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What to Do with a Sudden Large Sum of Money

January 10, 2022 By MelissaB Leave a Comment

Sudden Large Sum of Money

For years, my aunt and uncle helped their aging relative, Dottie. They didn’t receive any financial assistance for the five to ten hours a week they spent maintaining Dottie’s lawn, cooking her meals, and driving her to doctor’s appointments. They put in that time, week after week, because they loved her and wanted to make the remainder of her life more comfortable. However, my aunt and uncle were in for a surprise when Dottie passed away. They discovered not only that Dottie had a small fortune, but that she had left all of her money to them. My aunt and uncle raised a large family and had always lived on a bare-bones budget, yet suddenly, they had inherited a sudden large sum of money.

My aunt and uncle’s situation was not unique. Many people fall into a large sum of money through inheritances, insurance settlements, gambling, or other ways. If this happens to you, what should you do with the money?

Do Nothing for a Few Months

The best thing to do is nothing. Yes, you heard me. Take the money you received, put it in a bank account, and do nothing with it for a few months to a year. Take time to get over the shock of your good fortune. Take time to plan out how best to use the money.

If you don’t take the time to let the money sit, you may blow it on all of the things you’ve always wanted but could never afford—a new boat, a vacation home in the mountains, nights out at fancy restaurants, etc. Take the time to get used to having so much money before you do anything with it.

Consult with a Financial Advisor

You may also want to consult a financial advisor and see what she recommends you do with the money. However, choose carefully. Some financial advisors are paid based on the products that they sell you, so they may push products that aren’t the best use of your money so they can also benefit from your windfall.

What to Do with a Sudden Large Sum of Money

After you’ve taken a few months to set the money aside and get used to the idea of having a fatter bottom line, you are ready to decide what to do with the money.

Set Aside a Portion to Spend

Sudden Large Sum of Money

If you receive a large amount of money, the first thing most people want to do is spend it. Go ahead and spend some of it, but first, decide what amount you will use frivolously. Maybe you decide on 5% of the money.

Take that 5% and have no guilt buying what you want. Whether that is expensive meals out, or a vacation, or a new car, enjoy the money guilt-free. But, stop spending after that and make wise choices with the remaining funds.

Pay Down Debt

One of the best ways to use a sudden large sum of money is to pay down or pay off your debt. After you pay off debt, you can start with a clean financial slate. Then the money you make every month will be used for the present and the future, not servicing money you spent in the past.

Create an Emergency Fund

How’s much is in your emergency fund? If you have nothing saved or only a thousand dollars or two, use your windfall to bulk up your emergency fund. Experts recommend saving six to 12 months of expenses in an emergency fund. If you have a steady, reliable job, go for the lesser amount. If you’re a freelancer or have a job that may get cut when the economy stalls, save enough for 12 months.

Invest

After you pay down your debts and bulking up your emergency fund, consider investing. This is one of the best uses of the windfall because you’ll continue to earn money through investing, making your windfall grow.

Contribute to Your Retirement

Getting a sudden large sum of money can make your financial future brighter when you contribute to your retirement accounts. However, the government limits how much you contribute to your retirement each year. Depending on how much money you receive, you may not be able to use it all by contributing to your retirement, or you will have to space your contributions over several years.

Buy a House

Sudden Large Sum of Money

If you don’t own a home, now might be the time to buy one. However, even though you have a sudden large sum of money, don’t buy your house based on that money. Instead, buy a house that you would have been able to afford before you received the money. This assures that you won’t spend more than you earn. Use your newfound money to put down a hefty down payment.

By choosing a house you can afford based on your salary, you’ll be able to keep and maintain monthly payments on the house even if you lose the money you just inherited. (Sadly, many people who receive large windfalls end up broke a few years after.)

Contribute to Your Children’s College Funds

Another option is to contribute to your children’s college funds. When it’s time for your child to go to college, the money will be there waiting. You can contribute to a 529, or if you want to save money for your child without earmarking it for college, you can contribute to a Uniform Gift to Minors Act (UGMA).

Final Thoughts

When you come into a sudden large amount of money, you have many decisions to make. Take a few months to a year and do nothing. Wait for the shock to subside. Then, choose from one to several of the above options when deciding what to do with the money. Choose the options that will best serve you and your family. And don’t forget to earmark a small percentage of the money to spend and enjoy.

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MelissaB
MelissaB

Melissa is a writer and virtual assistant. She earned her Master’s from Southern Illinois University, and her Bachelor’s in English from the University of Michigan. When she’s not working, you can find her homeschooling her kids, reading a good book, or cooking. She resides in New York, where she loves the natural beauty of the area.

www.momsplans.com/

Filed Under: budget, Debt Reduction, free money Tagged With: emergency fund, inheritance, money management, paying down debt, windfall

Earn Rewards with Swagbucks

June 9, 2015 By Shane Ede 3 Comments

It’s been a while since I last wrote about Swagbucks.  A little over a year to be exact.  And almost 3 years before that.  I’ve been using Swagbucks for a long time, I guess.  What is Swagbucks?

Swagbucks is a rewards program.  You earn rewards called Swagbucks for doing a variety of activities.  What sort of activities?  Glad you asked.

Swagbucks Search

Earn SwagbucksThis is probably the easiest way to earn Swagbucks.  You can install the Swagbucks add on for your browser and set the Swagbucks search as your default search so that when you search in the location bar it directs you through their search engine.  When you use their search, you can randomly win Swagbucks.  It’s not every search, but depending on your search volume, you might win about once a day.  Your winnings will vary, but they can range from lower amounts like 5 Swagbucks all the way up to 20-50.  The search feature is powered by Yahoo search.

Swagbucks Polls and Surveys

This is probably the second easiest way to earn Swagbucks through the program.  You log into the site and take a poll.  The payout is usually something like 2 Swagbucks for each poll you take and the polls are usually pretty short.  You can also take surveys which tend to be a little longer, but the payout, which varies, is usually a bit better as well.

Swagbucks Coupons

Swagbucks has a relationship with Coupons.com that allows for you to sign into their site and print off coupons.  Because of that relationship, there’s always a pretty good selection of coupons on stuff you’ll use all the time.  For each coupon that you redeem, you earn 10 points.

Swagbucks Shopping

Like most rewards programs, Swagbucks has agreements with all kinds of online retailers where you can click through a link on the Swagbucks site and then earn points based on the money you spend at the retailer.  For example, their homepage is showing 4 Swagbucks for every dollar spend at Walmart.com right now.

Swagbucks Daily Crave

This is a newer way (to me at least) to earn Swagbucks.  There’s a link on the sidebar of the Swagbucks site that leads you to a new page that shows you some videos.  You earn a Swagbuck for watching a few of them.  Pretty easy to use and easy to earn a few Swagbucks each day.

Swagbucks Play

With the play feature, you can play online games for Swagbucks.  The amount you can win varies depending on the game, but certainly a great way to have a little fun and earn some Swagbucks easily.

It’s pretty easy to earn Swagbucks and work towards rewards.  Do a few of these tasks each day and the Swagbucks will add up pretty quickly.  And trading the Swagbucks in for your rewards is pretty easily too.

There’s two ways to redeem your Swagbucks.

Rewards

This is my favorite way to redeem Swagbucks.  For me, the thing I redeem them for the most is the $5 Amazon gift card.  It’s only 500 Swagbucks.  There’s a whole bunch of different places that you can get gift cards from, and you’re sure to find at least one or two that you’ll want to have.

Swagstakes

While it’s never a sure thing, Swagstakes can be a fun way to redeem your Swagbucks.  Obviously, Swagstakes is a play on Sweepstakes.  You redeem your Swagbucks for entries into a Swagstakes with the hope that you’ll win something worth way more than your Swagbucks are worth.  The entry “cost” varies by the Swagstakes, but most are less than 20 Swagbucks per entry.  I don’t use this option very often as I tend to prefer the sure thing of a gift card, but I have entered a few of them.  Never won yet though. 🙁

Swagbucks is a pretty cool rewards site that I’ve been using for years and I’ve never had a bad experience with them.  Over the years, I’ve redeemed my Swagbucks for a whole bunch of Amazon cards.  Depending on how much I use the site, I’ve sometimes earned a new card every month.  On average, it’s more like every 3-6 months though.  Still, for a few minutes a day, it’s an easy way to save a bit of money on my Amazon purchases.

 

 

Shane Ede

I started this blog to share what I know and what I was learning about personal finance. Along the way I’ve met and found many blogging friends. Please feel free to connect with me on the Beating Broke accounts: Twitter and Facebook.

You can also connect with me personally at Novelnaut, Thatedeguy, Shane Ede, and my personal Twitter.

www.beatingbroke.com

Filed Under: Coupons and Discounts, free money, Frugality, Saving, ShareMe Tagged With: rewards, swagbucks

Giveaways: Budget Stretcher or Waste of Time?

April 20, 2015 By MelissaB 3 Comments

Giveaways are nothing new.  Just read a handful of blogs and you’ll likely find plenty of giveaways.  But are they worth the time and effort?  Can you ever win something good?

I’ll be honest, my husband and I are digging out of a hole of debt.  The good news is that we’ve paid off over half of our debt.  Yeah!

However, we’ve reached a point where we firmly refuse to acquire any new debt.  Meanwhile, our car is 10 years old and has 150,000 miles on it, our 10 year old needs braces, and we’ve just had nearly $2,000 in medical and dental work. . .

Our money is stretched to the max.

GiveawaysSo, I decided to try my hand at giveaways.

Right now, we just don’t have a lot of extra money to pay for presents and fun items for the kids, so I thought giveaways could be a good way to get some of the luxuries we can’t afford.

So far, in three months (December through February), I’ve won 5 prizes:

  • A $50 Visa gift card
  • A board game for my 10 year old ($29.95 RV)
  • A $10 bookstore gift card
  • A movie
  • A book

During these past three months, I entered 47 giveaways, meaning I won 10% of the giveaways I entered.  Not bad.

How Much Time Do I Spend Entering Giveaways

I know there are some people that spend A LOT of time entering giveaways, but I don’t have time for that.  Instead, I enter giveaways once or twice a week for 30 to 60 minutes at a time.  I often enter the giveaways when my kids are watching television in the afternoon (they get an hour a day of tv time), or in the evening when I’m too tired to do anymore work.  (Unlike just vegging and watching Netflix, entering giveaways has the prospect of giving me something back.)

I don’t enter giveaways just to enter giveaways.  Instead, I focus on ones that offer cash or gift cards (though these are the most competitive and difficult to win), ones that have products my kids would like or that would make nice gifts, and ones that offer homeschool curriculum.

If you want to start entering giveaways, deciding what you would like to focus on winning is a good way to limit the amount of time you spend entering giveaways.

Where I Find Giveaways to Enter

To maximize my time entering giveaways, I try to enter ones that have low entries.

I have found some Facebook groups to join where people advertise their giveaways.

Another site I love is Tightwad in Utah.  She lists low entry giveaways that are ending in the next week.

If you’d like to enter giveaways and don’t really care if they’re low entry or not, you can use this link or this link to find linkies for giveaways from a wide array of bloggers.

Finally, if there is a blogger who routinely offers the types of giveaways you’d like to win, make sure to come back and visit the site regularly.  Chances are that entry requirements for the giveaway are to like the site’s Facebook or Twitter pages.  Just do this once, and for every subsequent giveaway on that blog, you’ve already met those requirements.

I don’t expect to get rich from entering giveaways or even to be able to supply all of my kids’ presents.  However, it is nice to get free stuff in the mail, especially if some of it can be used to offset the expense of Christmas and birthday presents.

Do you enter giveaways?  Why or why not?  If you do, how much success have you had?  How much time do you spend entering giveaways?

MelissaB
MelissaB

Melissa is a writer and virtual assistant. She earned her Master’s from Southern Illinois University, and her Bachelor’s in English from the University of Michigan. When she’s not working, you can find her homeschooling her kids, reading a good book, or cooking. She resides in New York, where she loves the natural beauty of the area.

www.momsplans.com/

Filed Under: budget, free money, ShareMe Tagged With: contests, giveaways, sweepstakes

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