We all like the idea of getting a bonus injection of cash, wherever it might come from. While it may not happen too often, this fact in itself means when it does come, it can result in some troubling questions. Do you spend the money or do you take the opportunity to save it?
Here are the options and thoughts for each option.
Spend it
This way of thinking has you believing the money was unexpected; therefore you would simply have gone on without it just as you did before. There is a lot to commend this idea, because it shows you have the power to understand life is for living, and not just for saving (in terms of money).
Therefore you could simply enjoy the extra $1,000 in this example, and look forward to treating yourself to a few things. It could be something for the home or perhaps a holiday. Whatever it is, you can be sure of enjoying the spending streak.
Save it
This school of thinking is not dissimilar to the one above. Basically the idea is you didn’t know the money was coming, but you now have a chance to bump up your savings or perhaps start a savings account you didn’t previously have.
If the latter is the case, you can see it would be commonsense to put some cash away to provide you with a cushion.
Fifty fifty?
This is another idea that might be worth considering if you’re not sure which way to go. Some people would argue you could have the best of both worlds, having $500 to spend while putting away the same sum in a savings account for the future. This means you still get to enjoy the fact you’ve had some bonus cash coming into your life.
Obviously a lot will depend on your own financial situation when you get the money. If you have plenty of cash set aside already, you may decide to enjoy it and go for option one. Alternatively if you have little to no savings and it would mean a lot to you to have them, this would be the smarter choice. Some people will want to get that protective cushion if they don’t already have it. You can see how it depends on the individual as to whether it makes sense to go down one route or the other.
However in all situations, the best route to take initially is to hold off on making any major decisions. Give yourself time to think about what would be the best thing to do with the money, whether you want to follow one path or the other or to go for a bit of both. When you have the time to make the right decision, you’ll know you have done the right thing. The worst thing would be to spend it all in a splurge and then wish you’d invested it instead. That would feel like a missed opportunity.
