Every once in a while we hit the jack
pot. {I am not
referring to your Las Vegas winnings.} The jackpot is your employment
bonus and tax refund which drop in your lap. How will you spend
yours? No doubt your windfall can be spent ten times over ~~ the long
awaited vacation, the new big screen television, or the new set of golf
clubs. Since I am not one to spoil a party, because I love
a good party, I suggest you tread wisely. When you think seriously, this
windfall can also give you peace of mind. Peace of mind comes in the form
of paying down student loans, topping up RRSP contributions, saving for children’s
educations or paying off credit cards. What should you do? With so many
directions to travel on the road to financial success, choosing the right one
requires discretion. This starts with
reviewing your goals, dreams, and aspirations.
Here’s a thought. In previous blogs, I referred to having three
worlds: the past, the present, and the future.
These three worlds are connected to the debt you incurred from the past,
the lifestyle you want to enjoy in the present moment, and the savings you
require to retire comfortably in the future.
To adequately meet the demands in each world, you need to divide your
jackpot equally. You don’t have to choose one over the other (unless you want to
do so.)
Here is an example.
With a tax refund of $1,500, a top-up
payment of $500 is applied to your credit card.
The new television purchase is $500 and the remaining $500 is deposited to your Registered Retirement Savings
Plan (RRSP). Using this logical approach
allows all your goals to be met with the extra cash.
To ensure you are achieving your goals
and living within your allotted income, you may wish to refresh your memory by
reading “Why Do I Need A Budget?"
Because life happens, your budget should be revised annually to
accommodate any changes. “Get Smarter About Money” provides useful tools and
information when it’s time to review your budget. Click here to access this website.
Now it’s your turn to think about what
you will do with your windfall.
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