Don't Waste That Money Bonanza!

By Kristi Vaughan

Is unexpected cash coming into your pocket? A year-end bonus perhaps? Or maybe a tax refund, gift from a long lost uncle, or even lottery winnings? Before that money burns the proverbial hole in your pocket why not take some concrete steps to put it to good use.

Think of yourself first

Sure it is selfish but this may be one of your best times to stash something away for retirement. If you haven't already saved under a tax-advantaged plan such as an Individual Retirement Account, look into doing so now. Even if you can't deduct the contribution from earnings, you probably can have it grow tax-deferred. And if you are over the age of 50 you can boost your contribution. Check the Internal Revenue Service for the latest on contribution limits.

Get (or give) an education

If you don't have a college degree, why not use these funds towards one? Or help with your child, or grandchild's education. A 529 plan is one way to save.

Add to the value of your house

This may be the time to boost the value of your house by adding a bedroom or bathroom. Or maybe it is just time to take care of overdue repairs. Talk with a local real estate agent about improvements that can return your investment. A patio can be more valuable to homeowners in Arizona than to those in Maine.

Give it away

There are many organizations that could benefit from a contribution. If your bonanza is large and public (for example a lottery winning) you'll probably find many people asking for help. Fortunately, most of us can make our decisions under less pressure.

Invest for the future

If you don't invest and plan for the future, your bonanza won't last long. Seek professional advice on ways you can invest to get a return that matches your needs and investment style.