What would you do with £100,000?! Celebrate of course!

Do you buy tickets for the National Lottery?  Or Euromillions?  If you do this online they email you the next day if you have won anything.   You see one of those “News about your ticket” in your inbox and for a few moments allow yourself to dream!  How much have you won and what will you do with it?  Sometimes you can begin to agonise over the dilemma of how much you spend on this or that, and how much you should give to whom etc.  Then when you find out that you have won the incredible sum of £2.40 you need to rethink!

 

But if you were to come into some money, what would you actually do with it?  Imagine that you did win the lottery – or perhaps the Premium Bonds or some kind of competition.  Or maybe you inherit some money from a relative, or benefit from the sale of a property.  There are various ways that you could indeed end up with some money, but would you know what to do with it?

 

We’ve all heard horror stories of the “spend, spend, spend” variety.  People can end up worse off than when they started.  So if you do have some money to spare, here are our guidelines of what you could do.  A little like the three ghosts Charles Dickens novel Christmas Carol, we advise you to look at the past, the present and the future:

  • The Past

The first thing you need to do is to pay off as much debt as you are able.   Certainly get rid of any credit card balances as they are expensive to maintain, and your monthly payments often end up simply paying off the interest rather than making any impact on the amount you actually owe.  So it is wise to clear them down.  Then look at any loans you have.  If the interest rates are not favourable then pay those off too.  Depending on the amount of money you then still have, you may also want to pay off all or at least part of your mortgage.  

Although all of the above could make a considerable dent in your money, remember that it will considerably reduce your monthly outgoings so you will be much better off from this point forward.

 

  • The Present

Whilst you should definitely beware the “spend, spend, spend” syndrome, it would be good to use some of the money for things that you need now.  Be strategic about this: the money could help you to improve your home (or even buy a new home) which will not only give you a better quality of life but will be a better investment for the future.  You may also want to replace your car if it needs it, and treat yourself and the family to a nice holiday.  It would be a shame not to enjoy any of the money – but at the same time be cautious and make sure that you do not spend too rashly and waste the money you have been given.  You may also want to give something to a charity that perhaps you have always wanted to support but never had the means to do so.

 

  • The Future

Investing for the future is really important and is the thing that so many of us are unable to do.   Investing is a way of putting some money aside to help you and your family in whatever the future brings.   For some of us it will be a case of having money in the bank to enjoy a long and happy retirement.  For others it may be the peace of mind knowing that money will be available for health care as needed.  Others may want to make provision to buy a future home for their currently young children.  Whatever your life goals and priorities, investing for the future can play a significant part.

 

You can invest in various ways to generate income: here we suggest just a few.  As most investments incur some element of risk, we would recommend taking financial advice to find the best fit for your circumstances:

  • Property – whether you buy a larger home for yourself or invest in a buy-to-let property, this could be a good way to make your money go further
  • Savings accounts and ISAs – there are many different types around with differing rates of interest so it is important to find the right one for you
  • Equities and shares – this is where you invest in part of a company and benefit from its profits
  • Peer-to-peer lending – lending money to others to help to build their business, then sharing in its profits

So if you do have some spare money at the moment then we hope our Past / Present / Future guidelines will help you to make the best decision as to how to use it!
You may also be interested to know that should your circumstances then change, you may still be able to benefit from having had that money.  If you have used some of the money to purchase a luxury or high value vehicle then you may be eligible for our Privilege Logbook Loan.  You can find out more – or apply for logbook loans online – by visiting our website.  Alternatively, call us on 0330 400 4137.