Like most people, you likely live your day-to-day life with a set budget and financial goals. Your projected finances can seem like they’re uprooted entirely when you experience a financial windfall or the unexpected reception of a large sum of money.
Here are a few common ways you can experience a financial windfall.
Selling a Business
When you sell a business that you’ve owned, you can experience a financial windfall when it ends up being worth much more than you anticipated. Developing and working on your entrepreneurial business for a long time can cause you to become absorbed in the cost of your business.
You might not always remember how much your business is worth. You also might not realize the potential that your business has, especially in the eyes of an experienced and financially secure investor. When you sell your business, you might end up with a financial windfall that you have to decide how to manage.
Receiving an Inheritance
Another financial windfall that you might experience during your lifetime is the reception of an inheritance. When a loved one or close family friend dies, you might be surprised by the large, valuable inheritance that they’ve left behind for you in their estate planning. Knowing how to appropriately manage and use an inheritance can be difficult, especially if you’ve never had a lot of financial freedom or flexibility.
Your financial windfall from an inheritance also might not always come in the form of money. Instead, you could receive valuable assets or possessions that you need to decide how to use. For example, you could inherit the home of a loved one when they pass on. While this can be a valuable asset, you might not have the time or money to take care of an inherited home at this point in your life. Many people choose to quickly sell an inherited home so they don’t have to deal with repairs.
Large Bonus or Raise at Work
Perhaps a more common type of financial windfall is receiving a large bonus or raise at work. Not everyone has a business to sell or a large inheritance to gain, but many individuals receive bonuses or raises at work from time to time. This could come as a reward for your hard work and contributions to the business that employs you. You might also receive a commission bonus or an end-of-year bonus depending on your accomplishments. When you’ve been living on a set budget for quite some time, you might wonder how to best use your large bonus or raise at work. Here are some smart suggestions on how to use your work bonus that could help you with your financial needs in the future.
Remember, if you’ve experienced a financial windfall unexpectedly, use your best judgment to manage that money. You can use the funds from a financial windfall to invest, pay off debt, boost your emergency savings, improve your retirement fund, make a needed purchase, and more. Using the money to make intentional, careful financial decisions will help you to feel secure and satisfied.
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