Advertising
Advertising

Holiday Windfalls: 7 Tips on Using Them

Holiday Windfalls: 7 Tips on Using Them

windfall

    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.

    Advertising

    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.

    Advertising

    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.

    Advertising

    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.

    Advertising

    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.

    More by this author

    50 Businesses You Can Start In Your Spare Time 8 Replacements for Google Notebook 5 Sites Where You Can Sell Your Photos 7 Tools to Find Someone Online 19 Entrepreneurship Websites Worth Checking Out

    Trending in Featured

    1 How to Cultivate Continuous Learning to Stay Competitive 2 Simple Productivity: 10 Ways to Do More by Focusing on the Essentials 3 Is Procrastination Bad? The Truth About Procrastination Revealed 4 12 Rules for Self-Management 5 How to Take Notes Effectively: Powerful Note-Taking Techniques

    Read Next

    Advertising
    Advertising
    Advertising

    Last Updated on November 5, 2019

    How to Cultivate Continuous Learning to Stay Competitive

    How to Cultivate Continuous Learning to Stay Competitive

    Assuming the public school system didn’t crush your soul, learning is a great activity. It expands your viewpoint. It gives you new knowledge you can use to improve your life. It is important for your personal growth. Even if you discount the worldly benefits, the act of learning can be a source of enjoyment.

    “I have never let my schooling interfere with my education.” — Mark Twain

    But in a busy world, it can often be hard to fit in time to learn anything that isn’t essential. The only things learned are those that need to be. Everything beyond that is considered frivolous. Even those who do appreciate the practice of lifelong learning, can find it difficult to make the effort.

    Here are some tips for installing the habit of continuous learning:

    1. Always Have a Book

    It doesn’t matter if it takes you a year or a week to read a book. Always strive to have a book that you are reading through, and take it with you so you can read it when you have time.

    Just by shaving off a few minutes in-between activities in my day I can read about a book per week. That’s at least fifty each year.

    2. Keep a “To-Learn” List

    We all have to-do lists. These are the tasks we need to accomplish. Try to also have a “to-learn” list. On it you can write ideas for new areas of study.

    Advertising

    Maybe you would like to take up a new language, learn a skill or read the collective works of Shakespeare. Whatever motivates you, write it down.

    3. Get More Intellectual Friends

    Start spending more time with people who think. Not just people who are smart, but people who actually invest much of their time in learning new skills. Their habits will rub off on you.

    Even better, they will probably share some of their knowledge with you.

    4. Guided Thinking

    Albert Einstein once said,

    “Any man who reads too much and uses his own brain too little falls into lazy habits of thinking.”

    Simply studying the wisdom of others isn’t enough, you have to think through ideas yourself. Spend time journaling, meditating or contemplating over ideas you have learned.

    5. Put it Into Practice

    Skill based learning is useless if it isn’t applied. Reading a book on C++ isn’t the same thing as writing a program. Studying painting isn’t the same as picking up a brush.

    Advertising

    If your knowledge can be applied, put it into practice.

    In this information age, we’re all exposed to a lot of information, it’s important to re-learn how to learn so as to put the knowledge into practice.

    6. Teach Others

    You learn what you teach. If you have an outlet of communicating ideas to others, you are more likely to solidify that learning.

    Start a blog, mentor someone or even discuss ideas with a friend.

    7. Clean Your Input

    Some forms of learning are easy to digest, but often lack substance.

    I make a point of regularly cleaning out my feed reader for blogs I subscribe to. Great blogs can be a powerful source of new ideas. But every few months, I realize I’m collecting posts from blogs that I am simply skimming.

    Every few months, purify your input to save time and focus on what counts.

    Advertising

    8. Learn in Groups

    Lifelong learning doesn’t mean condemning yourself to a stack of dusty textbooks. Join organizations that teach skills.

    Workshops and group learning events can make educating yourself a fun, social experience.

    9. Unlearn Assumptions

    You can’t add water to a full cup. I always try to maintain a distance away from any idea. Too many convictions simply mean too few paths for new ideas.

    Actively seek out information that contradicts your worldview.

    Our minds can’t be trusted, but this is what we can do about it to be wiser.

    10. Find Jobs that Encourage Learning

    Pick a career that encourages continual learning. If you are in a job that doesn’t have much intellectual freedom, consider switching to one that does.

    Don’t spend forty hours of your week in a job that doesn’t challenge you.

    Advertising

    11. Start a Project

    Set out to do something you don’t know how. Forced learning in this way can be fun and challenging.

    If you don’t know anything about computers, try building one. If you consider yourself a horrible artist, try a painting.

    12. Follow Your Intuition

    Lifelong learning is like wandering through the wilderness. You can’t be sure what to expect and there isn’t always an end goal in mind.

    Letting your intuition guide you can make self-education more enjoyable. Most of our lives have been broken down to completely logical decisions, that making choices on a whim has been stamped out.

    13. The Morning Fifteen

    Productive people always wake up early. Use the first fifteen minutes of your morning as a period for education.

    If you find yourself too groggy, you might want to wait a short time. Just don’t put it off later in the day where urgent activities will push it out of the way.

    14. Reap the Rewards

    Learn information you can use. Understanding the basics of programming allows me to handle projects that other people would require outside help. Meeting a situation that makes use of your educational efforts can be a source of pride.

    15. Make Learning a Priority

    Few external forces are going to persuade you to learn. The desire has to come from within. Once you decide you want to make lifelong learning a habit, it is up to you to make it a priority in your life.

    More About Continuous Learning

    Featured photo credit: Paul Schafer via unsplash.com

    Read Next