Ask Jesse: What Should You Do with a Life-changing Windfall?

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4.7 • 1.1K Ratings

🗓️ 22 August 2022

⏱️ 10 minutes

🔗️ Recording | iTunes | RSS

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Summary

A listener writes the show to ask: what should he and his family do with a life-changing windfall? The listener has a mortgage, and a HELOC, and some savings goals such as saving for his kids' college education. The windfall amount is enough to payoff all these things, and in addition he has recently earned a large raise. While the windfall is a huge gift, he wants to be calm, reasonable, and disciplined with allocating it towards the family's financial goals. Jesse helps walk through the problem, and identify some emotionally driven questions one should ask in this situation.

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Transcript

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0:00.0	Hello, Wine Ebbers. My name is Jesse Mekum with another episode of the Wine Ab Podcast
0:09.2	where we teach you four rules to help you stop a paycheck to paycheck, get out of debt,
0:13.5	and save more money. I have a fantastic question that Jackson sent in today. He said, or I
0:19.9	didn't send it today, sent it a little bit ago, but here we go.
0:23.1	My wife and I have been wine ebbing since last fall, which itself has changed our lives.
0:27.7	Very cool. Through Wine Ab we increased our net worth 17 grand in those eight to nine months.
0:31.4	That's with no changing income and this crazy inflation. Hear that? We were working hard to pay
0:36.5	down debt, attacking our HELOC with plans to attack the mortgage next, but then we hear they
0:42.1	were handed, he said, a windfall, and he clarifies. When I say windfall, I mean life changing windfall,
0:48.8	like ability to pay off the HELOC and the mortgage, be debt-free, and still have a surplus of about
0:54.7	130 grand to hold for kids college. So before we jump on the yes-get debt-free now train,
1:01.0	should we pause and consider any other options like investing? For perspective, I calculated,
1:05.9	saving 50 grand in interest by paying off the mortgage. Should we save more of the windfall for
1:10.6	college instead of paying off the mortgage? Our rate is only three and a half percent, and they
1:14.5	have boys that are 14, 12, and nine. So they do have some time. The mind is to sneak up on you.
1:19.5	That was a Jesse Addie. Here we go again. To further boost the windfall, I was recently
1:23.7	promoted at work, which will bring an additional 35 grand per year. We plan to bank all that as we
1:29.1	continue to wine have it. I also have a real pension that I can retire in 10 years, which should
1:33.9	fully support expenses. Jiminy Christmas. But he says, wanted to bounce off you because it's
1:40.0	difficult to see clearly sometimes about the situation as it was quite unexpected. Up until this
1:45.0	point, we've started to live off one income, and this is like the complete opposite, and we are
1:49.0	trying to stay grounded and stick to our good budgeting habits. So general question.
	...

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