#57 Windfalls and Nest Eggs

They are definitely connected!  Understanding both – and their possible positive potential – can make measurable differences in your financial life!

Having a formula, some disciplines and a plan for money to reserve may sound like an old fashioned homily, but savings don’t just happen – savings accumulate by determination and repetition.   When an unexpected “windfall” drops into your hands, it can be added to your existing reserves, or it can be a beginning to what you may have been intending but never quite got around to: some savings!

Windfalls have several sources! A simple one might be an unexpected raise in pay, or an unexpected bonus!  The key determinator here is “unexpected.”  We all know how easily it can just disappear into the cash flow that’s already flowing!

But, wait a minute.  Before it happened, you were probably making ends meet, one way or another, right?  Well, you now have an opportunity to treat a Windfall differently.   You can add it to existing savings; or, if you don’t have any, you could start to create your Nest Egg! 

Other Windfalls are moneys we are familiar with that could be infused with some new magic!   That tax refund you are expecting is probably already earmarked for something wanted (or needed).  Why not add half to the Nest Egg?  Rebates are anther kind of bonus source that you could route to the reserves.  Some folks (knowingly or unexpected) may be in line for an inheritance; large or small, it’s a great opportunity for that “future fund.”

We all have gotten Windfall money in the form of gifts – another opportunity and another temptation!  If you aren’t a saver already, it can be a tough discipline to develop and manage.  So, when any of these Windfalls occur, and there is no existing Nest Egg fund, there’s opportunity to start one.   Just begin, and hold onto it for a future big ticket something – like buying a home of your own!

It can help you to build your Nest Egg if you open a separate account just for savings, not for current, regular cash flow needs.   And, it helps if you redirect those Windfalls into your Nest Egg account at the time you receive them!  Most important, don’t keep your Nest Egg in a stupid place – like at home under the mattress or in a sugar canister!  For more than one reason...  If it’s easy to access those funds, it will be easy to rationalize using those funds... just this once!  Another reason is theft – it happens. 

How you manage your savings is important.  And, some facts might surprise you.   It might seem like a good move to do so, but don’t pay off all credit card debt at once – you need to be able to show a future Lender a well-managed credit path.  Try to avoid big splurges that would reduce your ability to make a healthy down payment on owning your own home!

If one of your dreams is to own your own home, talk to a Mortgage Lender.  There are some creative ways to move that dream closer in time.  With a Mortgage Lender, you can speculate on the kind of home you have in mind and its projected price.   Your Lender can approximate the difference between your present monthly rent and a probable future monthly Mortgage payment.  Try to put away the difference monthly, into your Nest Egg account.  It will build toward a down payment, and it will be good practice paying the higher monthly.

Windfalls and Nest Eggs are close and important concepts that directly speak to future plans and dreams.  When Windfalls come your way, make wise choices.  Get guidance for the best way to use, invest or just sit on that Nest Egg while it grows!