What to do with a small windfall

How to make the most of a little extra cash

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Episode Transcript

Speaker 1 (00:03):
Welcome to Before Breakfast, a production of iHeartRadio. Good Morning,
This is Laura. Welcome to the Before Breakfast podcast. Today's
tip is about what to do with a small windfall.
It is fun to use money intentionally rather than see

(00:25):
it all disappear into the same wash of money going
in and out. So if you do find yourself with
a little extra sometime, here are some ways to think
about it. So today's tip was inspired by a recent
conversation about budgeting. I have run my own business for

(00:45):
many years, and my income tends not to come in
at regular intervals. But I know a number of people
get paid every week or every other week on a
certain day. Now, normally this would mean either to or
four paychecks a month, but on occasion, you get an
extra paycheck a month, just by virtue of where the

(01:06):
days of the week happen to fall. Twenty six paychecks
a year means two most months, but three in two months.
If the vast majority of your spending is budgeted out
monthly based on two paychecks, then getting an extra paycheck
can feel like a little bonus. Or perhaps you might

(01:27):
get a small windfall for other reasons too, like a
slightly bigger tax refund than you thought you'd get, or
maybe it's a rebate on something that finally came through.
So when this happens, what should you do with it now? Obviously,
if one has any high interest debt, the money should
go to that. But if that is not the case,

(01:48):
which I'm guessing maybe the case for a lot of
people listening to this, then I think this can be
a fun question. A small windfall isn't going to change
your life, but of course that means it's easy to
see a small windfall disappear into the wash of money
going in and out for various things. It would be
more fun to use it intentionally. So I personally love

(02:11):
the idea of peace of mind, and so if your
emergency fund is a bit underfunded, you might allocate a
bit more to that if things did go awry, not
needing to worry about money for even another two weeks
or so could buy you breathing room. If you did
want to spend the windfall on something, I think the

(02:32):
absolute best thing to spend it on would be an experience.
You will make memories that will last a lot longer
than most other things money can buy. Maybe there's a
weekend trip you'd like to take somewhere, make a long
weekend of it, go somewhere fun, and then consciously record
the memories to think about later. This is what my

(02:53):
windfall enabled. Or it might be an experience like taking
your family boding or buying a membership somewhere that you
visit again and again. Another good category would be social spending.
It's fun to treat people to things, and this is
almost universally reciprocated, which means the windfall will keep generating

(03:17):
benefits in the future. For instance, you might decide to
take four different friends out to dinner, either individually or altogether.
Either way, these people are highly likely to then invite
you to do things with them, which means you'll get
a lot of lunch or coffee invitations spread out over
the next few months. You could also create a lot

(03:38):
of meaning by donating at least part of a windfall.
There are many worthy causes in the world, but I
think you'd enjoy this most by donating to a smaller
group where it would make a big difference, perhaps a
local place where you already volunteer. Then you are there
seeing what your money is enabling. It is so much

(04:00):
more fun than losing track of it. In any case,
even if you don't have a windfall on the horizon,
this can be a fun question to ask yourself, what
would you do with a small windfall? People sometimes daydream
about what they would do if they won the lottery,
but this is highly unlikely to happen, particularly if you

(04:20):
don't usually buy lottery tickets. The odds of a small
windfall happening, though, are reasonably good. People who budget monthly
but get paid weekly or bi weekly, we'll see it
happen about twice a year, and many other people will
no doubt see some amount of extra cash come into
their lives at some point. So make yourself a list

(04:42):
of what might be fun, and then, who knows, maybe
you will figure out a way to make those things happen,
regardless of what is going on with your finances in
the meantime. This is Laura. Thanks for listening, and here's
to making the most of our time. Thanks for listening

(05:09):
to Before Breakfast. If you've got questions, ideas, or feedback,
you can reach me at Laura at Laura vandercam dot com.
Before Breakfast is a production of iHeartMedia. For more podcasts
from iHeartMedia, Please visit the iHeartRadio app, Apple podcasts, or

(05:32):
wherever you listen to your favorite shows.