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.
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!
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.
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.
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.
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.
TOTAL: $1 MILLION
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?