Plan Ahead. Get Ahead. > Managing Your Money > Saving
What to Do with a Windfall
What could be more fun than having a little extra cash fall unexpectedly into your lap? It might be a tax refund, a small lottery prize or an inheritance. Whatever the source, take a moment to think about how you could best use that money. Here are some ideas that may multiply the value of your money:
- Pay off debts, especially credit card balances that carry high interest rates and may be hurting your credit score.
- Contribute to a Roth IRA if you're eligible. Your contribution can grow tax-free for use in retirement.
- Set up an emergency fund with enough money to cover three to six months of living expenses.
Sure, none of these has the instant gratification of a new car or a strategic addition to your wardrobe. But, believe it or not, you'll benefit from these moves long after that car is a faded memory.
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