Receiving a large sum of extra cash all at once can seem like your wildest dreams becoming a reality. However, most people who are fortunate enough to have an influx of money can get into trouble quickly and end up not taking advantage of their new found wealth. The temptation to spend or give money away may be far stronger than you ever imagined, and it is common for individuals to run out of money before they are able to fulfil their short or long term financial objectives. In order to reduce your chances of spending through a large sum of money, consider following these budget help tips.
Plan What To Do With The Extra Cash
One of the most important factors when it comes to budgeting for a large sum of extra cash is taking enough time to make the right decisions. Planning your expenditure cannot be reinforced enough.
Getting extra cash may seem like heading straight to the shopping centre or your favourite department store makes sense, but spending can quickly get out of control when there is no plan in place. Instead of shopping first, give yourself ample time to make decisions about what you’d like to accomplish. The key is to plan.
If you have large purchases you want to make, conduct the same pricing research you would prior to the influx and wait until you are ready to buy. In the meantime, set your funds in a secure savings account and try not to fall into the trap of lavish spending.
Get Rid Of Debt First
Resolving outstanding debts is a smart idea when you come into money, especially those that assess high interest charges each month. Paying down personal loans and credit cards allows you to utilise the remaining money for the things you want and the savings you need for the long-term. Make sure you are aware of any prepayment penalties before paying off debt, and focus on the highest interest rate obligations first.
Think About Your Future
Saving and paying down debt are both important aspects of budgeting for a financial influx, but focusing on the future is also a necessary task. Knowing what you may need to set aside for retirement or education funding for children will provide budget help and allow you to spend your money more wisely. It is often beneficial to speak with a financial professional to discuss investment options for the long-term before you start making major purchases.
If you have come into a lot of extra cash and are not sure about your next move, the understanding and savvy team at Just Budget can help you create a long-term, manageable plan and provide the budget help you need.