All of us have, at some point, imagined what it would be like to have a sudden influx of cash – a financial windfall. But if it happened to you, would you know what to do with it? Sure, we all know how we’d WANT to spend the money… but do we know how BEST to spend it, so that we can not only have some fun with it, but make it last well into the future?
Several years ago, I helped an employee of one of my client’s companies put a comprehensive personal insurance plan in place. In addition to the group benefits her employer and I had implemented, I added personal life, disability and critical illness insurance for her and her family.
About two months ago, I met with her for a review… and it turned out that her husband had suffered a stroke. Luckily, it was covered by her critical illness insurance. Their claim was paid successfully, and the family was delighted.
Before they received their money, I met with her to discuss how those funds might be used in the context of their current and potential future financial situation. I wanted to make sure that this windfall did what it was designed to do – put her family in a secure financial position, despite the loss of her husband’s income.
Like most of us, she had a million uses for the money – she just wasn’t sure what her best move would be. Should she use it to pay off her mortgage? To reduce debt? To renovate the house? And what about fun stuff, like a family trip?
I showed her how all of the various uses for the money integrated with one another, how they might be prioritized, and what could happen down the road depending on her decisions in the present. We ended up with a plan that took care of some immediate debt, solidified her family’s future financial stability… and allowed for a few well-deserved tropical vacations!
So what would you do with a financial windfall? When it happens, we owe it to ourselves to have some fun with it today, but also to make it last far into tomorrow. And knowing how all of our financial pieces are integrated and work together lets us make informed decisions – and turn a windfall into a future.
PS: Thanks to all of you who have sent referrals our way. We appreciate your confidence in us.