but that’s because there’s already room in the budget for other things. Although, in your position, I would have spent $750 on the swing too!

  • http://chieffamilyofficer.com/ Cathy @ Chief Family Officer

    I totally agree! It’s all about balance. I usually direct windfalls to savings or debt repayment, but that’s because there’s already room in the budget for other things. Although, in your position, I would have spent $750 on the swing too!

  • http://www.richlikeyou.com rich @richlikeyou.com

    It looks like you have it figured out pretty well and have a good miced allocation. I cant say I would allocate the money any differently.We actually hope to buy our kids a new swing set later this year as well. I think that you cant restrict yourself of all luxuries when you work hard for your money. Like I told my boss recently (I dont think it went over well) I work to live not live to work.

    • Kelly

      Try Costco for the set. It was $1299 in our local store. If you are willing to put it together, you will net big savings.
      I’m sure the boss didn’t like your comment one bit! (but he probably feels the same way)

  • http://www.richlikeyou.com/ rich @richlikeyou.com

    It looks like you have it figured out pretty well and have a good miced allocation. I cant say I would allocate the money any differently.We actually hope to buy our kids a new swing set later this year as well. I think that you cant restrict yourself of all luxuries when you work hard for your money. Like I told my boss recently (I dont think it went over well) I work to live not live to work.

    • Kelly

      Try Costco for the set. It was $1299 in our local store. If you are willing to put it together, you will net big savings.
      I’m sure the boss didn’t like your comment one bit! (but he probably feels the same way)

  • http://rainydaypennies.blogspot.com Cathy

    I agree with you, Kelly. Balance is very important. When I was burdened with debt, I tried to throw everything at it because I just wanted to get rid of it as fast as possible. I actually ended up hurting my goals with this. When I started balancing it with my other goals, I felt a lot more in control. It was the feeling of control that made the biggest difference. Tire blow out? No problem. Hawaii vacation? Sure! I got my debt paid all the same.

    Keep up the good work!

    • Kelly

      Glad to know it worked for you too.
      I figure if it adds a few months to our debt repayment then so be it.
      Instead of spending mindlessly we are spending on things we care about, and paying off the debt.
      Thanks!

  • http://rainydaypennies.blogspot.com/ Cathy

    I agree with you, Kelly. Balance is very important. When I was burdened with debt, I tried to throw everything at it because I just wanted to get rid of it as fast as possible. I actually ended up hurting my goals with this. When I started balancing it with my other goals, I felt a lot more in control. It was the feeling of control that made the biggest difference. Tire blow out? No problem. Hawaii vacation? Sure! I got my debt paid all the same.

    Keep up the good work!

    • Kelly

      Glad to know it worked for you too.
      I figure if it adds a few months to our debt repayment then so be it.
      Instead of spending mindlessly we are spending on things we care about, and paying off the debt.
      Thanks!

  • http://checkbookdiaries.com/ Adam @ Checkbook Diaries

    We just got a windfall also with my annual bonus (not the AIG kind). I had been planning on paying down a loan, but realized that partial payments on that loan are not allowed. We ended up paying of one of our credit cards, putting some money into our emergency account, and saving the rest to finish on of our bathrooms that I ripped out a few years ago. By refinishing the bathroom, we’ll be able to refinance our mortgage to a much lower rate and should end up reducing our P&I by about $300-$400 a month. I think that not being able to make a partial payment into that original loan was a blessing in disguise, because the ways we ended up using the money will have a positive effect on our monthly cashflow.

    Good topic, keep up the good work.

    • Kelly

      Thanks, Adam!
      I really like your blog, I added you to my reader. :)
      We are in similar shoes with the 401k loan (we also used ours for moving/new house), but I figure we are earning more interest paying ourselves back then we would have in the market!

  • http://checkbookdiaries.com/ Adam @ Checkbook Diaries

    We just got a windfall also with my annual bonus (not the AIG kind). I had been planning on paying down a loan, but realized that partial payments on that loan are not allowed. We ended up paying of one of our credit cards, putting some money into our emergency account, and saving the rest to finish on of our bathrooms that I ripped out a few years ago. By refinishing the bathroom, we’ll be able to refinance our mortgage to a much lower rate and should end up reducing our P&I by about $300-$400 a month. I think that not being able to make a partial payment into that original loan was a blessing in disguise, because the ways we ended up using the money will have a positive effect on our monthly cashflow.

    Good topic, keep up the good work.

    • Kelly

      Thanks, Adam!
      I really like your blog, I added you to my reader. :)
      We are in similar shoes with the 401k loan (we also used ours for moving/new house), but I figure we are earning more interest paying ourselves back then we would have in the market!

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