3 Situations Where You Come into Money and Should Think before You Spend
Life is full of ups and downs. We’ve all experienced the unplanned emergency where we have to spend considerable funds to recover from a mistake, make a major repair, or some other unforeseen expense. While there’s a payday loan to help in a situation like that, what about when life throws you a favourable surprise or one-time windfall as well? Here are three situations where you may come into a large sum of money in life with tips on how to react so you don’t regret it later:
- Wedding – A wedding is one time in life where many people can count on receiving a fair number of cash gifts to give a little financial boost to assist in starting a new life together. Getting a lot of money all at once can make it easy to waste, so it’s important to plan ahead what you intend on doing with the funds. Many newly married couples spend wedding-gift money on a honeymoon, a new auto, or some other large one-time expense. Rather than having no plans and then splurging right after the big day, it would be beneficial to make an estimate on what kind of funds might reasonably be given and how you plan on using them. Options might range from starting an emergency fund to saving for a flat. The key is to have a plan.
- Inheritance – Depending on how large your inheritance is and how much your current income is, you should plan out what you will do with this windfall. I was recently out with a family member who received a large sum of money and spent some of it on entertainment for our family. Should the same thing happen to you, think about how you want to ration out your money. You should have a set limit of what you want to spend for fun and what you want to save for the future. Also consider any debts you could immediately pay off with an inheritance.
- Legal Settlement – There are many different situations that could lead to a legal settlement. Often times, there’s a long period of legal proceedings and negotiation of the settlement, so there should be plenty of time to contemplate how to handle the money when it finally comes in. It’s important to make this money last, as it’s unlikely to ever happen again. Think about how you might best invest or spend the money over a period of several years, rather than all at once. You will look back and be much happier that there was a well thought out and executed plan, rather than impulsive spending on items that will be short-lived.