Everyone loves a windfall!

Windfall -- [n] an unexpected gain, piece of good fortune.

Who wouldn't like that?  Whether it's a large windfall like winning the lottery or getting a surprise inheritance, or a small windfall like finding a dollar on the street, I don't know anyone who wouldn't enjoy it.  I know I do!  I haven't won the lottery* but I did recently receive a small windfall.

Windfalls are never planned for.  They can't be simply based on the definition.  But what you can do, and what I find make the windfall even MORE enjoyable, is just like we plan for Murphy's visits, plan for just in case windfalls.  Like a to-do list, make a Windfall Wish List.  I find that like with a spending plan, the money from a windfall doesn't just evaporate and I'm left with happy thoughts of receiving the windfall, but unhappy ones at trying to remember exactly where it went!

Holidays and birthdays are typical times of receiving windfalls.  So I suppose this is a timely posting.  I just received a windfall of $241.11 from various sources.  Part of it was a christmas present, part a give-back from some activities I'd participated in throughout the year.  Here is how I'm dividing up my windfall:

1) Savings.  I really try from all income sources to put SOME of it into savings.  I have a set amount from my salary put into my 401(K) (a minimum amount since I'm still working on paying off non-mortgage debt).  From everything else I try to stash at least 10% (usually up to $50) depending on the source.  Of the gift ($200), I put $20 into savings.  I didn't put any of the $35 windfall into savings, but all of the $6.11 unexpected distribution from my insurance went to savings so that balanced out over 10% of the remainder.  It really is clique to say "Pay yourself first", but it's also really true... and doubly so when we're talking about Windfalls.

Amount of Windfall after Savings:  $215

2) Debt Repayment.  This is a major focus of mine at the moment.  I'm just over a month away from paying off the last of my credit card debt.  This is HUGE for me since at one point I had just one credit card with a $14,700 balance... along with carrying balances on 3 other cards at the same time (plus a car payment, rent, etc.).  So for me, that means a large part of any windfall HAS to go towards debt repayment.  It may mean a small sacrifice now (not going out to dinner, not buying the new video game, etc.), but I just keep imagining what I could do without those debt payments every month (which minus the mortgage last month added up to over $1500).  Of the $180 remaining from the Christmas gift, $155 went towards debt repayment (77.5% of the initial gift). 

Amount of Windfall after Debt Repayment:  $60

3) Giving.  Call it Karma.  Call it Pay It Forward.  Whatever you call it, giving comes back to us.  Money isn't static to be hoarded.  Do some good with your own good fortune and you will be repaid.  I purchased 2 gift cards for the charity donation we were holding at work for the local domestic violence shelter.

Amount of Windfall after Giving:  $50

4) Wish List Items.  This is where having a Windfall Wish List comes in handy.  You've paid yourself first (savings), you gave some of it away (giving) and you've addressed a major life challenge (in my case debt repayment).  If this was planned money, I'd say we should have used it all up and be on track per our spending plan.  But this is Windfall money.  You've been responsible and now you should have some fun with it.  We've all made bad decisions (see earlier paragraph about having over $14,000 in credit card debt to repay) but life cannot be all about punishment for past mistakes.  So maintain a Windfall Wish List and when a Windfall comes... take a small portion and fund something on that list.  Some of the items on my Windfall Wish List include buying a sound system for the tv, purchasing a new pair of riding breeches (want a specific color), and a variety of other "big ticket" items that will take some time to fund.  For this windfall however, I made the choice to fund my part of an upcoming family tradition -- Sushi & Movie day. 

Just like in day to day spending, a windfall goes farther and does more for you if you have a plan.


* I don't play lotteries anymore.  As others have been quoted, lotteries are a tax on poor people and those who can't do math.  I'll write an entry about lotteries at a later date, for now... the possible payoff of playing a lottery compared to the amount of money spent and what that money could be used for simply doesn't make sense to me.