Sometimes we receive unexpected income. Last week, student loan forgiveness was announced. Also last week, we personally received an unexpected check for $650 from the Indiana IRS. Something to do with an inflation relief plan. But all this got me thinking about how it’s important to decide what to do with random extra money we receive or are going to receive so it doesn’t get lost in the mix.

One option is to roll that amount onto your next debt payment or financial goal. So if you were used to paying $600 a month on debt, and now one debt is paid off or paid down, call the creditor and change your monthly minimum payment to the amount you’re already used to paying. This will help pay it off even faster.

This is part of the debt snowball plan that we followed to get out of debt. Every time we paid one debt off, we’d change the minimum payment on our next one to include what we were paying on the previous one.

And the same thing goes for random bits of $, like this $650. If you get that and already weren’t planning on having it, you can go ahead and throw it right on your next financial goal (debt, down payment, retirement, etc.)

This recommendation is also only if you’re already able and making enough to pay your monthly bills. If you’re behind on bills or haven’t been paying on some debts as it is, that’s a different situation.

Ultimately, you get to decide how to spend unexpected income and it’s fine to spend it on whatever you want. You CAN have financial goals and still have fun. It’s just important to consider opportunity cost and priorities. Ex: If it means more to focus on a vacation than paying off debt right now, that’s fine. Vacations also mean different things to different ppl.

Just remember that wherever you decide to spend money, it will obviously mean less to put toward other areas. So think about your priority now and where you want to focus your attention and extra income. 💸💫 (Click here to read other posts on personal finance).

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