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Holiday Windfalls: 7 Tips on Using Them

Holiday Windfalls: 7 Tips on Using Them

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    The holidays often come with a windfall or two: a monetary gift from a relative or a bonus from an employer. We don’t necessarily expect these gifts — that’s why they’re called windfalls — so deciding what to do with them can be a little complicated. Perhaps you have a pressing need for cash to pay an important bill. If so, that kind of practical application may make your decision for you. If you don’t have such a need, however, take time to consider your options.

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    1. Put it in your emergency fund

    While this option doesn’t sound particularly fun, it may be a life saver. Approximately 60 percent of Americans don’t have enough to make it through a full month on just their emergency savings — a huge problem if you’ve been watching the job market lately. If you’re in that group, a windfall might be your best opportunity for actually starting an emergency fund. If you’ve got a little bit of money already put away for a rainy day, using even a portion of your holiday gift to pad it can pay off. I’ve got my emergency fund in the savings account with the highest interest rate I could find: I’ve already put a few windfalls in there, and I’ve got the comfort of knowing that they’re actually earning me a little money.

    2. Set aside a few dollars for something fun

    Saving money all the time can be tough. More than a few people fall off the frugality wagon because it’s depressing to save every single cent you can. What’s the point of saving every little bit if you don’t get to enjoy your savings on occasion? I wouldn’t suggest spending all of your money on entertainment, but there’s nothing wrong with setting aside a few dollars of ‘play money.’ Depending on the windfall, using a fraction of your gift towards fun could be the equivalent of a dinner out or a new television — if you can afford it, neither is unreasonable.

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    3. Make an investment

    The stock market might make most investors cringe right now, but that doesn’t actually mean that investment is a bad choice. There are still many conservative investment options that can provide a safe place to keep your money and earn a little interest. Those conservative investments don’t provide the return of riskier choices, of course, but they can still provide a little income. Depending on your long-term financial goals, stocks may not be a horrible idea either — consider consulting a financial planner if you want to invest a significant amount of your windfall.

    4. Share the wealth

    I don’t tithe a certain percentage of my income, although I know people who do — including when they receive windfalls. I do believe, however, that it’s good to support causes you believe in (especially when your own financial situation is comfortable). Many non-profits are struggling this year as donations have dropped. If you have made a charitable contribution in years past but have cut back this year, think about donating even a few dollars of your windfall.

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    5. Pay down debt

    Odds are pretty good that you’re already working on paying down any consumer debt you might have — the balances on your credit cards and accounts. Applying a windfall to those balances can not only help you eliminate your debt faster, but it can also save you money in the long run. If you can wipe out consumer debt, you don’t have to pay interest on it. If your credit card balances are in great shape, the same holds true for your ‘good’ debt: mortgages and school loans are considered good debt because they help you earn and save money in the long run. Still, they’re both forms of debt and the faster you pay them off, the less interest you pay.

    6. Put it towards a bigger goal

    Saving up for a down payment on a house? Or for Junior’s education? If you’ve got a big goal that you’re saving up for, a windfall may help move you along to your goal faster than you might otherwise manage. Especially if you have a little time to save up for a goal, like Junior’s college, interest can turn even a few dollars into a larger amount — there are special investment options created for just such goals, like 529 plans. If you are looking at a shorter-term goal, you can often use that savings as a sort of emergency fund: you won’t want to pull money away from your goal, but you won’t be in too much trouble if you do.

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    7. Mix and match

    No matter how small a windfall is, you can divide it among these options if you choose. Dividing a monetary gift between your goals can give you an opportunity to move forward on all of them — if you feel like you’ve only made progress in one area this year, you have the opportunity to make a little progress on all the rest before the year ends. In some cases, it may be crucial to get ahead on a particular goal: you’ll want to take your finances into account to make your decision. And if you have any other ideas for using a windfall, please share them in the comments.

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    Last Updated on November 18, 2020

    15 Tips to Restart the Exercise Habit (and How to Keep It)

    15 Tips to Restart the Exercise Habit (and How to Keep It)

    It’s okay, you can finally admit it. It’s been two months since you’ve seen the inside of the gym. Getting sick, family crisis, overtime at work and school papers that needed to get finished all kept you for exercising. Now, the question is: how do you start again?
    Once you have an exercise habit, it becomes automatic. You just go to the gym, there is no force involved. But after a month, two months or possibly a year off, it can be hard to get started again. Here are some tips to climb back on that treadmill after you’ve fallen off.

    1. Don’t Break the Habit – The easiest way to keep things going is simply not to stop. Avoid long breaks in exercising or rebuilding the habit will take some effort. This may be advice a little too late for some people. But if you have an exercise habit going, don’t drop it at the first sign of trouble.
    2. Reward Showing Up – Woody Allen once said that, “Half of life is showing up.” I’d argue that 90% of making a habit is just making the effort to get there. You can worry about your weight, amount of laps you run or the amount you can bench press later.
    3. Commit for Thirty Days – Make a commitment to go every day (even just for 20 minutes) for one month. This will solidify the exercise habit. By making a commitment you also take pressure off yourself in the first weeks back of deciding whether to go.
    4. Make it Fun – If you don’t enjoy yourself at the gym, it is going to be hard to keep it a habit. There are thousands of ways you can move your body and exercise, so don’t give up if you’ve decided lifting weights or doing crunches isn’t for you. Many large fitness centers will offer a range of programs that can suit your tastes.
    5. Schedule During Quiet Hours – Don’t put exercise time in a place where it will easily be pushed aside by something more important. Right after work or first thing in the morning are often good places to put it. Lunch-hour workouts might be too easy to skip if work demands start mounting.
    6. Get a Buddy – Grab a friend to join you. Having a social aspect to exercising can boost your commitment to the exercise habit.
    7. X Your Calendar – One person I know has the habit of drawing a red “X” through any day on the calendar he goes to the gym. The benefit of this is it quickly shows how long it has been since you’ve gone to the gym. Keeping a steady amount of X’s on your calendar is an easy way to motivate yourself.
    8. Enjoyment Before Effort – After you finish any work out, ask yourself what parts you enjoyed and what parts you did not. As a rule, the enjoyable aspects of your workout will get done and the rest will be avoided. By focusing on how you can make workouts more enjoyable, you can make sure you want to keep going to the gym.
    9. Create a Ritual – Your workout routine should become so ingrained that it becomes a ritual. This means that the time of day, place or cue automatically starts you towards grabbing your bag and heading out. If your workout times are completely random, it will be harder to benefit from the momentum of a ritual.
    10. Stress Relief – What do you do when your stressed? Chances are it isn’t running. But exercise can be a great way to relieve stress, releasing endorphin which will improve your mood. The next time you feel stressed or tired, try doing an exercise you enjoy. When stress relief is linked to exercise, it is easy to regain the habit even after a leave of absence.
    11. Measure Fitness – Weight isn’t always the best number to track. Increase in muscle can offset decreases in fat so the scale doesn’t change even if your body is. But fitness improvements are a great way to stay motivated. Recording simple numbers such as the number of push-ups, sit-ups or speed you can run can help you see that the exercise is making you stronger and faster.
    12. Habits First, Equipment Later – Fancy equipment doesn’t create a habit for exercise. Despite this, some people still believe that buying a thousand dollar machine will make up for their inactivity. It won’t. Start building the exercise habit first, only afterwards should you worry about having a personal gym.
    13. Isolate Your Weakness – If falling off the exercise wagon is a common occurrence for you, find out why. Do you not enjoy exercising? Is it a lack of time? Is it feeling self-conscious at the gym? Is it a lack of fitness know-how? As soon as you can isolate your weakness, you can make steps to improve the situation.
    14. Start Small – Trying to run fifteen miles your first workout isn’t a good way to build a habit. Work below your capacity for the first few weeks to build the habit. Otherwise you might scare yourself off after a brutal workout.
    15. Go for Yourself, Not to Impress – Going to the gym with the only goal of looking great is like starting a business with only the goal to make money. The effort can’t justify the results. But if you go to the gym to push yourself, gain energy and have a good time, then you can keep going even when results are slow.

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