Want to know a little more about me and my financial philosophy? Check out an interview I did recently with Carrie and Danielle. Carrie and Danielle are all about “style statements”, defining who you are in order to give your life clearer direction. In this interview, I discuss goals, wealth, and inspiration.
I also got to provide their daily question this morning: If you suddenly inherited $10,000, what would you do with it? My answer is very boring and very practical. What’s yours?
While you’re thinking about money, here are a few other stories from around the web:
First, many GRS readers (including my wife) disliked last week’s post about a few ways to raise cash quickly. The Frugal Wench did more than just complain, though — she came up with a list of realistic ways for real people to get cash fast. Her advice is grounded in reality and experience, and not just for those with big bank accounts.
No Credit Needed recently posted an illustrated guide to debt reduction. Sometimes a picture is worth a thousand words. These diagrams describe visually just how the debt snowball (and similar methods) work.
Regular GRS commenter A. Dawn has been exploring the concept of outsourcing your life. He’s made a list of resources for those interested in hiring somebody to take care of certain parts of life. (I could really use someone to answer my e-mail, for example.)
Finally, Joe pointed me to the results of a recent Harvard study about indulgence and regret. This study, published in the Journal of Marketing Research is aimed at marketers needing to convince consumers to buy their luxury goods. But you can use this knowledge to avoid being duped. Or, ideally, to find balance between enjoying life now and enjoying life later.
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This article is about Spare Change
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Hey J.D.,Thanks for the mention. Always appreciated.
A. Dawn
http://www.adawnjournal.com
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Well, I posted this in the comments at the other site, but if I suddenly came up with a windfall — I’d be so boring. I work for a job where part of the compensation structure is periodic bonuses, but I live on my salary. So when I got a bonus, after I paid off my debt, I would have this pile of money I had no idea what to do with, and naturally it would slowly disappear and I’d wind up feeling guilty and horrible because I’d mis-spent it, even if I did wind up saving some. So I came up with a strategy. Now I split it up, after taxes, and have 20% that I can spend on whatever I like (DVDs or shoes or political donations or whatever), then 10% goes to charity, 10% goes to my long-term savings, 10% to my short term savings (vacation/new mattress set fund), 10% to my investment account, and 10% to my mortgage principal. The rest I can spend on any of charity, savings, mortgage, or investment. It works out pretty well. The 20% mad money allocation keeps me from feeling like I’m starving myself of something I earned, but I know I am putting aside a lot. And the charity chunk makes me feel like the money fairy sprinkling help around where help is needed. And who doesn’t like being the money fairy.
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If I inherited $10,000 then I would spend $5,000 paying off me and my fiances loan and then I would invest the other $5,000 into my online business with advertising and building my websites.
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The last time I inherited $10,000, I bought my first house. Next time? A car that gets over 10 mpg and I can feel safe in. That’s an investment worth my money! I’m disappointed with the “illustrated snowball.” I was hoping to see a little $50 snowball crushing bigger and bigger bills as it rolls down the hill of debt freedom! If I were only artistic, I’d show you what I mean. I love the idea of domystuff.com. I do a lot of people’s stuff already, being the mom of a small hoarde, what’s a few more errands?
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Set some aside for taxes, put the rest into my car fund.
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If I were to inherit $10K today…. Send a check to my sister, buy my wife a revolver, $4,000 to my Roth IRA, the balance to pay down my HELOC.
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I like the 20% mad money, put the rest in various savings.
I’d probably plump up my emergency fund, which is present but small, I’d be happier with $2,000 more in there. Then put the rest towards a car savings, which sounds irresponsible but my present wheels are older than I am… a newer vehicle is in my future (I certainly don’t think I could get an older one!)
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I once inherited $9,000 from a very sweet aunt. I was a single (divorced) Mom at the time. I used $3,000 to pay off my only loan (not counting my mortgage) – a home equity loan that I had taken out to replace the roof. I spent $2500 on a piano so my son could practice. He was practicing on a borrowed keyboard until then. And I put the rest in Certificate of Deposits with 3 different maturity dates as an emergency fund (should I need it) or college savings – if no emergencies arose.
I had been living very frugally and pretty responsibly considering my low income and circumstances so I didn’t feel that I needed to put it all towards future goals.
It was a nice balance of getting something fun (the piano), reducing debt, and saving. Had my debts been greater or my job less secure, I might have done something different but this worked for me.
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J.D., thanks so much for the mention. I would never have known about it except for a sudden spike in visitors that I traced back here.
If I suddenly got $10,000, I would put it into fixing up my house. Just found out they are FINALLY tearing down the derelict, long condemned house next door within the week, and I’m psyched to start fixing mine up. Didn’t want to put any money into it, because there were dangerous trees in that yard threatening my house. Now, I can’t wait to make it look like I always wanted.
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$10k? Right to paying off the smaller of my two student loans ($14k and $72k left, respectively). Maybe $9k of it… probably a good idea to put $1k into the emergency fund just to top off the spare money supply.
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