11 Smart Ways To Use a Windfall

Did you get a significant gift or a windfall? How are you planning on using it? Here are some great ways to use a large amount of money. 

I remember when we got out stimulus checks in 2020. Whatever your fears regarding inflation or government overspending, etc., it sure is nice to get some extra cash deposited into your account.

We used our stimulus money to give some to charity, add to our Life Happens fund, and the rest is for Passover expenses. What are you doing with yours?

It got me thinking about what I would do if I got a sudden large amount of money: a gift or a windfall. What would be the smartest way to use the money?

11 Smart Ways To Use a Large Amount of Money:

1. Give to Charity.

I give 10% of all my income to charity, including this money. When we are lucky enough to get “extra money,” I try to remember those who are even in more need than us. I believe that you should use your money to help people. That means that you have a moral obligation to help people less fortunate than you. This involves giving charity to those who need it. If you can, give as much of your windfall as possible to the people who need it the most.

2. Pay Off Debt.

If you have a lot of debt, then paying off a chunk of it can help you climb out of debt sooner and perhaps lower your monthly payments. First, tackle the debt that is the most predatory (or weighing on your mind the most). Then you can decide whether to pay off the highest interest rate first or pay off some smaller debts in the avalanche method.

3. Start Saving $1,000.

Saving $1,000 is a game-changer. Many Americans do not have that kind of money put away. Do this, and you will be ahead of the game. Your financial future will change. (Need inspiration? Join the $1,000 Savings Challenge)

4. Stock up Your Life Happens Fund (aka Emergency Fund).

I love having a fully-stocked Life Happens fund, even though it does not stay fully stocked for long. 3-6 months of expenses for your Life Happens (aka Emergency Fund) is the suggested rule of thumb, but obviously, this should be tailored to your particular circumstances and risk tolerance. Nevertheless, having an emergency fund is one of the smartest things you can do for your continued financial stability.

5. Save for Retirement.

You may not be able to use this money as earned income, so you cannot put it into accounts where earned income is required (i.e., Roth, etc.), but you can use other money to fund those accounts and “pay yourself back” with the windfall money. So choose the best retirement account for you and get started! Don’t forget: the earlier you start saving for retirement, the better off you will be!

6. Invest Your Money.

Take some of the windfall money and invest it. Index funds are a crowd favorite and are generally not incredibly risky. If you are brand-new to investing and unsure how and where to start, check out this straightforward guide on How To Invest Money Like A Boss (8 Steps To Start Investing).

7. Invest in Yourself.

Take a course. Hire a mentor. Buy a book. Go back to school. Take some money and invest in the most important person: yourself. The dividends will be worth it! If you need some ideas of the best ways to invest in your mind, body, and soul, read this: 20 Meaningful Ways to Invest in Yourself. 

8. Save for Your Kids.

Whether you decide to start or contribute to a 529 or save for your kid’s future in another way- put some money away for your kids. They will thank you for that foresight one day! (Well, hopefully!) Setting up your kids for a financially stable future is one of the best gifts you can give your family.

9. Buy Something That Will Save You Money.

There are times when buying something more expensive can save you money in the long haul. This is a problem for poor people who often can’t afford an initial purchase to save them money. Some examples include a good computer, a second freezer for storage, an instant pot, etc. I’m sure you have many ideas! Take this “extra money” and buy one of these items to help you save more money later.

10. Future Budget Planning.

Do you have any significant expenses coming up? A baby on the way? A car about to break down? A lease that is ending? Start Future Budget Planning and put some money away to prepare for these exciting yet expensive life events. Being prepared for life’s financial adventures means that they won’t catch you off guard.

11. Improve Your Life.

Is there something that you want or need that can improve your life? Money is a tool that can and should be used to enhance your life and make your life easier and better. After all, what is the point of money if we cannot spend it? Do your best to support small businesses that can use the infusion of cash and shop responsibly. You will be helping the economy grow and assisting a store owner. Win-win!


Hi! I am a millennial mom with a passion for personal finance. I have always been “into” personal finance but got inspired to start my blog after a period of extended unemployment. That experience really changed the way I viewed my relationship with money and the importance of accessible personal finance education.

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