Before You Spend It, Take a Step Back
Whether it’s a bonus, inheritance, tax refund or another unexpected windfall, suddenly having extra money can bring plenty of possibilities.
In this edition of The Money Brief, Reagan is joined by Lisa from enable.me to look at why it can be worth pausing before making any big decisions, and how a lump sum could potentially help strengthen your financial position.
Start With Your Financial Foundations
Before booking a holiday or heading to the shops, take a look at what else is happening in your finances.
High-interest debt, such as credit cards or store cards, could be one place to start. Reducing expensive debt can lower the amount of interest you’re paying and remove an ongoing financial commitment.
It can also be worth considering whether your emergency fund is where you need it to be, as well as any larger expenses you know are coming up, such as home repairs, car maintenance or replacing an appliance.
Taking care of those shorter-term priorities first can give you a stronger base before deciding what to do with the rest.
Think About the Bigger Picture
Once your immediate priorities are covered, consider how the money could help you make progress towards your longer-term goals.
Depending on your circumstances, that could mean using some of the money within your mortgage structure to help reduce interest costs, or considering whether investing aligns with your goals and time horizon.
The important thing is not to rush. A lump sum might feel like an opportunity to spend, but taking the time to look at your wider financial position can help you make a more considered decision.
Want to Make the Most of Your Money?
Whether you’ve received a lump sum or simply want to make better use of the money you already have, having a clear strategy can help you understand your options.
A financial consultation with enable.me can help you understand where you’re at, what you want to achieve and what your next steps could look like.
Watch the Full Episode
Watch the full conversation for more on what to consider when you receive a lump sum, from high-interest debt and emergency savings to your mortgage and longer-term goals.
Disclaimer: The Where’s My Money? podcast and the information shared by host Reagan White and his guests does not constitute individual financial advice. If you’re interested in receiving financial advice, you can book a consultation with an enable.me financial coach. Costs apply.
