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View Full Version : $4,000 unexpected windfall. what to do with it?



jp1
3-23-11, 11:18pm
About 2 years ago I got a new job working for a fairly large employer. After getting hired I learned from other employees that there was a class-action lawsuit alleging that people at my level should not be exempt from overtime. I didn't think much of it and didn't read the letters from the law firm handling the suit. After it was too late to opt out of the "class" I finally read them. Well, apparently the suit was settled in favor of the class. I got a check in the mail this week for $3,998!

I'm torn as far as what to do with the money. I already save close to 20% of my salary and have no debt, so there's no pressing need for the money, and I've been steadily following my savings goals for years so this amount of money won't significantly affect them long-term. Since it's not a life-changing amount to me I basically see 3 possible uses for the money. 1) just throw it into retirement savings and be done. 2) use it for something fun and frivolous that I'd never normally do since that's not my nature (taking the MSF motorcycle license training, buying a modest used bike and a year's worth of insurance come to mind) or 3) find a very worthy charity(ies) and use it to help people who in some way could really have it help their lives.

I'd love to hear other suggestions or votes for any (or all, since I suppose I could use it for more than one of my initial ideas) of the above.

iris lily
3-24-11, 12:24am
I''d say divide it 3 ways: some goes to something fun for you, some to charity, the rest save it. 1/3 to each. That's along the lines of what I've doing with money my mother left to me:

Something necessary
Something for charities
Something fun (but I'm waiting on the fun thing to see how much the necessary thing will cost.)
My mom would approve of #1 and #2 but not #3. ha ha.

Gina
3-24-11, 12:35am
I was thinking the same thing. $4,000 is a lot of money. I would probably divide it into 4 (not necessarily equal) parts.

1. retirement savings
2. something for yourself, practical or fun
3. charity or gifts
4. pot-luck: temporarily saved for something unexpected that you want or need that comes up later this year.

freein05
3-24-11, 12:51am
Spend it the economy needs it.

sweetana3
3-24-11, 7:10am
We always talked about bonuses and did what Iris said. First debt, then savings, then something planned for usually 1/3 each. We kind of lived life that way too. Did not wait to do some fun things like travel until later so all along we had interesting adventures but always paid down mortgage and saved for retirement at the same time. Balance in all things.

Shari
3-24-11, 5:23pm
If you don't have a ROTH IRA, I would start one and throw it in there.

jp1
3-24-11, 9:56pm
I've already put $3k into the roth for this year and will be putting the other $2k in during april and may. This money would have to go into my taxable etrade account along with the other $7k slated for saving this year.

Sad Eyed Lady
3-24-11, 11:06pm
As others have pointed out, you don't have to do just one thing with the whole of it. Have some fun; save some; give some away!

Gina
3-25-11, 3:05am
I am admittedly am very conservative with money. If I didn't know what to do with a nice piece of change that fell into my lap, I'd just tuck it away till I had a much better feel what to do with it. I know you are just exploring options with this thread, but why not save it all till you are totally comfortable with your final choice(s). Just because you put it in the bank does not mean it has to stay there forever. :)

rosarugosa
3-25-11, 5:14am
I am admittedly am very conservative with money. If I didn't know what to do with a nice piece of change that fell into my lap, I'd just tuck it away till I had a much better feel what to do with it. I know you are just exploring options with this thread, but why not save it all till you are totally comfortable with your final choice(s). Just because you put it in the bank does not mean it has to stay there forever. :)
But if you run out and spend it hastily, it will be spent forever!

iris lily
3-25-11, 10:39am
I am admittedly am very conservative with money. If I didn't know what to do with a nice piece of change that fell into my lap, I'd just tuck it away till I had a much better feel what to do with it. I know you are just exploring options with this thread, but why not save it all till you are totally comfortable with your final choice(s). Just because you put it in the bank does not mean it has to stay there forever. :)

Oh, my feeling HAS always been: once it goes to the bank as savings, it can't come out! ha ha ha. That's why I have money in the bank!

But this windfall from my mom is something different, I am deliberately NOT saving any of it. That's radical for me.

ljevtich
3-25-11, 12:08pm
I like the idea of the motorcycle training, insurance, and buying a bike. You will save on gas money, your insurance will go down, and you will get the enjoyment for years to come. Just make sure that you know how to do the maintenance yourself for the bike, otherwise the savings will go down. And you could always give money to the place that does the training. Most of those people are either volunteering their time or not making much money off of the training.

jp1
3-26-11, 12:24pm
Actually the motorcycle would be a completely new expense. Currently my entire transportation budget consists of a $60 pre-tax for a bus pass and maybe $30/month in zipcar use. Buying the bike wouldn't be about transportation so much as it would be about doing something that appeals to me as being really fun. Back when I was in high school I learned to ride my uncle's bike and got to do so whenever we went to visit and I remember it being an absolute blast.

My feelings about money tend to be like Iris' in general, and my thoughts about this windfall match her attitude towards her windfall. I don't feel deprived or wanting for anything. There are no big purchases that I've been postponing until I could afford them. There's no debt to be paid off. There's no increased savings that need to be done to reach my long-term goals. I spend money on small enjoyments on a regular basis, but that's part of my budget and doesn't hinder my savings goals. The only reason I'm contemplating doing something radical like buying an expensive toy and the necessary training to use it is because this money pretty much just fell out of the sky into my lap and for just this once I think I want to do something outside my normal routine. Do I need a motorcycle or scuba lessons or any of the other things I've been contemplating in order to have a more full or complete life? No. But would it be fun to splurge on something like this just this once? Absolutely.

sumarie
3-26-11, 7:01pm
Well, I hope you'll do it, then, jp1! It seems to me that if it turns out to be the absolute blast you remember it being, then you will have added that much more fun to your life. And if not, then you can always sell it & recoup some of the unexpected (& potentially fun- in- other -ways) windfall. I think one of the things that happens with age is that we can become more cautious. Up until the time I busted my ankle, I was fearless. Now, not so much. So if you're still young enough to enjoy a motorcycle (& you'll promise your elders to be safety conscious!), this might be a golden opportunity that will perhaps lose its appeal as the years go by.

jp1
3-26-11, 9:19pm
@sumarie, I hope 43 is young enough to enjoy a motorcycle! I'm definitely safety-conscious so I'm not too concerned about that aspect of things, and hope no one else will be either. The bigger concern is that people will think I'm having a midlife crisis or something. But if that is the case at least I'm not getting through it by finding a much younger boyfriend or other such foolishness!

sumarie
3-29-11, 11:49pm
Yes, good point about the younger boyfriend!

It will be great to hear what you end up deciding to do with your windfall.