With potentially the highest housing prices and living costs in the world, many Canadians seriously struggle to afford steep mortgage and utility payments. Because of this, millions of people find it almost impossible to save any money, leaving them with a huge problem if a sudden expensive payment was due.
So, when a cash windfall comes through from something like inheritance or a tax refund, the temptation to go crazy and mindlessly spend can be overwhelming, simply because you may have never had that luxury before. But despite temptation, it’s important to get the balance right between being sensible and treating yourself. After all, regret is one of the worst feelings to experience and, if you look back and seriously regret how you spent the money, you’ll be left feeling very miserable. So, if you’ve just received a sudden cash windfall or are soon-to-be expecting one and want to ensure you make the right decisions, here are a few pointers to get you started!
Pay any outstanding debts or bills
Whilst it may be tempting to head straight to your favorite store and buy everything you like, taking care of the important stuff first is crucial. Establishing exactly how much you owe and paying it all off will not only give you a great sense of satisfaction but will likely reduce how much you would have owed as many debts gain interest the longer you leave them.
If you’re in the fortunate position of not having any debts or outstanding bills to take care of, brilliant news! But it’s always good to remember that anything can happen at any moment, so try to keep some saved just in case you end up having to take out a loan in the future.
Make lists of what you’d like to buy
Once all your debts are cleared, now is the time to start treating yourself and your family. But before rushing ahead and mindlessly spending, try making a list of everything you’d like to buy. Then, once you have your final list, identify the pros and cons of each one and establish which is most worthwhile.
If you’re choosing between an expensive vacation or luxury car like the Chrysler 300, which one is likely to benefit you the most in the long-run? Probably the car. Making decisions based on this principle is a great way to ensure you spend wisely whilst still buying what you want.
Don’t buy for the sake of it
If after clearing your debts and buying all worthwhile luxury items you still have a substantial amount of money left over, don’t just spend for the sake of it! Keep it safe in a deposit account to ensure you don’t mindlessly waste it.
Whilst receiving a sudden windfall of money is hugely exciting, it’s important not to go off the rails with it. Remaining sensible and getting the spending balance right will ensure you use your money in the most worthwhile, beneficial way possible!