budgeting unexpected money?

[livingalmostlarge]

What happens if you came into unexpected money? Save? Spend? Give? Gift to kids? What do you do?

 

[RobbieB]

I do whatever I want to do. You should too!

But, I have to add that I've never had a budget and never will. Full disclosure -

 

[Major Tom]

It would depend greatly on how much it is. If it were many millions, I'd have enough to do all the things you say. If just a few thousand, I'd have to be a lot more selective. Why do you ask? Has this happened to you?

 

[freedomatlast]

I'm adding to my cash cushion to help ride out the unstable market and will be purchasing a couple of vehicles when the price insanity stabilizes.

 

[OldShooter]

What does your IPS say?

 

[corn18]

I'd invest it per my ISP (or RSP whenever I get around to writing it).

 

[travelover]

I'd give it to a nice guy like me. I'll PM you my address. A check is fine.

 

[NW-Bound]

I came into unexpected money the last couple of years, due to the largess of the market god that is.

I just let it build up in my accounts.

The market god may take it all back. Should I spend it before she does?

 

[brett]

I do whatever I want to do. You should too!

But, I have to add that I've never had a budget and never will. Full disclosure -

Ditto.

 

[daylatedollarshort]

We're spending it on major items like home improvements we would normally space out, and gifting the rest to family. Our withdrawal rate is almost zero, since we are both on SS and pensions, so there is not much need to save more these days than our reinvestment income. Houses are really expensive here so I'm sure the kids will appreciate some extra cash now and not have to wait until we have both passed on.

 

[BuysToys]

We are also doing a series of home projects. Our primary expenses are covered by SSDI and DH's pension. We take a withdrawal from his IRA every year to do a major project. We only have a couple more to do. Once we're done, the withdrawal will probably just go into the taxable account.

 

[rwdflynavy]

We are working through the inheritance of my MIL passing in 2020. We inherited an annuity that we've been slowly cashing out to spread the taxable portions across tax years. We put most of it in VTSAX with some divided up for our kids per my MIL wishes, we give ourselves some spending cash for fun and save some for upcoming home projects.

Her trust was complicated by her bank/financial advisor not following through on her requests, so some of the funds/accounts aren't "ours" yet, but we'll have to work through Trad IRAs, Roth IRAs and other accounts in the next few years.

 

[racy]

Give a 1/3 to the governments.

 

[athena53]

I've posted on this before but when Dad died in October of last year after 18 months in LTC he left $1.4 million, which I split with my 4 siblings. It was totally unexpected and I don't need it. My numbers were fine before that. (RIP, Dad, and thanks to you and Mom for teaching us LBYM and how to invest.)

I'm giving it away over the next 10 years- my grandchildren's 529s, charity, direct gifts to DS and DDIL, possibly a vacation with them somewhere such as Costa Rica when the youngest (currently 2-1/2) is old enough to remember. That way I can still pivot if things change for me.

Most of it was liquidated before being transferred to our Fidelity accounts and I keep trying to throw $20K or so in every once in awhile when I think the market has hit bottom. So far that hasn't worked so well.

 

[pacergal]

What happens if you came into unexpected money? Save? Spend? Give? Gift to kids? What do you do?

Depending on the amount, I would do all of the above, except save would probably be last on the list, as I believe we have enough.
Unless it is >a million!

 

[audreyh1]

What happens if you came into unexpected money? Save? Spend? Give? Gift to kids? What do you do?

It's a good time to reevaluate your priorities and needs.

This is going to be different for everybody.

If you don't have a long term financial plan including retirement, then this is a good time to develop one. That will help guide you.

 

[Sunset]

We aren't the type to just blow it on something because a pile of cash showed up.

An inheritance just went into DW's sole accounts and added to her cash and investments.

If we want/need something we would buy it regardless, but not in a wasteful way.

 

[TheWizard]

I'm close to completing my ninth year of retirement.
I have retirement income coming in three times a month, much of which is excess to my needs and gets invested into stock index funds after all bills are paid and my checking account is at my target ($10k).

So if additional "unexpected" money came my way, it would be handled similarly...

 

[TheWizard]

We aren't the type to just blow it on something because a pile of cash showed up.

An inheritance just went into DW's sole accounts and added to her cash and investments.

If we want/need something we would buy it regardless, but not in a wasteful way.

I totally agree with your approach to handling finances...

 

[disneysteve]

We aren't the type to just blow it on something because a pile of cash showed up.

An inheritance just went into DW's sole accounts and added to her cash and investments.

If we want/need something we would buy it regardless, but not in a wasteful way.

This is us exactly. We buy what we buy and spend what we spend because that's how we live. Handing us a pile of money won't change that. We won't suddenly buy something we weren't already going to buy just because the money appears.


That doesn't mean we wouldn't do a little something special, like a nice dinner or show tickets, but it would be just a token expenditure, not a BTD type of purchase.

 

[rk911]

What happens if you came into unexpected money? Save? Spend? Give? Gift to kids? What do you do?

all of the above! (well, we don't have kids so add donate to charity to the list)

 

[Lienlord]

Throw it on the pile! LOL

 

[jollystomper]

When we were working and in the accumulation phase, our approach was to save/invest 80-90% of it, and Blow That Dough on the rest of it.

In retirement, we would probably spend it but not rush to do so. Just save or invest it, we either go the BTD route on some of it, or it gets absorbed into whatever we leave for the kids or charities. If our kids have a specific need we would gift some of it to them now. Or to a charitable situation or cause.

 

[Bryan Barnfellow]

I would consider helping my family (a sister, a BIL) more and upping my contributions to charitable causes. There is such need in the world right now.

-BB

 

[W2R]

What happens if you came into unexpected money? Save? Spend? Give? Gift to kids? What do you do?

Unexpected money is like any other money! I'd put it in my portfolio and invest according to my asset allocation. That is what I have done with unexpected large sums in the past.

For some people (not necessarily you, or any particular person here, but for some people) giving money away can be an excuse to avoid the decision about what to do with it or it can have other subconscious motives. So, that merits some thought if you are leaning towards giving it away.