The windfall trifecta...

So have you ever been fortunate enough to go to your mailbox and have an unannounced cheque show up! Cha-ching - you may be thinking, but what do you do with money that you were not expecting? It could be a rebate from your insurance company, a gift from Auntie Erna, or whatever, but sometimes luck changes and you get a little break (or a big break). How to deal with the money is what I call "The Windfall Trifecta." This is a way to keep you happy without just blowing the money. Basically allocate all windfalls (no matter the size) into 3 components.

a.) Debt - If you have debt you should put some money on there. Unless you are in dire straits putting the whole windfall is likely unsatisfying as you will feel like it never really happened. Especially for gift money. However, we must remember to give our debt monkey a little extra and loosen up our debt load a bit.

b.) Savings - Debt or no debt, save some of that money. Even if only $5 put that little gold nugget into a high interest savings account for a rainy day. It may not seem like much, but a few $5 allocations with a decent interest rate could amount to an emergency car repair very quickly. Plus, think how nice it will feel not to charge something unexpected.

If you have no debt, you can either double up the savings component or split between savings accounts (ie. emergency fund and your vacation fund)

c.) Spend it!! - Yeah, you heard me. Even a cup of Starbucks can really make your day if you have been diligent with your debt repayment plan. Besides, you only live once and if you put every cent away you'll never enjoy yourself. Grant yourself a little pleasure and it will take you much further and recharge your batteries for the uphill debt fight.

Note: Just because there are three categories does not mean that you need to split the money 3 ways. If you are drowning in your debt, it may be worth it put 75% or more on your debt, with a much lower amount allocated to savings and spending. A good key concept for windfall success - the spending amount should never be higher than any of the other two categories.

If your windfall is particularly big, remember to take the time to assess what you really need/want in the spending category. When you are dealing with bigger bucks, making wiser decisions will relieve some future cash strain while still feeling satisfying.

Cards to pay off - 3
Extra earned this month - $100 - Yep I did it, and with hardly a day to spare!!! The remaining $31 dollars came from a combination of my change jar, money in purses/wallets I hadn't used for a while (a whopping $17.43), and I returned an item that I had charged on my credit card (item was actually $21, but I figured that one was a stretch so I will only take credit for the remaining amount needed for September).

Note: Getting my mitts on $100 was really hard. I will definitely have to get creative in the next few months.