What do you do with windfalls?

[annibe11e]

I'm at a job where I will be getting bonuses of varying amounts twice a year. I'm curious about what other people do with an extra chunk of money outside of the regular budget.

[disneysteve]

Either put it toward debt if you have any or toward savings if you don't.

[coffee]

If you have any debt: apply the windfall towards the debt. If no debt, put it in an emergency fund. If you have an emergency fund, invest half and have fun for a long weekend with the other half.

[kork13]

If you have any debt: apply the windfall towards the debt. If no debt, put it in an emergency fund. If you have an emergency fund, invest half and have fun for a long weekend with the other half.

That's probably the smartest method of going about it. You might also consider investing some/all of it into retirement or taxable investment accounts.

But between those options, you'll do right by yourself pretty well. This last month I spent less than normal & adjusted my tax withholding for the remainder of the year, so I ended up with about $700 "extra" in my checking this month. It will likely go either to my car loan or my EF.

[greenskeeper]

buy windmills

[scfr]

I'm boring. I just bank it.

[bennkar]

When I got my only windfall I put it into two $5,000 5 year CDs. Of course this was back in 2007 when rates were reasonable. When they matured I used the money to pay off the remaining mortgage balance and saved the remainder. If I were to get that today.... I would invest in a nice dividend paying stock. There are plenty of good ones out there.

[feh]

OP - given the name of this site, you'll read that most people here would just save it or apply it toward debt. Of course, that's not what the average person walking down the street would do...

[Mesem]

I would save that money or invest it to make more money!

[LivingAlmostLarge]

Typically we send it to taxes. We always end up owing and so I make sure whatever windfall at least half is gone to taxes. Then we decide usually to save the rest.

[FrugalSensei]

Definitely agree to use it to pay down debt but if you don't have debt then find a savings account with a good rate of return. You can always withdraw from that savings account if life takes a bad turn or if you feel you deserve a reward. I totally believe in rewarding yourself - that's why you work so hard, right? Just don't do nuts.

Whatever you do, don't start to rely on those bonuses or blow them on extravagant rewards. They may keep coming but if they suddenly stop or get greatly reduced you will be left with fear and regret versus a nice big savings account.

[dawnwes]

Ours aren't all that big. Once per year and the last few years we have gotten about $2,000 total after taxes and such. We use ours for vacation each year. Our max vacation is $2,000, so if there is any surplus we use it for anything we have been putting off (home improvement or whatever).

However, we are out of debt in all areas but mortgage.

Dawn

[snafu]

We've always had a list of future projects so an unplanned extra $$ windfall $$ continues our pattern of 10% to savings and the balance towards the next project we desire. This presumes consumer credit [CCs] paid-in-full each when due.