Newsletter: Do This With Your Cash Windfall Before It’s Gone

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Welcome to the FI Mastery Journey, a weekly newsletter where you receive actionable ideas from me to help tame financial chaos, get your financial house in order and live your legacy.

Here’s how it works: each week, you’ll receive one article written by me. You’ll also get three simple questions that go along with the week’s article to help jog your mind and inspire you to take small, bite-sized financial wellness actions.

And, you’ll also get an inside look at the research I’m reading.

Follow along for one year and you will have completed all the work necessary to keep your financial house in order.

My goal in all of this work?

To provide you with the tools, resources, and insights to help you take one step closer to becoming the master of your own financial independence journey.

This Week at a Glance

Windfall regret sucks. It’s that feeling of spending through a tax refund, bonus check or vested stock award with nothing to show for it. The good news is that you can avoid this outcome. This week I’m sharing a simple approach to securing your windfall and giving it a purpose.
Volatility is back as US stocks experienced their longest losing streak this week since January. On Wednesday, equities fell for a fourth straight day, with the S&P 500 extending a drop from its all-time high to more than 4%. A strong first quarter rally coupled with geopolitics, rates, inflation and Fed hawkishness are giving traders reason for caution.
Last year, the IRS owed $1.3 billion to people who had made tax filing mistakes. Don’t be one of those people this year. Even if you’ve already filed your return, last week I discussed how taking a few short minutes to check for mistakes could save you thousands.

Windfalls are Waypoints, Not Endpoints

Have you ever suddenly come into a large sum of money, and just like that, it’s gone?

Well, you’re not alone.

That’s because when I was a kid, I often made money by helping my dad at his auto body shop during the summer.

Now, for all of my toil, my father was kind enough to give me $50 for my trouble.

And, you know, back then $50 bucks was a lot of money.

And so, payday eventually came, and the night before, I’d lay in bed imagining all the things I could buy at the mall with what

seemed to me like a big windfall.

Now, this was years before I learned to put money away and save prudently for the future.

Even so, all I knew then was that I had money that was burning a hole in my pocket.

Sure enough, a few days after receiving my paycheck, I spent it on Mexican Hot Chocolates, Ice Cream, Soft Pretzels, arcade

games, and useless knickknacks from one mall store or another.

Just like that, in a day or so, fifty dollars was gone.

And to add insult to injury, I was left with shopper’s remorse.

Maybe you’ve felt that way before too, right?

Well by that point, the excitement was gone, and I wished that I had done something more meaningful with my windfall, like buying a videogame or a book to keep me occupied throughout the summer.

Now, have you ever felt disappointed when the excitement from spending a windfall wears off?

Or maybe you’ve felt discouraged after spending through a tax refund, a bonus, or a vested stock award?

Either way, you likely know that not having a purpose for a financial windfall can open the door to frivolous spending, and hence, regret.

How to Avoid Windfall Regret

That’s why, when you receive a windfall, you should create a plan for how that money will amplify your life goals.

Because if you don’t, you’ll likely impulsively spend it, leaving you with not only the guilt of overspending but also the conflict of letting down yourself and your loved ones.

Here’s how to do it:

Step #1: Plan to Move the Money

Whether it’s a tax refund, bonus, or vested stock award act quickly to secure these funds by moving them to a less accessible account. This step allows you to reflect and plan without the immediate pressure or temptation to misuse the funds.

Ask yourself: “What steps can I take to protect this money from regretful use?

Then, plan to immediately transfer any windfall into a trusted savings account as soon as you receive it. By acting quickly, you protect your future plans from being undermined by external pressures or fleeting desires.

Step #2: Revisit Your Long-term Savings Goals

It’s essential to reevaluate your long-term savings goals following a windfall. That’s because clear, well-defined goals ensure that how you use your windfall aligns with your life’s ambitions and values.

Ask yourself: “Will my great-grandkids be proud of my money choice?”

Identify the key values, impacts, and support structures you want your wealth to facilitate. This approach not only structures your financial planning but also ensures that each step you take is intentional.

Step #3: Immediately Put Your Plan into Action

When you receive a windfall, immediate action is crucial. Don’t wait for the money to burn a hole in your pocket. Take prompt action now by allocating your funds according to your predefined plan and goals.

Ask yourself: “Where can I apply the money today so that I’m not just waiting to act?”

Put your plan into play if you’ve already received your windfall. Start by moving your windfall to a safe account. Then, begin paying down debt or topping up savings according to its purpose.

I talk more about this approach in this week’s article >>>

And be sure to check out this one-page checklist for managing your windfall here >>>

What I’m Reading

We’re all busy in the daily rush of things. That’s why I’m sharing a list of articles that I’ve read this week to help you stay on top of your own financial independence journey.

I’ve consolidated all of these links here for your ease of viewing.

The Curse of Mental Accounting
The Surprising Link Between Guilt and Overspending: Does It Cause You To Waste Money?
How to Get Over Spending Guilt
Here’s Why Lottery Winners Go Broke
Why Do 70 Percent of Lottery Winners End Up Bankrupt?

Thanks for taking a look!