Got Unexpected Cash? This is What You Should Do With It

Paying off debt and bills and other expenditures give you little financial flexibility. However, a sudden windfall may give you a way out; what should you do when that happens?

Do Nothing

Most people feel compelled to make a decision immediately once they get a windfall. However, sometimes it is better to postpone making a decision.

Doing nothing enables you to look at the situation from a detached point of view, giving you more time to assess what to do with the windfall. Take the time to think about whether investing or paying off debt is the best option for you.

Pay Off Mortgage

Mortgage is one of the biggest loans that most people pay for late into their life. The windfall you get gives you the opportunity to start paying your mortgage faster. Check the rates with your lender to determine how much is left and how fast you can pay it off using the extra money you have.

Paying mortgage provides you with the financial flexibility you need heading towards retirement. You get to use the extra money you keep for other things such as investments, travel fund or other expenses.

Pay Off Other Debt

If you are uneasy about fast tracking your mortgage payment, think about lowering your line of credit or start paying off credit card debt.

Paying off credit card debt frees up your finances more than you think. Paying the minimum will get you into trouble if you stretch it over a long time. The windfall you get will help you pay off other debt faster; and gives you an extra financial boost to do the things you like, save or make your money grow through investments.

Invest

The windfall you get provides you the opportunity to start investing, even if you have a retirement plan in place. Investing enables you to grow your wealth even in your old age.

Before you invest there are a few things you need to consider. Are you a conservative investor comfortable with slow but steady gains? Are you at the end of paying off mortgage? What do you plan on doing after retirement? These pertinent questions and your answers to them help you make a decision.