We’ve all got that dream – we’ll have that massive lotto win, Great-Aunty Betty will die and leave us everything… or even that a spectacular tax return or bonus will come our way.
Although they’re aren’t regular occurrences, financial windfalls can come our way now and then… so instead of blowing it all, what’s the best way to take advantage of a bonus or extra dollars that come our way?
The temptation to splurge can often be overwhelming, but your future self is hardly likely to thank you for replenishing a wardrobe or buying more “stuff” that is likely to end up in a charity bag in a year or two. So what are some eminently sensible and grown-up ways of making that money work harder?
Here’s a few ways to spend this money that will give you long-term benefits.
- If you have debt, especially non-deductible debt like credit cards or personal loans, pay them down first, followed closely by long-term debt like your Mortgage
- If you’re really not sure what to do and everyone is putting their two cents worth in and confusing you ever more, put it in a high interest savings account until you can do some research and be comfortable with your decision
- Can you put a bit extra in your super? Retirement might be a long way off, but that means you have the benefit of long term compounding interest in your favour
- Is there enough for you to start investing? It may be worth kicking off a portfolio of shares, property or managed funds if there’s enough.
- Getting financial advice can be of great benefit. Financial professionals often have access to funds and research that are unavailable to many and they can ensure that you invest in line with your risk profile, not putting ‘all your eggs in one basket.’
- Have you put off personal protection strategies like income protection, trauma cover or health insurance? It may be worth investing in looking after yourself
- Have you considered taking time out and learning new skills? Maybe it’s time to invest in yourself and do that course. Who know’s a career change might be just what you need!
And if you’d really like to still blow just a little of it – set a limit – maybe 10 – 20% and knock yourself out. Have that splurge, but be smart too.
Do something that your future self with thank you for.