Every once in a while, I’ll get a big windfall.
For example, not too long ago, one of my books was reprinted in Korean and I received a surprisingly nice advance from that, almost completely out of the blue.
When I get a nice windfall like that, I usually do smart things with it. I took a small portion of that advance and took the family out to dinner, then I actually invested the rest of it for the future.
For me, the challenge comes with smaller windfalls.
I won $40 in a NCAA tournament pool in early April. I could have taken that $40 and dropped it straight into savings.
I didn’t. I used it to buy a new board game. It was a complete splurge on something I didn’t need and it was basically $40 that never entered my budget.
The natural response that most of you will have – and the response I had at the time – is “so what?” If I can’t splurge a little bit, what’s the point of living?
That was precisely my logic when I spent that $40.
However, a little later, I began to regret that expense. Rather than sticking to the plan I had already made for myself, I simply took income – that $40 I found – and spent it on something completely outside the plan.
I already allot myself a fair amount each month for spending on whatever I like. Why did I need to take that extra $40 and add to it?
Why not just take that $40 and put it into savings for the future and forget about it? Why not simply stick to the plan that I made when things were cooler.
The truth is that it was easy to “cheat” with this $40 because it was such a relatively small amount. Compared to our annual incomes, that $40 is pretty minor. It did not seem like an amount that could really make a difference.
Because I decided that the $40 was inconsequential, I freed myself to use it for something totally unnecessary.
On the other hand, that $40 can easily become a piece of something much bigger. If I had simply slipped it quietly into my investments, it would sit there earning money, building and building over time, until Sarah and I made the decision to retire or to buy a different home in the country. That $40 brings the dream just a little closer.
Little windfalls not only make it easy to break our own budgets and spending agreements, but they also take away the opportunity to take a few more steps toward our real dreams.
The next time you get a little windfall, don’t just spend it on the spur of the moment. Buy yourself a little treat, sure, but put most of it away, just like you would with a big windfall. In the end, both provide another step toward your dreams.