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How I spent my windfall of cash

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10.04.2019

For many people, a financial windfall isn’t necessarily a life-altering moment. Often, it’s quieter than hitting the jackpot or winning the lottery (which, in many cases, can actually make beneficiaries more prone to bankruptcy). It might come in the form of compensation for a workplace injury or a sudden inheritance; sometimes, it might just be a sharp increase in earnings.

Many financial planners warn that recipients of a windfall are in a precarious position, often prone to mismanaging their finances or feeling crippled by their sudden wealth. But the money need not change your life for the worse—or sustain you for years to come. We spoke to three people about what coming into some money meant for them and their families and how it impacted their financial lives.

Neil’s* cash infusion came in the form of a salary jump, when he left a job in which he was earning around $70,000 to one in which his pay quickly climbed to nearly $400,000, in part through sales commission. He had a child around the same time as the income change, so Neil found that his family’s lifestyle quickly expanded. “No one tells you that your expenses also increase accordingly,” he says. “The more you make, the more you spend.”

Between his new salary and addition to the family, Neil and his wife—who also works full-time—opted to move out of New York City and into a New Jersey suburb. That meant trading in their apartment for a mortgage and property taxes, a second car, and a nanny that set them back more than $600 each week.

“Being a first time homeowner is great, but we moved from a 1,000-square-foot apartment into a 3,200-square-foot house with a pool and a half acre of land,” he says. Putting aside upkeep of their house, even a small repair can run upwards of $1,000,........

© Fast Company