At times, some of us are lucky enough to get some money. This could be an inheritance, jackpot win, gift, refund or bonus, perhaps. When we get a chunk of money like this, we will need to think about what we want to spend it on. We will have a lot of different options and which we choose will be a very personal decision. However, it can be worth thinking hard because the choice that we make could have a considerable impact on our financial future.
Pay of debt
If we owe money then it can make sense to start by using the money to repay that debt. The money we owe will be likely to be accumulating interest and if we repay it, we will save a considerable amount. This can make a big difference. It can feel really boring to use money like this to pay off a debt. It can almost feel that we get nothing back in return as well. However, it is worth thinking about all of the benefits of repaying the debt. We will not have to make those regular repayments anymore and we will not be being charged for the debt. That money that we no longer have to pay out we could be using to save up and accumulate some money, so it will not go to waste at all. It can also feel really good to know that we have repaid our debts and that we do not have this hanging over us anymore.
It can be a good idea to save some of the money for the future. We never know when we might need a bit of extra money and it an give a sense of security as well. It can help because we know that we have some money to fall back on in an emergency. So, if we get an unexpected bill or some other reason to need money, we know that it will be there for us to use. It will mean that we will have it there to use immediately rather than having to use a loan from a provider such as Omacl.co.uk to pay for whatever it is that we need money for. Savings interest might be very low, but having some in an instant access account can be handy. However, you may also want to tie some up in a notice account or a fixed rate bond so that you get a better return on it but can still get hold of it if you need it.
When you invest money you actually buy something with it in the hope that it will increase in value significantly by the time you want to sell it and get the money back. This is often stocks and shares where you are buying part of a company or multiple companies hoping that they will prosper and increase in value so your share becomes more valuable. However, you may also choose to buy a house, art, antiques, currency or other things that you hope you can make money from. Investments are risky though as the item that you buy could go down in value as well as up. In fact, you will find that most items go up and down in value and so it is wise to hold on to investments for a significant amount of time, such as at least a decade, to ensure that the fluctuations in price are smoothed out and hopefully it has increased in value. It is a risk though as there will be some things that will not increase in value and some will decrease. You may even lose all of your money if you invest in something really risky.
Another alternative is to spend the money. It can be the tempting thing to do. You might want to go on a holiday, leave your job and live off the money, buy a bigger home, new furnishing and electronics. This is something which is commonly done but the problem with it is that the money then runs out. It is spent and might even be forgotten about pretty quickly. So be careful if you do decide to spend it and think about whether what you are buying is worthwhile and will last or whether you will end up with lots of items that break or get out of date and nothing really to show for the money.
There are pros and cons to all of the options so it is worth thinking hard about what to do. It is wise to put the money in a safe savings account to start with and then think hard about what option you want to go for. It might be wise to take a risk with some of the money but not all of it. You may want to spend some of it but try to keep some in case you need it for the future.