Tips for What to do when you get a windfall of money

Tips for What to do when you get a windfall of moneyTips for What to do when you get a windfall of moneySo youve come into a bit of cash, congratulations First things first, whats a windfall? A windfall is when you received an unexpected, potentially large, sum of money. This could be an inheritance, a gift, a refund (tax, student loan), etc. Basically, its an amount of money that you werent relying on. This is an exciting moment, but its also a good time to take a step back before making any decisions.Here are some ideas for what you should do if and when you get a windfall.Dont Spend It Right AwayI know its tempting, but dont spend this money as soon as you get it If you spend it without being thoughtful, you know youll regret it later. If you know that money burns a hole in your pocket, move the money out of your checking account. Put the money into a savings account that is separate from your checking, or give the check to someone you trust to hold onto.Prioritize Your GoalsThis is a great time to get some perspective on your financial situation. Figure out which goals you want (or must) attack first. It could be paying down debt, building up savings, or investing in something youve been putting off. Whatever the goals are, you should identify them individually and then prioritize them. It helps to write out your goals clearly so you know where you stand.Get Clear on Your DebtsThis is an amazing opportunity to departure making progress on any debt you have. The first step here is to figure out exactly how much you owe and to whom. If you arent sure perhaps you have been avoiding your debt a good start is to pull yourcredit report. You can do this for free atwww.annualcreditreport.com. Youll see any debts that have been sent to collections, any tax liens, and any late payments on credit cards or loans. This probably wont feel very good, but its necessary. If you see any debts listed that you dont recognize, you should do some digging to see if they are on your report in error. Whatever you do recognize, come up with a plan to pay it off.Beef Up Your Emergency FundSaving for emergenciesdoesnt feel very fun, but its an incredibly important step to take. It will protect you if something unexpected happens, like losing your job or getting sick. If you dont have debt, or you have money leftover after paying off your debt, you should use your windfall to beef up your emergency savings account.Put 10% Aside for FunPutting all your money towards responsible goals is great, but it often doesnt feel very fun or exciting. Thats why its a good idea to set ten percent of that windfall aside just for you. When you make room forindulgence, its easier to be responsible with most of the money. Plus, you get the instant gratification that is so compelling. Put the money towards something youve been really wanted to do or have, but that you havent been able to afford.This article was originally published on MaggieGermano.com.