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There’s a reason why most lottery winners lose all that they’ve won after a while, and we all experience it whenever we receive a cash bonus or a large cash gift. Have you ever received a large amount of cash and lose it almost immediately because you couldn’t stop yourself from going on a shopping spree? Have you ever regretted spending that money because there were suddenly a dozen other, more important things you could have spent it on like paying debts or bills? If you’ve answered yes to those questions, then here’s a simple guide for you.
How to Stop Wasting Windfalls, Bonuses, and Cash Gifts
1. Keep it in the bank and forget about it.
Cash has a tendency to slip away from your wallet, and one way to stop yourself from wasting your bonus cash is to save the money in a bank. If you need to find and queue at an ATM to withdraw some cash, that extra hassle will generally prevent a lot of unwise purchases.
Remember: Keep your bonus cash in the bank and forget about it. Let the emotions and excitement cool down, and you’ll be able to use that money wisely later on.
2. Stop thinking about what you can buy with it.
Seriously, stop. If you let your imagination run wild, you’ll soon waste your money on something you never really needed. If you waste your cash on unimportant luxuries, you’ll have less to spend on the things that are really important. To counter this habit, before you start thinking of buying something you must keep asking yourself, “do I really NEED that thing I want? REALLY? REALLY REALLY?” Unless it’s a life-or-death important expense, you probably don’t, and that’ll be another barrier against unwise expenses.
3. Save it for opportunities and emergencies.
Personal finance authors always tell people to have some cash buffer for emergencies for a reason. That’s because it’s not a question of IF emergencies will happen, but WHEN. No matter how much we want to avoid problems, stuff break down and we get into accidents when we least expect them. It’s better to have some money on hand for those occasions rather than face a financial problem and get into debt to solve them.
Since you just got some extra cash, why don’t you simply save it for extra safety and peace of mind?
4. Use it to pay debts.
This is one of the most useful ways to use your extra cash. Instead of using it to buy more unnecessary stuff, why not use the money to pay for stuff you haven’t fully paid for yet? The peace of mind you get from being debt free may grant you more free time to enjoy life and think of future opportunities. Why not use what you’ve got to get one step closer to freedom?
“There is one thing that should be indelibly impressed upon every youth’s mind, and that is the tragic consequences of debt, especially when incurred in early life. It has ruined many of the most promising careers.” — Orison Swett Marden
5. Use it on future bills and other expenses.
If your family’s breadwinner died and you received some cash from their life insurance, would you waste it on some shiny new stuff you wanted? Of course not. You muse budget that money wisely and get your life together. Why don’t you do the same thing with the bonus cash you receive? Extra cash will ease your financial life, but only IF you learn to spend it wisely.
While you can spend a little of your windfall or cash bonus on some fun, you must learn to avoid wasting all of it on unnecessary luxuries. There’s always so many great things you can buy with windfalls and cash gifts, and wasting it all on some shopping spree is not one of them. Do not let your emotions cloud your judgment when it comes to your finances. Save your money, stop thinking about what you can buy with it, and let the excitement cool down. When your head has cleared up then you’ll be free to use it only on the things that really matter.
I hope you enjoyed reading this article! If you want to learn more, check out a few of our other personal finance articles here:
- 30 Most Valuable Personal Money Management Tips You Must Learn NOW
- Holes in your Wallet? How to Start Tracking, Cut Expenses, and Save Money
- How to Get out of Debt in Three Simple Steps
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