April 15, 2024Making the Most of Financial Windfalls

What would you do with an extra $1,000? What about $10,000? Or $100,000?  

You’ve probably spent time daydreaming about what you would do if you suddenly received an unexpected financial windfall. Maybe it’s a significant work bonus, an inheritance, a lawsuit payout, or even a surprisingly large tax refund.  

As you begin to envision what you could do with the extra money, it’s easy to get caught up in the excitement. Your heightened emotions can quickly get the best of you, leading to frivolous spending. However, managing financial windfalls like these wisely requires far more than impulsive decision-making. While it can be fun to treat yourself, it’s important not to lose sight of the potential impact these funds could have on you and your family’s future. 

Tips for Successfully Managing Unexpected Funds 

Coming into a significant sum of money, whether expected or not, will test your willpower. The urge to splurge will surely be there – after all, treating yourself isn’t bad. However, small purchases add up quickly. Before you start daydreaming about how to spend the money, consider the following tips. 

  • Take a Breather 

The initial rush of receiving unexpected funds can undoubtedly cloud your judgment. It’s critical to resist the temptation to rush into using the funds – even if you’re facing financial hardship. Instead, take a step back to let your emotions settle so you can assess your situation with a clear head. Allow yourself the time to think strategically and create a plan for how to utilize this money best.  

  • List Your Goals & Challenges 

Before making any decisions, take time to list your financial goals in the short, mid, and long term. Consider any existing challenges you face and evaluate how a portion of these windfall funds could alleviate strain or help you achieve objectives. By aligning this money with your unique goals and challenges, you ensure that every dollar contributes meaningfully to your financial well-being.  

  • Understand the Potential 

While pursuing your dream vacation could be good for the soul and indulging in luxury purchases may seem enticing, thinking beyond immediate gratification is crucial. Instead of the funds disappearing on a whim, consider investing the money in a way that can have a profound impact on your future. Whether it’s purchasing your dream home, funding your children’s education, or financing your golden years after retirement, making wise financial decisions now can pave the way for long-term prosperity.   

  • Avoid the Urge to Splurge 

While treating yourself or your loved ones with a portion of your windfall is perfectly acceptable, moderation is key. Strive to take a balanced approach by allocating a reasonable percentage to present desires while prioritizing most of the funds for future financial security.  

Wise Ways to Use a Financial Windfall 

Coming up with ways to spend money you weren’t expecting is the easy part. Finding ways to spend it strategically to better your financial future requires a little more effort. Decisions on how to utilize these funds could have a profound impact in the years to come. 

  • Build Your Savings 

A healthy savings nest egg serves as a financial safety net, providing peace of mind and protection against unexpected expenses or financial emergencies. Aim to set aside three to six months of living expenses in a readily accessible savings account.  

Leveraging a cash windfall to construct a solid savings foundation involves exploring diverse investment avenues, with share certificates standing out as a prudent option. Instead of letting the cash sit idle, allocating a portion towards share certificates can foster disciplined savings habits while generating favorable returns.  

PEFCU has a brand-new share certificate option at 5.25% APY* for 13 months! Click here for more information and to open an account. 

Share certificates offer a secure investment vehicle with fixed interest rates and predetermined maturity periods, making them an attractive option for risk-averse investors seeking stability and steady growth. Moreover, reinvesting share certificate returns upon maturity can compound savings over time, amplifying wealth accumulation potential. 

  • Eliminate Debt 

One of the most impactful uses of a financial windfall is paying off high-interest debt. Whether it’s credit card balances, personal loans, or outstanding medical bills, reducing or eliminating these debts can free up significant financial resources in the long run.  

That’s more money you get to put back into your pocket monthly – rather than spending it unnecessarily on interest and having nothing to show for it in return. Eliminating high-interest debt will not only save money on interest payments but also improve your overall financial standing. 

  • Invest It 

Consult with a financial advisor to develop a strategic investment plan tailored to your unique financial goals and risk tolerance. Whether you choose to invest in stocks, bonds, mutual funds, or real estate, a well-diversified investment portfolio can provide long-term growth opportunities and financial security. By harnessing the power of compound interest, your windfall, no matter the size, can grow into a substantial asset over time. 

We’re Here to Help! 

Receiving a financial windfall presents a unique opportunity to improve your well-being and secure your future. By strategically managing your newly acquired funds, you can make the most of this unexpected money and achieve long-term goals. 

If you want to learn more about growing your savings or eliminating high-interest debt, we’re ready to help. Please stop by any of our convenient branch locations or call us at 800-226-6673 to speak with a team member today. 


Each individual’s financial situation is unique and readers are encouraged to contact PEFCU when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.  

*Annual Percentage Yield (APY) accurate as of 04/15/2024. Rates subject to change without notice. 5.25% APY is only available for members with a minimum account balance of $1,000. For complete details view Share Certificate rates on our website at pefcu.com and access all account disclosures. For all Certificate products, the APY assumes dividends remain on deposit until the maturity date. A penalty will be imposed for early withdrawal. At maturity, the 13-month share certificate will automatically renew as a 12-month share certificate at the then-current rate and terms. Dividends are credited quarterly. Membership qualification required.

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