That said, when people find a spark of good luck and use it to pay off the debts from bad spending habits, chances are they’ll be right back where they started very quickly.

It’s better to consciously do the hard work and change your spending habits.

We are still using our cards occasionally, but only when cash is not an option or under specific circumstances (with one particular card we get bonus airmiles when we pay using it). We now track every dollar that goes on the card, and we pay it off every month. No more ’someday’ repayment plans.

We did, however, split the windfall money between savings and debt repayment, so that ‘emergencies’ and big expenses are no longer paid for on credit. We’re well on our way now with both the emergency fund and our debt repayment.

I see a lot of parallels between overspending and other addictions. For one thing, unless your attitude about it has genuinely changed, attempts to quit problem behaviour are likely to be short-term. A change in outlook, however, is a strong enough motivator for long-term change. Whether you’re quitting smoking, cutting ‘bad’ foods out of your diet, or getting your finances under control, you will keep relapsing into old habits unless there has been deeper change within.

That being said, if *I* received an unexpected windfall, I would invest it. I could most likely achieve a higher rate of return from the stock market than I could from paying off my few debts, since they are all fairly low interest, and my student loan interest is tax deductible anyway.

Again, I think it simply depends on your attitudes about debt and your finances. If you can’t control your spending, you may need to “protect yourself” from your windfall. But if you’re financially savvy, then do whatever achieves you the highest rate of return.