If I Had A Million Dollars…

by Kay Lynn

What would I do with a million dollar windfall?  That’s the question posed by Sandy from Yes I Am Cheap for a personal finance meme this week.  For the purposes of this exercise, I’m going to assume it’s after taxes.

Sometimes when I see people winning large amounts from the lottery, I wistfully think about what it would be like to be them.  Thinking about the money as a large stack is very different from planning how to spend it.  Here’s my plan for a million dollar windfall.

Fake Million Dollar BillDebt

My first priority is to pay off all remaining debt.  For us that means $15,000 towards student loan debt and $55,000 mortgage.  It will be the first time in 30 years that I didn’t have debt.  The feeling must be great!

SUBTOTAL:  $70,000


What a feeling it will be to give away such a large amount of money.  The cause I am passionate about is domestic hunger.  It outrages me to think there are people without enough food in this great nation.  I would donate 10% to Feeding America.

SUBTOTAL: $100,000


I would invest half of the windfall towards retirement savings.  We would donate the maximum allowed in a Roth IRA which for the two of us is $12,000.  The rest have to be invested in funds.

SUBTOTAL:  $500,000


My husband and I would gift each child with $10,000 to use at their own discretion.  Sometimes I disagree with how my kids spend their money.  This would be given without any expectation or judgments. That adds up to $50,000.

Then we’ll treat our parents, siblings, kids and grandkids to a family vacation.  A cruise to the Caribbean would be enjoyed by all generations and doesn’t involve international flights.  I would budget $50,000 for the group to fly to Florida, take a 7-10 day cruise and include shore excursions.

TOTAL: $100,00

Our home was built in the mid 80’s and it’s starting to show.  I’m not going high end so will never be on an HGTV show, but will budget for the kitchen cabinets to be replaced and topped with granite counters.  The bathrooms all need new mirrors, light fixtures and cabinet doors.

I’d also want to go ahead and buy a vacation/retirement home in Florida.

SUBTOTAL: $230,000


What was surprising to me was how easy it was to allocate a million dollars!  Granted half was really going to savings, but it was still spent. Have you ever thought about how you’d spend a windfall?  Where would your money go?

Photo: Some rights reserved by Simon Davison

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No Debt MBA July 14, 2011 at 7:16 am

I also found it pretty easy to “spend” all of my million dollars. It really does add up fast when you’re looking at big-ticket purchases or investments!

Harri @ TotallyMoney July 14, 2011 at 7:38 am

It’s crazy how $1m just doesn’t really stretch that far!

I admire the fact that you’d give your kids the money without judgements or expectations. Money is so personal. There aren’t extreme rights or wrongs, just different values and approaches. Allowing your kids to use the money at their discretion shows you’ve got faith in them and their decisions.

krantcents July 14, 2011 at 11:11 am

I would set up an educational foundation for a small portion to award scholarships. I would invest the rest to ensure a comfortable retirement.

JoeTaxpayer July 14, 2011 at 6:04 pm

Ok. The most boring answer you’ll get – add it to investments aimed for retirement.
Our only debt is the mortgage, 6 years left, and no impulse to pay off any sooner. The college account is fully funded, and no urge to buy anything out of the ordinary.

Yes, I Am Cheap July 14, 2011 at 10:05 pm

Alright Joe, go ahead and rub it in. I’m more than a little jealous.

101 Centavo July 15, 2011 at 4:33 am

I’ve been reading this meme the last week or so, and it’s the first time I’ve seen the idea of getting the whole family together for a great vacation. Ours is far-flung, and sometimes too much goes by between reunions. Fantastic idea!

jana July 15, 2011 at 6:40 am

this is a really solid plan. it is fun to spend imaginary money, isn’t it?

Marie at Family Money Values July 15, 2011 at 11:55 am

I too love the idea of getting the generations together for a vacation! We are going to do that next year at Yellowstone NP – it’s our 40th anniversary celebration!

John July 17, 2011 at 7:07 am

A million dollars doesn’t buy much 🙁 I’d love to buy a Scottish island ($5m) or castle ($12m).

I’d probably spend $1m on:

$650k – a big house in Derbyshire (with space to run my online business)

$300k – a couple of holiday cottages to rent out

$50k – a cash injection into my online retail business

expense reporting July 18, 2011 at 2:39 pm

I would save some, give some to charity, and then the rest I would use on traveling!

Amanda L. Grossman July 19, 2011 at 5:24 pm

Fantastic on having just $55,000 left on your mortgage!

Kay Lynn July 21, 2011 at 5:05 am

Sorry all for forgetting to check the comments :(.

@ No Debt MBA: I guess it’s good though not to spend it on little items or less meaningful things (like furniture or electronics).

@ Harri: The amount for the kids is low enough that we can do it without judgement; I’d had a hard time withholding it if I gave them 10 times that amount! They’ll get the rest of our estate when we’re gone so this is just a treat.

@ Krantcents: The educational foundation makes sense given your background. Somehow I think you already have plenty stashed for retirement.

@ Joe: That’s great about your mortgage. Ours has 11 years left but since it will be the only debt in about six months we’ll be paying that off quicker.

@ Sandy: Yes, Joe is in an admirable financial position.

@ 101 Centavos: As you age, you come to appreciate the time spent with siblings and parents that I don’t get to see very often. To get the whole gang together would just be awesome!

@ Jana: It was a fun exercise. I’m glad Sandy started us down this path.

@ Marie: Congrats on 40 years. That’s fantastic! I hope you share more about your trip as it gets closer.

@ John: Great idea to invest in rental property. I think that’s an excellent method of passive income.

@ Expense Reporting: Travel is a great love of mine and we plan to take a lot more international trips in retirement.

@ Amanda: Thanks! We did have a fully paid mortgage at one time but moved a few years ago.

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