In the short term, it would go where all of my spare money goes: into my Vanguard Prime money market fund. I call that the "house down-payment fund" but in reality it does triple-duty as an emergency fund and the source of my annual contribution to my Roth IRA (which is also with Vanguard). It's really just "the fund where all the extra money goes."
Does that mean I'll carry on exactly as before? Realistically, probably not. Knowing that I'm in a $1000-better position will probably make me "feel rich," at least for a little while, and I'll be more likely to treat myself to a little extra spending - an extra course at dinner here, a new pair of pants there, that sort of thing. Not enough to blow the whole windfall (at least, I hope not), but enough to ease up a little bit with my tightwaddish ways. And I've been especially tightwaddish lately, because I've been "feeling poor" ever since I realized last month that I owed Uncle Sam and the state of Maryland a lot more money than I expected to.
Rationally, there's no difference whatsoever between spending $100 out of a windfall and spending $100 extra out of my paycheck. A hundred dollars here is exactly the same as a hundred dollars there. And thinking about it as spending $100 extra out of my paycheck (which is something I can easily afford to do, but generally choose not to) would, I think, keep me from going too far overboard.
Johanna
of MD
@
May 07, 2008 15:08:13 PM
Tough choice
Hmm to save or spend. Part of me is inclined to stash it away in my savings account and pretend it doesn't exist, but in reality an extra 1000 dollars out of nowhere would allow me to pay off a good portion of my 1661 dental bill and I would not have to pay 139 dollars a month for the next 12 months. I could either pay a lesser amount per month, as the loan is interest free for 12 months, or pay it off in about 5 months. Either way, it would free up some money to put towards a night at the movies every now and then.
Veronica
of NY
@
May 07, 2008 14:30:21 PM
I'd do like I will with my economic stimulus check. It would go into my ING Direct savings account. Could the money help to pay for something like a new house or car later on? Sure. But for now it would go into savings, growing until I need it.
Kimberly Palmer, senior editor for U.S. News & World Report, writes about how to save money, avoid scams, manage debt, and be a savvy shopper. Send your personal finance questions to her for expert money advice.
Johanna of MD @ May 07, 2008 15:08:13 PM
Veronica of NY @ May 07, 2008 14:30:21 PM
FFB of NY @ May 07, 2008 14:28:57 PM
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