If you’ve ever been lucky enough to come across some unexpected cash, then you would know how difficult it is to resist the urge to splurge. But, advises Jason Garner of ACSIS, “while winning an additional sum of money is a reward on its own, how you choose to spend it will result in the real benefits”.
Before you indulge in that huge LCD flat screen, consider these insightful tips:
• Get in touch with a reputable financial institution or advisor who will be able to school you on your options.
• Plan how best to allocate the money before immediately spending it on impulse. (link to a how to budget story)
• View the sum of money as an opportunity to become even wealthier, instead of immediately going bos.
• It is crucial to reinvest the money where it will provide the greatest financial rewards. This will obviously vary, depending on your future plans and goals, and by the amount that is available for you to put away.
• Think long-term, no matter how big or small the sum of money is.
• With interest rates at an all-time low, the interest generated on savings is also considerably lower. This means that if you received a smaller sum of money, such as R10 000, you will benefit more by paying off debt with a high interest rate, such as a credit card overdraft.
Here’s an example on how to plan accordingly before allocating your money.
Do you have any advice on saving (and spending) "new" money? Share your thoughts in the comment section below.