4 Tips to help you tackle an unexpected financial windfall efficiently

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By: Good Nelly
on 19th May,2011

Have a look at the article to acquire knowledge on some smart tips that can help you utilize the money to reach your financial goals.
4 Tips to help you tackle an unexpected financial windfall efficiently


Have you received a huge amount of money recently? Did you win a lottery or inheritance? If yes, then you should use the money efficiently specially in the current economic scenario where several individuals are going through severe credit problems. Have a look at the article to acquire knowledge on some smart tips that can help you utilize the money to reach your financial goals.      

Tips to help you tackle an unexpected financial windfall
 
Here are the 4 tips that may help you deal with an unexpected financial windfall efficiently:

1. Consult a financial planner: It is a sheer joy to receive a huge chunk of money suddenly. But this does not mean that you should spend the money as you like. It has been found out from a recent report that most individuals are not able tackle unexpected financial windfall competently. They end up spending much more than what they have received. So, to avoid spending more than what you have actually received, you should get help from a financial counselor. A knowledgeable counselor can help use your money intelligently. He/she can tell you as to whether you should use your money to make investments or set up a business. 

2. Focus on your debts: Do you have a huge credit card debt on your shoulder? If yes, then your top most priority will be to reduce your debt burden. You should start making payments on the high-interest debts with the money you have received. Your goal will be to eradicate the credit card debt with highest interest rate first. Once the mission is accomplished, you must focus on the second highest interest debt. Repeat this process until you become debt-free.

3. Increase your cash-reserve: Once you have fulfilled your financial obligations, you should start saving money for securing your financial future. You should create an emergency fund and save as much money as possible. You can use this fund to meet your emergency expenses.

4. Tackle emergency situations: If you are facing a financial emergency, then you should use the money to tackle it first. For instance, if you've defaulted on a mortgage debt and the lender is on the verge of foreclosing your home, then you should pay off the mortgage as early as possible. If you haven't made payments on your credit cards for more than 6 months and your creditors are going to file a lawsuit against you, then you should clear your dues immediately.    

Finally, you should keep aside some money for meeting your long term financial goals also. You won't have job throughout your life. So, it is important to set aside some money for your retirement years also. Contribute a sizeable portion of the money to the retirement accounts. You should also save some money for your child's education since higher education has become very costly.

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