Sizable Income Increase
Who doesn’t dream of receiving a cash windfall?
Whether yours comes as a large commission check, a salary bonus, an inheritance, or even a hefty tax refund, you have a chunk of new money and lots of choices for spending it. The real question is: Will you use it wisely or squander it on a passing whim?
You can look at this windfall in several ways. Is it an opportunity to reward yourself with something special you’ve always wanted? Yes. Is it a chance to do something that can have a long-term effect on your finances? You bet. Can you do both at once? Absolutely!
Before you spend all of your new cash, set aside at least a percentage of it for saving or investing. Here are some smart ideas for a windfall that will continue to pay rewards in the future:
- Increase your retirement savings.
- Put a down payment on a house.
- Build up your emergency fund.
- Pay down credit card debt.
- Prepay your mortgage and build your home equity.
- Buy an annuity to secure income in old age.
- Save it for education expenses yours or your child's.
Before you spend it, find out if you’ll owe taxes on the money you receive. Set aside the money you’ll need to pay the taxes, and base your spending plans on the after-tax amount. If you receive a really large amount of money, consult a professional for advice.
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More Thoughts on Managing Unexpected Cash:
Western & Southern Life does not provide tax or legal advice. Please contact your tax or legal advisor regarding your situation.
*Products suggested for this Life Stage are not a specific recommendation or solicitation to purchase. Mutual funds are offered through an affiliate of Western & Southern Life.